X and Y were partners in the profit-sharing ratio of 3 : 2. Their Balance Sheet as at 31st March, 2022 was as follows:
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Creditors | 56,000 | Plant & Machinery | 70,000 |
| General Reserve | 14,000 | Buildings | 98,000 |
| Capital A/cs: X Y |
1,19,000 1,12,000 |
Stock | 21,000 |
| Debtors 42,000 Less: Provision 7,000 |
35,000 | ||
| Cash in Hand | 77,000 | ||
| 3,01,000 | 3,01,000 |
Z was admitted for 1/6th share on the following terms:
(i) Z will bring 56,000 as his share of capital, but was not able to bring any amount to compensate the sacrificing partners.
(ii) Goodwill of the firm is valued at 84,000
(iii) Plant and Machinery were found to be undervalued by 14,000 Building was to brought up to1,09,000.
(iv) All debtors are good.
(v) Capitals of X and Y will be adjusted on the basis of Z’s share and adjustments will be done by opening necessary current accounts.
You are required to prepare Revaluation Account and Partners’ Capital Accounts.
(CBSE Sample Question Paper 2023)
[Ans.: Gain on Revaluation- 32,000; Partners’ Capital Accounts: X 1,68,000; Y- 1,12,000; Z- 56,000; X’s Current A/c (Dr.)—₹ 13,000; Y’s Current A/c (Cr.)-24,000.]
[Hint: ‘All Debtors are good’ means Provision for Doubtful Debts is no longer required hence, should be credited to Revaluation Account.
Solution :
