Aan and Shaan were partners sharing profits in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2023 was as under:
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Creditors | 2,00,000 | Cash | 1,48,000 |
| Employee’s Provident Fund |
30,000 | Debtors 2,05,000 Less: PDD 3,000 |
2,02,000 |
| Bank Overdraft | 1,70,000 | Stock | 2,00,000 |
| Reserve | 1,50,000 | Plant and Machinery |
6,00,000 |
| Capital A/cs: Aan’s Shaan’s |
7,00,000 6,00,000 |
Building | 7,00,000 |
| 18,50,000 | 18,50,000 |
They agreed to admit Mohan for 1/4 share on the above date subject to the following terms:
(i) Mohan to bring in capital equal to 1/4th of the total capital of Aan and Shaan afterall adjustments including premium for goodwill.
(ii) Building to be appreciated by 20% and stock to be depreciated to 70%.
(iii) Provision for Doubtful Debts on Debtors to be raised to ₹ 10,000.
(iv) A provision be made for₹ 18,000 for outstanding legal charges.
(v) Mohan’s share of goodwill premium was calculated as1,00,000.
Prepare the Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new firm.
[Ans: Gain on Revaluation- 55,000; Capital Accounts: Aan 8,83,000; Shaan- 7,22,000; Mohan 4,01,250; Total of Balance Sheet 24,24,250.]
Solution :
