Amit and Anil are partners sharing profits and losses in the ratio of 2 : 1. Their Balance Sheet as on 31st March, 2023 was as follows:
Ankit is admitted as a partner on the date of the Balance Sheet on the following terms:
(a) Ankit will being in ₹ 1,00,000 as his capital and ₹ 60,000 as his share of goodwill for 1/4th share in profits.
(b) Machinery is to be appreciated to ₹ 1,20,000 and the value of building is to be appreciated by 10%.
(c) Stock is found overvalued by ₹ 4,000.
(d) General Reserve will continue to appear in the books of the reconstituted firm at its original value.
(e) A Provision for Doubtful Debts is to be created at 5% of debtors.
(f) Creditors were unrecorded to the extent of ₹ 1,000.
Prepare Revaluation Account and Partner’s Capital Accounts.
[Ans.: Gain (Profit) on Revaluation Account – ₹ 27,000; Partner’s Capital Accounts: Amit – ₹ 2,40,000; Anil – ₹ 1,80,000; Ankit – ₹ 1,00,000.]
Solution :
