Divya, Yasmin and Fatima are partners in a firm, sharing profits and losses in 11 : 7 : 2 respectively. The Balance Sheet of the firm on 31st March, 2018 as follows:
| Liabilities | ₹ | Assets | ₹ | ||
| Sundry Creditors Public Deposits Reserve Fund Outstanding Expenses Capital A/cs: Divya Yasmin Fatima |
70,000 1,10,000 90,000 10,000 5,10,000 3,00,000 5,00,000 |
Factory Building Plant and Machinery Furniture Stock Debtors Less: provision Cash at Bank |
1,50,000 (30,000) |
7,35,000 1,80,000 2,60,000 1,45,0001,20,000 1,59,000 |
|
| 15,99,000 | 15,99,000 |
On 1st April, 2018, Aditya is admitted as a partner for one-fifth share in the profits with a capital of ₹ 4,50,000 and necessary amount for his share of goodwill on the following terms:
- Furniture of ₹ 2,40,000 were to be taken over Divya, Yasmin and Fatima equally.
- A creditor of ₹ 7,000 not recorded in books to be taken into account.
- Goodwill of the firm is to be valued at 2.5 year’s purchase of average profits of last two years. The profits of the last three years were:2015-16 – ₹ 6,00,000; 2016-17 – ₹ 2,00,000; 2017 – 18 – ₹ 6,00,000.
- At time of Aditya’s admission. Yasmin also brought in ₹ 50,000 as fresh capital.
- Plant and Machinery is revalued to ₹ 2,00,000 and expenses outstanding were brought down to ₹ 9,000.
Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the reconstituted firm.
Solution :
