Ishu and Vishu are partners sharing profits in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2025 was as follows:
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Creditors | 66,000 | Cash at Bank | 87,000 |
| General Reserve | 10,000 | Debtors 42,000 Less PDD 7,000 |
35,000 |
| Investment Fluctuation Reserve |
4,000 | Investments (Market Value ₹ 19,000) |
21,000 |
| Ishu’s Capital | 1,19,000 | Building | 98,000 |
| Vishu’s Capital | 1,12,000 | Plant and Machinery | 70,000 |
| 3,11,000 | 3,11,000 |
Nishu was admitted on that date for 1/6 share in the profits on the following terms:
(a) Nishu will bring 56,000, as his share of capital.
(b) Goodwill of the firm is valued at 84,000 and Nishu will bring his share of Goodwill in Cash.
(c) Plant and Machinery be appreciated by 20%.
(d) All debtors are good.
(e) There is a liability of 9,800 included in Sundry Creditors that is not likely to arise.
(f) Capitals of Ishu and Vishu will be adjusted on the basis of Nishu’s Capital and any excess or deficiency will be made by withdrawing or bringing in Cash by the concerned partner.
Prepare. the Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new firm.
Ans.:Gain (Profit) on Revaluation ₹ 30,800; Partners’ Capital Accounts Ishu: ₹ 1,68,000;Vishu: ₹ 1,12,000; Nishu: 56,000. Bank Balance: 1,49,200. Total of Balance Sheet: 3,92,200.]
Solution :
