Mohan and Mahesh were partners in a firm sharing profits in the ratio of 3:2. On 1st April, 2012 they admitted Nusrat as a partner in the firm. The Balance Sheet of Mohan and Mahesh on that date was as under:
It was agreed that:
(i) The value of Building and Stock be appreciated to Rs 3,80,000 and Rs 1,60,000 respectively.
(ii) The liabilities of workmen's compensation fund was determined at Rs 2,30,000.
(iii) Nusrat brought in her share of goodwill Rs 1,00,000 in cash.
(iv) Nusrat was to bring further cash as would make her capital equal to 20% of the combined capital of Mohan and Mahesh after above revaluation and adjustments are carried out.
(v) The future profit sharing ratio will be Mohan 2 / 5, Mahesh 2/5, Nusrat 1/5.
Prepare Revaluation Account, Partner's Capital Accounts and Balance Sheet of the new firm. Also show clearly the calculation of Capital brought by Nusrat.
Nusrat’s Capital = (Mohan’s capital + Mahesh’s capital) x 20/100
= (3,92,000 + 2,08,000) x 20/100
= 6,00,000 x 20 /100 = 1,20,000
Cash in Hand = 1,40,000+1,20,000+1,00,000 = 3,60,000