Ownclasses

X, Y and Z were partners in a firm sharing profit’s in the firm of 5:3:2. On 31-3-2015 their Balance Sheet was as follows:
On the above date Y retired and X and Z agreed to continue the business on the following terms:
(1) Goodwill of the firm was valued at ₹51,000
(2) There was a claim of 4,000 for Workmen’s Compensation.
(3) Provision for bad debts was to be reduced by 1,000.
(4) Y will be paid 8,200 in cash and the balance will be transferred in his loan account which will be paid in four equally yearly instalments together with interest @ 10% p.a.
(5) The new profit sharing ratio between X and Z will be 3:2 and their capitals will be in their new profit sharing ratio. The Capital adjustments will be done by opening current Accounts.
Prepare Revaluation Account. Partner’s Capital Accounts and the Balance Sheet of reconstituted firm

Answer



Working Notes:
bold WN bold 1 colon space Calculation space of space Gaining space Ratio
straight X apostrophe straight s space equals space 3 over 5 minus 5 over 10 equals 1 over 10
straight Z apostrophe straight s space equals 2 over 5 minus 2 over 10 equals 2 over 10
Gaining space Ratio space equals space 1 colon 2
bold WN bold 2 colon space Adjustment space of space Goodwill
straight Y apostrophe straight s space Share space of space Goodwill space equals 51 comma 000 cross times 3 over 10 equals 15 comma 300
15 comma 300 space will space space be space debited space to space gaining space partners space left parenthesis straight X space and space straight Z right parenthesis space in space the space ratio space of space 1 colon 2
straight X apostrophe straight s space share equals 15 comma 300 cross times 1 third equals 5 comma 100
straight Z apostrophe straight s space share equals 15 comma 300 cross times 2 over 3 equals 10 comma 200
bold WN bold 3 space Adjustment space of space Capital
Adjusted space Capital space of space straight X space equals space 50 comma 000 plus 5 comma 000 plus 20 comma 000 minus 1 comma 500 minus 5 comma 100 equals 68 comma 400
Adjusted space Capital space of space straight Z equals space 20 comma 000 plus 2 comma 000 plus 8 comma 000 minus 600 minus 10 comma 200 equals 19 comma 200
Total space Adjusted space Capital equals space 68 comma 400 plus 19 comma 200 equals 87 comma 600
straight X apostrophe straight s space New space Capital space equals 87 comma 600 space cross times 3 over 5 equals 52 comma 560
straight Z apostrophe straight s space space New space Capital space equals 87 comma 600 cross times 3 over 5 equals 35 comma 040
straight Z apostrophe straight s space New space Capital greater than straight Z apostrophe straight s space Adjusted space Capital left parenthesis straight Z space owes space 15 comma 840 space to space the space firm right parenthesis
straight X apostrophe straight s space New space Capital less than straight X apostrophe straight s space Adjusted space Capital left parenthesis Firm space owes space 15 comma 840 space to space straight X right parenthesis

bold WN bold 4 space Amount space transferred space to space straight Y apostrophe straight s space Loan space straight A divided by straight C
Amount space to space be space transferred space equals space left parenthesis Credit space side space minus space Debit space side right parenthesis minus Cash space paid
space space space space space space space space space space space space space space space space space space space space space space space space space space space space space space space space space space equals left parenthesis 70 comma 300 minus 900 right parenthesis minus 8 comma 200 equals 61 comma 200