Q83 Balance Sheet of Ram and Shyam who shares profits in the ratio of their capitals as at 31st Marc......

Published on: 14-Jan-21
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Accountancy ( 12th) Admission of a Partner Add to Study Deck

Q83.Balance Sheet of Ram and Shyam who shares profits in the ratio of their capitals as at 31st March, 2019 is:

Liabilities		Amount ( )	Assets	Amount ( )
Capital A/cs:			Freehold Premises	20,000
Ram	30,000		Plant and Machinery	13,500
Shyam	25,000	55,000	Fixtures and Fittings	1,750
Current A/cs:			Vehicles	1,350
Ram	2,000		Stock	14,100
Shyam	1,800	3,800	Bills Receivable	13,060
Creditors		19,000	Debtors	27,500
Bills Payable		16,000	Bank	1,590
			Cash	950
		93,800		93,800

On 1st April, 2019, they admitted Arjun into partnership on the following terms:

Arjun to bring 20,000 as capital and 6,600 for goodwill, which is to be left in the business and he is to receive 1/4th share of the profits.
Provision for Doubtful Debts is to be 2% on Debtors. (c) Value of Stock to be written down by 5% .

(d) Freehold Premises are to be taken at a value of 22,400; Plant and Machinery 11,800; Fixtures and Fittings 1,540 and Vehicles 800.

You are required to make necessary adjustments entries in the firm, give Balance Sheet of the new firm as at 1st April, 2019 and also determine the ratio in which the partners will share profits, there being no change in the ratio of Ram and Shyam.

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