A B and C are partners sharing profits and losses in the ratio of 2 3 5 On 31st March 2019 their Bal......

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

A, B and C are partners sharing profits and losses in the ratio of 2 : 3 : 5. On 31st March, 2019, their Balance Sheet was:

Liabilities	Amount ( )	Assets	Amount ( )
Creditors	64,000	Cash	18,000
Bills Payable	22,000	Bills Receivable	14,000
General Reserve	14,000	Stock	44,000
Capital A/cs:		Debtors	42,000
A 36,000		Machinery	94,000
B 44,000		Goodwill	20,000
C 52,000	1,32,000
	2,32,000		2,32,000

They admit D into partnership on the following terms:

Machinery is to be depreciated by 15%.
Stock is to be revalued at 48,000.
It is found that the Creditors included a sum of 12,000 which was not to be paid.
Outstanding Rent is 1,900.
D is to bring in 6,000 as goodwill and sufficient capital for 2/5th share.

The partners decided to use 10% of the profits every year in providing drinking water in schools, where required. Prepare Revaluation Account, Partners' Capital Accounts, Cash Account and Balance Sheet of the new firm.

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