Sanjana and Alok were partners in a firm sharing profit and losses in the ratio 3:2....

 

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Sanjana and Alok were partners in a firm sharing profit and losses in the ratio 3:2. On 31st March, 2018 their Balance Sheet was as follows: Balance Sheet of Sanjana and Alok as on 31-3-2018 Amount Assets (Rs.) Liabilities Creditors 60,000 Cash Work men's Compensation Fund 60,000 Debtors Capital: Sanjana 5,00,000 Alok 4,00,000 Less:Provision for doubtful debts 9,00,000 Stock Investment Furniture 1,46,000 Amount (Rs.) On 1, 66,000 2,000 -1,44,000 1,50,000 2,60,000 3,00,000 10,20,000 10,20,000 1th 1st April, 2018, they admitted Nidhi as a new partner for share in me proms on the following terms: (a) Goodwill of the firm was valued at Rs. 4,00,000 and Nidhi brought the necessary amount in each for her share of goodwill premium, half of which was withdrawn by the old partners. (b) Stock was to be increased by 20% and furniture was to be reduced to 90%. (c) Investments were to be valued at Rs. 3,00,000. Alok took over investments at this value. (d) Nidhi brought Rs. 3,00,000 as her capital and the capitals of Sanjana and Alok were adjusted in the new profit sharing ratio. Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm on Nidhi's admission. Sanjana and Alok were partners in a firm sharing profit and losses in the ratio 3:2. On 31st March, 2018 their Balance Sheet was as follows: Balance Sheet of Sanjana and Alok as on 31-3-2018 Amount Assets (Rs.) Liabilities Creditors 60,000 Cash Work men's Compensation Fund 60,000 Debtors Capital: Sanjana 5,00,000 Alok 4,00,000 Less:Provision for doubtful debts 9,00,000 Stock Investment Furniture 1,46,000 Amount (Rs.) On 1, 66,000 2,000 -1,44,000 1,50,000 2,60,000 3,00,000 10,20,000 10,20,000 1th 1st April, 2018, they admitted Nidhi as a new partner for share in me proms on the following terms: (a) Goodwill of the firm was valued at Rs. 4,00,000 and Nidhi brought the necessary amount in each for her share of goodwill premium, half of which was withdrawn by the old partners. (b) Stock was to be increased by 20% and furniture was to be reduced to 90%. (c) Investments were to be valued at Rs. 3,00,000. Alok took over investments at this value. (d) Nidhi brought Rs. 3,00,000 as her capital and the capitals of Sanjana and Alok were adjusted in the new profit sharing ratio. Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm on Nidhi's admission.

Answer rating: 100% (QA)

Working Note 1 Computation of quantity of goodwill to be brought in by Nidhi and adjusted to sacrifi... View the full answer