A and B are partners, sharing profits and losses in the proportion of 3/4th and 1/4th...

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A and B are partners, sharing profits and losses in the proportion of 3/4th and 1/4th As at 31st March, 2021, following is the Balance Sheet of A and B. Balance Sheet as at 31st March, 2021 (3) Liabilities Capital accounts A B Creditors General reserve 2,85,000 1,55,000 Assets Cash in hand Cash at bank Sundry Debtors 4,40,000 3,75,000 Stock 60,000 Bills receivable Land and building Office furniture () 1,15,000 1,10,000 1,60,000 2,00,000 30,000 2,50,000 10,000 8,75,000 8,75,000 They agreed to take C into Partnership on 1st April, 2021 on the following terms: (i) Goodwill is to be valued at 2,00,000. C is unable to bring cash for his share of goodwill. So, it was decided that due credit for goodwill be given to A and B for their sacrifice in favour of C through C's current account. (ii) C pays 1,40,000 as his capital for 1/5th share in the future profits. (iii) Stock and Furniture to be reduced by 10%. (iv) A provision @ 5% for doubtful debts to be created on debtors. (v) Land and building to be appreciated by 20%. (vi) Capital Accounts of the partners be readjusted on the basis of their profit sharing arrangement and any excess or deficiency is to be transferre Accounts. to their Current Prepare Revaluation Account and Partners Capital Accounts. (10 Marks) A and B are partners, sharing profits and losses in the proportion of 3/4th and 1/4th As at 31st March, 2021, following is the Balance Sheet of A and B. Balance Sheet as at 31st March, 2021 (3) Liabilities Capital accounts A B Creditors General reserve 2,85,000 1,55,000 Assets Cash in hand Cash at bank Sundry Debtors 4,40,000 3,75,000 Stock 60,000 Bills receivable Land and building Office furniture () 1,15,000 1,10,000 1,60,000 2,00,000 30,000 2,50,000 10,000 8,75,000 8,75,000 They agreed to take C into Partnership on 1st April, 2021 on the following terms: (i) Goodwill is to be valued at 2,00,000. C is unable to bring cash for his share of goodwill. So, it was decided that due credit for goodwill be given to A and B for their sacrifice in favour of C through C's current account. (ii) C pays 1,40,000 as his capital for 1/5th share in the future profits. (iii) Stock and Furniture to be reduced by 10%. (iv) A provision @ 5% for doubtful debts to be created on debtors. (v) Land and building to be appreciated by 20%. (vi) Capital Accounts of the partners be readjusted on the basis of their profit sharing arrangement and any excess or deficiency is to be transferre Accounts. to their Current Prepare Revaluation Account and Partners Capital Accounts. (10 Marks)

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