Following information use in Question NO.5& 6 M/s. Mahima LLC a partnership firm starts the business with total capital of OMR 156,000. The assets and liabilities of the firm listed in the table below. 

Name of Account OMR Name of Account OMR 

Cash 54,000 

Bank Loan 48,000 

Sundry Debtors 84,000 

Bonds 60,000 

Stock 30,000 

Bills Payable 96,000 

Machinery 48,000 

Sundry Creditors 120,000 

Land 84,000 

Bank Overdraft 30,000 

Furniture 30,000 

General Reserve 60,000 

Premises 48,000 

Profit & Loss A/C 30,000 

Building 120,000 

A’s Capital Account 72,000 

Plant 72,000 

B’s Capital Account 48,000 

Bill Receivable 30,000 

C’s Capital Account 36,000 

The firm decided to admit D into the partnership for 1/5th of the future profits with the terms that D shall bring in a capital of OMR 60,000 and the Goodwill of the firm being valued at OMR 48,000 on 1.4.2020. The assets like Machinery, Land, Buildings and Plant are to be appreciated by 10% and Stock, Furniture, Premises are to be depreciated by 5%. Provision for Doubtful Debts to be made on Sundry debtors @ 5%, Discount on Creditors to be created against Sundry Creditors @ 2.5%, Provision for outstanding liability is also to be created at OMR 4,800 and Bank Loan is to be maintained. A, B and C sharing profits 3:2:1 as on 31.3.2020. 

Q5. Journalize the above transactions with narrations and prepare the Revaluation Account. Give your comment with reasons about the values which are debited and credited in the Revaluation Account. (2+2+1 = 5 Marks) 

Q6. Prepare Partners’ Capital Accounts and Balance Sheet of the reconstituted partnership firm. Give your views about the changes in the balance sheet after reconstitution.

Answer rating: 100% (QA)

Answer of Q5 Journal enteries in the books of Ms Mahima LLC SlNo Particulars 1 Cash ac Dr to Ds capital Being new partner D is admitted and bring capital 2 Cash ac Dr Bs capital ac Dr to As capital to ... View the full answer