Saman and Kamal have been in partnership for many years sharing profits and losses in the ratio
Question:
Saman and Kamal have been in partnership for many years sharing profits and losses in the ratio 5:3 respectively. The following was their statement of financial position as at 31 December, 2017.
Rs
Goodwill 12,400
Plant and machinery 16,320
28,720
Inventory 6,420
Accounts receivable 4,100
Cash at bank 626
11,146
Total assets 39,866
Sundry accounts payable (5,928)
Total assets less current liabilities 33,938
Capital: Saman 19,461
Kamal 14,477
Total capital 33,938
On 1 January 2018, they decided to admit Nimal as a partner on the condition that she contributes Rs 12,000 as her capital but that the plant and machinery and inventory should be revalued at Rs 16,800 and Rs 6,100 respectively, with the other assets, remaining at their book values. The goodwill was agreed to be valueless.
You are required to prepare:
- The ledger entries dealing with the above in the following accounts:
- Goodwill account,
- Revaluation accounts,
- Capital accounts
Fundamentals of Advanced Accounting
ISBN: 978-0077862237
6th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik