Question

Sanju and Manju were partners in a firm sharing profits and losses in the ratio of 3:2. Their Balance Sheet on 31^st March, 2023 was as follows:

\[ \begin{array}{|l|r|l|r|} \hline \textbf{Liabilities} & \textbf{Amount (₹)} & \textbf{Assets} & \textbf{Amount (₹)} \\ \hline \text{Capitals:} & & \text{Plant and Machinery} & 80,000 \\ \quad \text{Sanju} & 1,40,000 & \text{Furniture} & 1,32,000 \\ \quad \text{Manju} & 1,20,000 & \text{Investments} & 60,000 \\ \quad \text{Total Capitals} & 2,60,000 & \text{Debtors} & 76,000 \\ \text{General Reserve} & 40,000 & \text{Less: Provision for doubtful debts} & (4,000) \\ \text{Creditors} & 1,80,000 & \text{Cash at Bank} & 1,36,000 \\ \hline \text{Total Liabilities} & 4,80,000 & \text{Total Assets} & 4,80,000 \\ \hline \end{array} \] 

Adjustments:
- Furniture was to be depreciated by ₹6,000.
- Investments were valued at ₹72,000.
- Plant and Machinery was taken over by Sanju and Manju in their profit-sharing ratio.
- Uday will bring in proportionate capital and ₹10,000 as his share of goodwill premium in cash.

Hint:

Adjustments for revaluation, goodwill, and new partner’s capital must be carefully accounted for during admission of a new partner.

Answer 1

Revaluation Account: \[ \begin{array}{|l|r|l|r|} \hline \textbf{Dr.} & \textbf{Amount (₹)} & \textbf{Cr.} & \textbf{Amount (₹)} \\ \hline \text{Furniture (Depreciation)} & 6,000 & \text{Investments (Appreciation)} & 12,000 \\ \hline \text{Profit transferred to:} & & & \\ \quad \text{Sanju’s Capital A/c} & 3,600 & & \\ \quad \text{Manju’s Capital A/c} & 2,400 & & \\ \hline \text{Total} & 12,000 & \text{Total} & 12,000 \\ \hline \end{array} \]