question_answer

A, B and C are partners sharing profits equally. They decided that in future C will get l/5th share in profits. On the day of change, following is their balance sheet: Balance Sheet as at......

Liabilities		Amt (Rs.)	Assets		Amt (Rs.)
Creditors		12,000	Cash		5,400
Capital A/cs			Debtors	14,400
A	9,000		(-) Reserve	(2,400)	12,000
B	9,000		Stock		7,500
C	5,400	23,400	Machinery		4,500
			Building	6,000
		35,400			35,400

On this date, building have been valued at Rs. 9,000, stock to be reduced by Rs. 300 and provision for doubtful debts to be reduced by Rs. 900. Prepare necessary ledger accounts and balance sheet.

Answer:

Dr                                                         Revaluation Account                                                               Cr

Particulars		Amt (Rs.)	Particulars	Amt (Rs.)
To Stock A/c		300	By Building A/c	3,000
To Profit Transferred to Capital A/cs			By Provision for Doubtful Debts A/c	900
A's Capital A/c	1,200
B's Capital A/c	1,200
C's Capital A/c	1,200	3,600
		3,900		3,900

Dr                                                         Partners' Capital Account                                                        Cr

Particulars	A (Rs.)	B (Rs.)	C (Rs.)	Particulars	A (Rs.)	B (Rs.)	C (Rs.)
To Balance c/d	10,200	10,200	6,600	By Balance b/d	9,000	9,000	5,400
				By Revaluation A/c (Profit)	1,200	1,200	1,200
	10,200	10,200	6,600		10,200	10,200	6,600

Balance Sheet as at......

Liabilities		Amt (Rs.)	Assets		Amt (Rs.)
Creditors		12,000	Debtors	14,400
Capital A/cs			(-) Provision	(1,500)	12,900
A	10,200		Stock		7,200
B	10,200		Machinery		4,500
C	6,600	27,000	Building		9,000
			Cash		5,400
		39,000			39,000