# Solve this :Partners' Capital Accounts, Revaluation Account and Balance Sheet Q. 19.    A and B are partners in a firm sharing profits and losses in the ratio 3 : 1. They admit C for 1/4th share on 31st March, 2014 when their Balance Sheet was as follows : The following adjustments were agreed upon : (a)    C brings in Rs. 16,000 as goodwill and proportional capital. (b)    Bad debts amounted to Rs. 3,000. (c)    Market value of investment is Rs. 4,500. (d)    Liability on account of workmen compensation reserve amounted to Rs. 2,000.   Prepare Revaluation A/c and Partners Capital Accounts.                                           (Sample Paper 2015)

Dear Student

 Revalution A/c Date Particulars Amount (in Rs) Date Particulars Amount (in Rs) Debtors 1,000 Capital A/c (1,000 in 3:1) A 750 B 250 1,000 1,000

 Partner's Capital A/c Particulars A B C Particulars A B C Revaluation A/c 750 250 Balance b/d 54,000 35,000 Goodwill 30,000 10,000 Investment Fluctuation Reserve 1,200 400 Workmen Compensation Reserve 3,000 1,000 Premium for Goodwill A/c 12,000 4,000 Cash A/c 23,200 Bal C/d 39,450 30,150 23,200 70,200 40,400 23,200 70,200 40,400 23,200

 Balance sheet Liabilities Amount (in Rs) Assets Amount (in Rs) Workmen Compensation Liability 2,000 Stock 15,000 Employees Provident Fund 17,000 Investment 4,500 Sundry Debtors 47,000 Cash 45,300 Capital A 39,450 B 30,150 C 23,200 111,800 111,800

 Goodwill Adjustment Share of Goodwill of C 16,000 Sacrificing Ratio 3:1 Distribution in Sacrificing Ratio in capital accounts of : A (16,000 x 3/4) 12,000 B (16,000 x 1/4) 4,000

 Capital Calculation of C New Profit Sharing Ratio 2:1:1 Capital of A and B after  all adjustments (39,450 + 30,150) 69,600 Cumulative share of A and B after C's Admission (1 - 1/4) 3/4 Based on above total capital of firm (69,600 x 4/3) 92,800 Proportionate Capital of C (92,800 x 1/4) 23,200

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