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  1. Asked: September 18, 2024In:

    Abha and Ritu were partners sharing profits and losses in the ratio of 5:3

    aprabha2626 Digital marketing executive

    To address the partnership changes and adjustments for Abha, Ritu, and the newly admitted partner Sonal, we will follow these steps: Calculate Sonal's Share of Goodwill Adjust the Capital Accounts of Abha and Ritu Create a Provision for Doubtful Debts Prepare the New Balance Sheet 1. Calculate SonalRead more

    To address the partnership changes and adjustments for Abha, Ritu, and the newly admitted partner Sonal, we will follow these steps:

    1. Calculate Sonal’s Share of Goodwill
    2. Adjust the Capital Accounts of Abha and Ritu
    3. Create a Provision for Doubtful Debts
    4. Prepare the New Balance Sheet

    1. Calculate Sonal’s Share of Goodwill

    The total goodwill of the firm is valued at Rs. 96,000. Since Sonal is acquiring a 1/4th share of the business, her share of goodwill will be:

    Sonal s Share of Goodwill=14×96,000=24,000
    Sonal acquires this share from Abha and Ritu in the ratio of 2:1.

    • Abha’s share in goodwill:
    Abha s Share=23×24,000=16,000
    • Ritu’s share in goodwill:
    Ritu s Share=13×24,000=8,000

    2. Adjust the Capital Accounts of Abha and Ritu

    Since Sonal cannot contribute her share of goodwill in cash, Abha and Ritu will bear this cost by reducing their capital accounts.

    • New Capital for Abha:
    Abha s New Capital=Old Capital−Abha s Share in Goodwill=3,75,000−16,000=3,59,000
    • New Capital for Ritu:
    Ritu s New Capital=Old Capital−Ritu s Share in Goodwill=2,25,000−8,000=2,17,000

    3. Create a Provision for Doubtful Debts

    A provision for doubtful debts of Rs. 6,000 needs to be created. This will reduce the asset value in the balance sheet.

    Adjusting Debtors:

    • Debtors before provision: Rs. 82,000
    • Debtors after provision:
    Debtors After Provision=82,000−6,000=76,000

    4. Prepare the New Balance Sheet

    After all adjustments have been made (including the new capital accounts and provision for doubtful debts), we can prepare the new balance sheet.

    New Balance Sheet as at April 1st, 2022

    Liabilities

    • Bills Payable: Rs. 22,000
    • Creditors: Rs. 45,000
    • Workmen Compensation Fund: Rs. 40,000
    • General Reserve: Rs. 24,000
    • Profit and Loss A/c: Rs. (adjusted if necessary)
    • Capital Accounts:
      • Abha: Rs. 3,59,000
      • Ritu: Rs. 2,17,000
      • Sonal: (new partner) Contribution not specified but will be included as her capital account.

    Total Liabilities = Rs. (sum of all above)Assets

    • Cash in Hand: Rs. 12,000
    • Cash at Bank: Rs. 83,000
    • Debtors: Rs. 76,000 (after provision)
    • Stock: Rs. 66,000
    • Investments: Rs. 60,000
    • Furniture: Rs. 3,75,000
    • Machinery: Rs. 2,25,000
    • Goodwill: Rs. (adjusted if necessary)

    Total Assets = Rs. (sum of all above)

    Conclusion

    This new balance sheet reflects the changes due to Sonal’s admission into the partnership and includes necessary adjustments for goodwill and provisions for doubtful debts. Make sure to verify total assets equal total liabilities after adjustments to ensure accuracy in accounting records.

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  2. Asked: March 4, 2021In:

    Amazon Bose Soundbar Quiz Answers For Today 4th March 2021

    aprabha2626 Digital marketing executive

    Here I added the YouTube Video Link including the answers of Amazon Bose Soundbar Quiz. Watch the video and submit your answers to eligible for the lucky draw.

    Here I added the YouTube Video Link including the answers of Amazon Bose Soundbar Quiz. Watch the video and submit your answers to eligible for the lucky draw.

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