1

PARTNER SHIP ACCOUNTS – I

1. A and B are carrying on business in a partnership, sharing Profit & Loss in the ratio of 2:
3. Their Balance Sheet as at 31-3-2006 was as under.
Balance sheet
Dr. Cr.
Particulars Amount Particulars Amount
Rs. Rs.
Sundry Creditors 50,000 Cash in hand 30,000
Capital Accounts: Cash at Bank 20,000
A 2,80,000 Sundry Debtors 1,00,000
B 4,20,000 7,00,000 Stock 2,00,000
Furniture 50,000
Buildings 3,50,000
7,50,000 7,50,000
On that date they admit ‘C’ into partnership and give him 1/4 th share in the future parofits
on the following terms.
(a) ‘C’ is to bring in Rs.3,00,000 as his Capital and Rs.1,00,000 as goodwill, which
sum is to remain in the business.
(b) Stock & Furniture are to be reduced in value by 10%
(c) Buildings are to be appreciated by Rs.50,000
(d) A provision of 5% to be created on Sundry Debtors for doubtful debts.
Write Journal entries to record the above arrangement & show the opening Balance
Sheet of the new firm.

2. Reddy and Naidu are partners in a business. On 31-3-2006, their Balance Sheet stood
as following:
Liabilities Amount Assets Amount
Rs. Rs.
Creditors 1,00,000 Cash 15,000
Bank Overdraft 95,000 Stock 1,00,000
Capital accounts: Debtors 2,50,000
Reddy ‘s Capital 2,50,000 Less: R.D.D. 50,000 2,00,000
Naidu ‘s Capital 2,50,000 Land & Buildings 4,00,000
Profit & Loss a/c 20,000
7,15,000 7,15,000
They have admitted Gupta into partnership for 1/3rd share on the following terms.
(a) Stock is revalued at Rs.80,000
(b) Land & Buildings are revalued at Rs.6,00,000
(c) Provision for bad debts is to be reduced by Rs.20,000
(d) Creditors are to be paid Rs.10,000 more
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(e) Goodwill is created at on average of the last 3 years profits, which amounted to
Rs.40,000, Rs.80,000, Rs.60,000.
(f) Gupta should introduce 40% of the adjusted Capitals of both Reddy and Naidu.
Open various ledgers a/c ‘s & show opening balance sheet after the admission of Gupta.

3. The following is the balance sheet of Raghu & Tendulkar who had been sharing Profits &
Losses in the ratio of 3:1 on 31-3-2006.
Liabilities Amount Assets Amount
Rs. Rs.
Creditors 3,50,000 Cash at Bank 3,00,000
General Reserve 1,00,000 Debtors 2,00,000
Capital Accounts: Stock 1,50,000
Bindu 3,00,000 Land & Buildings 2,00,000
Sindhu 2,00,000 5,00,000 Furniture 1,00,000
9,50,000 9,50,000
They agreed to take Sonal into partnership on the following terms:
(a) Hindu pays Rs.2,00,000 as his Capital for 1/5th share in the future profits.
(b) Stock & Furniture be reduced by 10% & 5% provision for doubtful debts be
created on debtors.
(c) The value of Land & Buildings be appreciated by 20%
(d) Goodwill to be valued at Rs.80,000
(e) The Capital accounts of the partners, are to re-adjusted on the basis of their profit
sharing arrangement. Adjustment of Capitals to be made by cash.
Prepare Balance Sheet, Revaluation Account, Capital Accounts is new firm.

4. Mary and Rajani are partners sharing their profits in the ratio of 3:2 on 31-12-2005. The
Balance Sheet is as under.
Liabilities Amount Assets Amount
Rs. Rs.
Creditors 16,000 Cash in hand 2,000
Bank Overdraft 10,000 Cash in Bank 10,000
Bills payable 12,000 Debtors 20,000
Capital Accounts: Stock 18,000
Mary 48,000 Furniture 10,000
Rajani 24,000 72,000 Buildings 30,000
Machinery 20,000
1,10,000 1,10,000
Adjustments:
1-1-97 Bindu was admitted as partner in the following conditions:
(a) Firm ‘s Goodwill valued for Rs.10,000
(b) Depreciate stock, Furniture, Machinery @ 10%
(c) Appreciate Buildings @ 10%
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(d) Provide Reserve for Bad debts at 5% on the debtors

(e) Bindu has to bring Rs.16,000 in cash for his share of Capital
Prepare necessary accounts & the new balance sheet of the firm after Rajesh ‘s entry.

5. Given below is the Balance Sheet of A and B who are carrying on a partnership business
as on 31-3-2005. A and B share Profits and Losses in the ratio of 2:1.
Liabilities Amount Assets Amount
Rs. Rs.
Bills payable 10,000 Cash in hand 10,000
Creditors 58,000 Cash at Bank 40,000
Outstanding Expenses 2,000 Sundry debtors 60,000
Capital Accounts: Stock 40,000
A 1,80,000 Plant & Machinery 1,00,000
B 1,50,000 3,30,000 Buildings 1,50,000
4,00,000 4,00,000
‘C’ is admitted as a partner on the date of the Balance Sheet on the following terms
(a) ‘C’ will bring in rs.1,00,000 as his Capital & Rs.60,000 as his Capital & Rs.60,000
as his share of Goodwill for ¼ share of profits.
(b) Plant & Machinery is to be appreciated to Rs.1,20,000 & the value of Building is
to be appreciated by 10%
(c) Stock is found over valued by Rs.4,000
(d) A provision for bad & doubtful debts is to be created at 5% on debtors.
(e) Creditors were unrecorded to the extent of Rs.1,000
Pass the Journal entries, prepare the profit & Loss adjustment account and show the
Balance sheet after the admission of ‘C’.

6. A and B sharing profits in the proportion of 3/5th & 2/5th showed the following as their:
Balance Sheet as on 31-3-2006
Liabilities Amount Assets Amount
Rs. Rs.
Creditors 40,000 Cash at Bank 5,000
Bills payable 12,000 Land and Buildings 25,000
Reserve Fund 10,000 Plant and Machinery 35,000
Capital Accounts: Furniture & Fixtures 1,500
A 45,000 Stock 20,500
B 25,000 70,000 Debtors 45,000
1,32,000 1,32,000
They admitted ‘C’ into partnership on 1-4-2006.
(a) C shall bring in cash Rs.5,000 as his share of Goodwill, the amount to be
ratained in the business & that the shall bring in Rs.15,000 as Capital for a fourth
share in the future profits. For the purpose of ‘C’ admission the firms assets were
agreed to be revalued as under.
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Land and Building to be taken at Rs.30,000. Plant and Machinery to be reduced

by 10% and provision of 5% on debtors is to be made for doubtful debts. The
stock is to be taken at a value of Rs.25,000
Prepare the necessary ledger accounts in the books of the firm and opening Balance
sheet of a new firm.

7. P and Q are in Partnership and their Balance Sheet as on 31-3-2006 is given below:
Liabilities Amount Assets Amount
Rs. Rs.
Prepaid expenses 20,000 Cash in hand 8,000
Creditors 60,000 Cash at Bank 76,000
Bank overdraft 80,000 Debtors 80,000
Bills payable 40,000 Furniture 24,000
Reserve 36,000 Machinery 84,000
Capital Accounts: Buildings 1,14,000
P 90,000
Q 60,000 1,50,000
3,86,000 3,86,000
They decide to admit ‘R’ as a new partner on the following terms:
(a) Depreciation to be calculated at 5% on Machinery, Buildings and Furniture
(b) Provide reserve on debtors at 5%
(c) Creation of Goodwill account for Rs.60,000
(d) ‘R’ to bring Rs.90,000 as Capital for his 1/4th share.
Prepare Profit & Loss Adjustments and the new Balance Sheet. Give also the new ratio.
Solution 1:
Journal Entries
Date Particulars L.F. Debit Credit
Rs. Rs.
2006 Revaluation a/c Dr. 30,000
Mar 31 To Stock a/c 20,000
To Furniture a/c 5,000
To Provision for Bad debts a/c 5,000
(Being decrease in the value of assets and
Provision for bad debts)
Buildings a/c Dr. 50,000
To Revaluation a/c 50,000
(Being increase in the value of building)
Revaluation a/c Dr. 20,000
To A’s Capital a/c 8,000
To B ‘s Capital a/c 12,000
(Being revaluation profit distributed to
partners)
Cash a/c Dr. 4,00,000
To ‘C’ capital a/c 3,00,000
To Goodwill a/c 1,00,000
(Being new partner brings cash for his
share of capital and goodwill)
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Goodwill a/c Dr. 1,00,000

To ‘A’ Capital a/c 40,000
To ‘B’ Capital a/c 60,000
(Being Goodwill created to old partner’s
capital a/c)

Revaluation Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Stock a/c 20,000 By Buildings a/c 50,000
To Furniture a/c 5,000
To Provision for 5,000
doubtful debts a/c
To A’s Capital a/c 8,000
To B’s Capital a/c 12,000
50,000 50,000

A’s Capital Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 3,28,000 By Balance b/d 2,80,000
By Revaluation a/c 8,000
(profit)
By Goodwill a/c 40,000
(1,00,000 x 2/5)
3,28,000 3,28,000
By Balance b/d 3,28,000

B’s Capital Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 4,92,000 By Balance b/d 4,20,000
By Revaluation a/c 12,000
(profit)
By goodwill a/c 60,000
(1,00,000 x 3/5)
4,92,000 4,92,000
By Balance b/d 4,92,000

C’s Capital Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 3,00,000 By Cash a/c 3,00,000
3,00,000 3,00,000
By Balance b/d 3,00,000
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Cash/ Bank account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance b/d By Balance c/d 4,50,000
Cash Rs.30,000
Bank Rs.20,000 50,000
To C ‘s Capital a/c 3,00,000
To goodwill a/c 1,00,000
4,50,000 4,50,000
To Balance b/d 4,50,000

Goodwill Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To A’s capital a/c 40,000 By Cash a/c 1,00,000
To B’s Capital a/c 60,000
1,00,000 1,00,000

Balance Sheet of A, B and C as on 1-4-2006

Liabilities Amount Assets Amount
Rs. Rs.
Sundry creditors 50,000 Cash in hand / Bank 4,50,000
Capital Accounts: Sundry Debtors 1,00,000
A 3,28,000 Less: Provision for 5,000 95,000
bad debts
B 4,92,000 Stock 1,80,000
(2,00,000 – 20,000)
C 3,00,000 11,20,000 Furniture 45,000
(50,000 – 5,000)
Buildings 4,00,000
(3,50,000 + 50,000)
11,70,000 11,70,000

Solution 2:
Revaluation Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Stock 20,000 By Buildings a/c 2,00,000
To creditors 10,000 By Provision for bad 20,000
debts
(50,000 – 30,000)
To Reddy Capital 95,000
a/c
To Naidu Capital 95,000
a/c
2,20,000 2,20,000
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Reddy Capital Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 3,85,000 By Balance b/d 2,50,000
By Revaluation a/c 95,000
(Profit)
By Profit & Loss a/c 10,000
By Goodwill a/c 30,000
3,85,000 3,85,000
By Balance b/d 3,85,000

Gupta Capital Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 3,08,000 By Cash a/c 3,08,000
(7,70,000 x 40/100)
3,08,000 3,08,000
By Balance b/d 3,08,000

Goodwill Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Reddy ‘s 30,000 By Balance c/d 60,000
capital a/c
To Naidu Capital 30,000
a/c
60,000 60,000
To Balance b/d 60,000

Cash Book Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance b/d 15,000 By Balance c/d 3,23,000
To Gupta capital 3,08,000
a/c
3,23,000 3,23,000
To Balance b/d 3,23,000

Balance sheet of Reddy, Naidu, Gupta as on 1-4-2006

Liabilities Amount Assets Amount
Rs. Rs.
Creditors 1,10,000 Cash / Bank 3,23,000
(1,00,000 + 10,000)
Bank overdraft 95,000 Stock 80,000
(1,00,000 – 20,000)
Capital Accounts: Debtors 2,50,000
Reddy 3,85,000 (-) Provision for bad debts 30,000 2,20,000
Naidu 3,85,000 Land & Buildings 6,00,000
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(4,00,000 + 2,00,000)
Gupta 3,08,000 Goodwill 60,000
12,83,000 12,83,000

Working Notes:
1. Calculation of goodwill:
Total profits 40,000 + 80,000 + 60,000 = 1,80,000
Average profits = 1,80,000 / 3 = 60,000
Goodwill = 1,80,000
2. Calculation of Gupta ‘s capital
Capital of Gupta & Naidu = 3,85,000 + 3,85,000
= 7,70,000
Gupta introduce 40% of the adjusted
Capital of Reddy and Naidu = 7,70,000 x 40/100 = 3,08,000
Gupta ‘s Capital = 3,08,000

Solution 3:
Revaluation Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Stock a/c 15,000 By Land & Building 40,000
To Furniture a/c 10,000
To Provision for 10,000
bad debts a/c
To Raghu capital 3,750
a/c
To Tendulkar 1,250
Capital a/c
40,000 40,000

Raghu Capital Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 6,00,000 By Balance b/d 3,00,000
By Revaluation a/c 3,750
By General Reserve 75,000
By Goodwill a/c 60,000
By Bank a/c 1,61,250
6,00,000 6,00,000
By Balance b/d 6,00,000

Tendulkar Capital Account

Dr. Cr.
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Date Particulars LF Amount Date Particulars LF Amount

Rs. Rs.
To Cash 46,250 By Balance b/d 2,00,000
To Balance c/d 2,00,000 By Revaluation a/c 1,250
By General Reserve 25,000
By Goodwill a/c 20,000
2,46,250 2,46,250
By Balance b/d 2,00,000

Sonal Capital Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 2,00,000 By Cash a/c 2,00,000
2,00,000 2,00,000
By Balance b/d 2,00,000

Goodwill Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Raghu Capital 60,000 By Balance b/d 80,000
a/c
To Tendulkar 20,000
capital a/c
80,000 80,000
To Balance b/d 80,000

Cash / Bank Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance b/d 3,00,000 By Tendulkar capital 46,250
a/c
To Sonal capital 2,00,000 By Balance c/d 6,15,000
a/c
To Raghu capital 1,61,250
a/c
6,61,250 6,61,250
To Balance b/d 6,15,000

Balance Sheet of Bindu, Sindhu, Hindu as on 1-4-2006

Liabilities Amount Assets Amount
Rs. Rs.
Creditors 3,50,000 Cash 61,500
Capital Accounts: Debtors 2,00,000
Raghu 6,00,000 Less: Provision for 10,000 1,90,000
bad debts
Tendulkar 2,00,000 Stock 1,35,000
(1,50,000 – 15,000)
Sonal 2,00,000 Land & Buildings 2,40,000
(2,00,000 + 40,000)
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Furniture 90,000
(1,00,000 – 10,000)
Goodwill 80,000
13,50,000 13,50,000
Working Notes:
1. Calculation of new profit sharing Ratio: (old Ratio 3 : 1)
Total Profit = 1
Sonal ‘s share = 1/5
Remaining share = 1- 1/5 = 4/5
Raghu’s Share = 4/5 x ¾ = 12/20
Tendulkar ‘s Share = 4/5 x ¼ = 4/20
Sonal ‘s Share = 1/5 x 4/4 = 4/20
New profit sharing ratio = 12 : 4 : 4
= 3:1:1

2. Total Capital:
1/5th share capital = 2,00,000
Total Capital = 2,00,000 x 5/1 = 10,00,000
3. Partners capital:
Raghu = 10,00,000 x 3/5 = 6,00,000
Tendulkar = 10,00,000 x 1/5 = 2,00,000
Sonal = 10,00,000 x 1/5 = 2,00,000

Solution 4:
Revaluation Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Provision for 1,000 By Buildings a/c 3,000
bad debts
To Stock 1,800 By Mary Capital 1,680
To Furniture 1,000 By Rajani capital 1,120
To Machinery 2,000
5,800 5,800

Mary capital account

Dr. Cr.
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Date Particulars LF Amount Date Particulars LF Amount

Rs. Rs.
To Revaluation 1,680 By Balance b/d 48,000
a/c(Loss)
To Balance c/d 52,320 By goodwill a/c 6,000
54,000 54,000

rajani capital Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Revaluation a/c 1,120 By Balance b/d 24,000
(loss)
To Balance c/d 26,880 By Goodwill a/c 4,000
28,000 28,000
By Balance b/d 26,880

Bindu Capital Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 16,000 By Cash a/c 16,000
16,000 16,000
By Balance b/d 16,000

Goodwill Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Mary capital 6,000 By Balance c/d 10,000
a/c (loss)
To Rajani capital 4,000
a/c
10,000 10,000
To Balance b/d 10,000

Cash / Bank Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance By Balance c/d 28,000
Cash 2,000
Bank 10,000
To Bindu capital 16,000
a/c
28,000 28,000
To Balance b/d 28,000
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Balance Sheet of Mary, Rajani and Bindu as on 1-4-2006

Liabilities Amount Assets Amount
Rs. Rs.
Creditors 16,000 Cash / Bank 28,000
Bank overdraft 10,000 Debtors 20,000
Bills payable 12,000 Less: Provision for 1,000 19,000
bad debts
Capitals: Stock 18,000
Mary 52,320 Less: Depreciation 1,800 16,200
Rajani 26,880 Furniture 10,000
Bindu 16,000 Less: Depreciation 1,000 9,000
Buildings 30,000
Add: Appreciation 3,000
Machinery 20,000
Less: Depreciation 2,000 18,000
Goodwill 10,000
1,33,200 1,33,200

Solution 5:
Revaluation Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Creditors 1,000 By Plant & Machinery 20,000
To Provision for 3,000 By Buildings 15,000
bad debts
To Stock 4,000
To Capitals
A 18,000
B 9,000
35,000 35,000

A ‘s capital Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 2,38,000 By Balance b/d 1,80,000
By Revaluation a/c 18,000
(Profit)
By Goodwill a/c 40,000
2,38,000 2,38,000
By Balance b/d 2,38,000

B ‘s Capital Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 1,79,000 By Balance b/d 1,50,000
By Revaluation a/c 9,000
(profit)
By Goodwill 20,000
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1,79,000 1,79,000
By Balance b/d 1,79,000

C ‘s capital Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 1,00,000 By Cash a/c 1,00,000
1,00,000 1,00,000
By Balance b/d 1,00,000

Goodwill Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To A’s capital a/c 40,000 By Cash a/c 60,000
To B’s capital a/c 20,000
60,000 60,000

Cash / Bank Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance b/d By Balance b/d 2,10,000
Cash 10,000
Bank 40,000
To Goodwill a/c 60,000
To Z ‘s capital a/c 1,00,000
2,10,000 2,10,000
To Balance b/d 2,10,000

Balance Sheet of A, B, C as on 1-4-2006

Liabilities Amount Assets Amount
Rs. Rs.
Bills payable 10,000 Debtors 60,000
Creditors 58,000 Less: Provision for 3,000 57,000
bad debts
Add: Add. Creditors 1,000 59,000 Stock 40,000
Outstanding expenses 2,000 Less: Depreciation 4,000 36,000
Capital Accounts: Plants & Machinery 1,00,000
A 2,38,000 Add: Appreciation 20,000 1,20,000
B 1,79,000 Buildings 1,50,000
C 1,00,000 Add: Appreciation 15,000 1,65,000
Cash / Bank 2,10,000
5,88,000 5,88,000

Solution 6:
Revaluation Account
Dr. Cr.
 14

Date Particulars LF Amount Date Particulars LF Amount

Rs. Rs.
To Plant & 3,500 By Land & Buildings 5,000
Machinery
To Provision for 2,250 By Stock 4,500
bad debts
To A capital a/c 2,250
To B capital a/c 1,500
9,500 9,500

A’s Capital Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 56,250 By Balance b/d 45,000
By General Reserve 6,000
(10,000 x 3/5)
By Goodwill 3,000
(5,000 x 3/5)
By Revaluation a/c 2,250
56,250 56,250
By Balance b/d 56,250

B ‘s Capital Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance c/d 32,500 By Balance b/d 25,000
By General reserve 4,000
(10,000 x 2/5)
By Goodwill 2,000
(5,000 x 2/5)
By Revaluation a/c 1,500
32,500 32,500
By Balance b/d 32,500

C’s Capital Accounts

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance b/d 15,000 By Cash a/c 15,000
15,000 15,000

Goodwill Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To ‘A’ Capital a/c 3,000 By Cash a/c 5,000
To ‘B’ Capital a/c 2,000
5,000 5,000
 15

Cash / Bank Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance b/d 5,000 By Balance c/d 25,000
To Goodwill 5,000
To ‘C’ Capital a/c 15,000
25,000 25,000
To Balance b/d 25,000

Balance sheet of A, B, C as on 1-4-2006

Liabilities Amount Rs. Assets Amount Rs.
Creditors 40,000 Cash / Bank 25,000
Bills payable 12,000 Land & Buildings 30,000
(25,000 + 5,000)
Capital Accounts: Plant & Machinery 31,500
(35,000 – 3,500)
A 56,250 Furniture & Fittings 1,500
B 32,500 Stock 25,000
(20,500 + 4,500)
C 15,000 Debtors 42,750
(45,000 – 2,250)
1,55,750 1,55,750

Solution 7:
Revaluation Capital Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Provision for 4,000 By P Capital 7,550
bad debts
To Furniture 1,200 By Q capital 7,550
To Machinery 4,200
To Buildings 5,700
15,100 15,100

P ‘s Capital Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Revaluation 7,550 By Balance b/d 90,000
(loss)
To Balance c/d 1,30,450 By General Reserve 18,000
By Goodwill 30,000
1,38,000 1,38,000
By Balance b/d 1,30,450

Q ‘s Capital Account
Dr. Cr.
 16

Date Particulars LF Amount Date Particulars LF Amount

Rs. Rs.
To Revaluation 7,550 By Balance b/d 60,000
(Loss)
To Balance c/d 1,00,450 By General Reserve 18,000
By Goodwill 30,000
1,08,000 1,08,000
By Balance b/d 1,00,450

R’s Capital Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance b/d 90,000 By Cash 90,000
90,000 90,000
By Balance b/d 90,000

Goodwill Account
Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Hari Capital a/c 30,000 By Balance c/d 60,000
To Giri Capital a/c 30,000
60,000 60,000
To Balance b/d 60,000

Cash / Bank Account

Dr. Cr.
Date Particulars LF Amount Date Particulars LF Amount
Rs. Rs.
To Balance b/d By Balance c/d 1,74,000
Cash 8,000
Bank 76,000
To R Capital a/c 90,000
1,74,000 1,74,000

Balance Sheet of P, Q and R as on 1-4-2006

Liabilities Amount Assets Amount
Rs. Rs.
Outstanding expenses 20,000 Debtors 80,000
Creditors 60,000 Less: Provision for bad 4,000 76,000
debts
Bank overdraft 80,000 Furniture 24,000
Bills payable 40,000 Less: Depreciation 1,200 22,800
Capitals: Machinery 84,000
P 1,30,450 Less: Depreciation 4,200 79,800
Q 1,00,450 Buildings 1,14,000
R 90,000 Less: Depreciation 5,700 1,08,300
Goodwill 60,000
Cash / Bank 1,74,000
5,20,900 5,20,900
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