Mr. Deepak and Mr. Abhishek were in partnership sharing profits and losses in the proportion of 3 : 1 respecti

Question 21 of 28

Mr. Deepak and Mr. Abhishek were in partnership sharing profits and losses in the proportion of 3 : 1 respectively. Their Balance Sheet as on 31st March 2019 stood as follows:

Balance Sheet as on 31st March 2019
Liabilities	Amount (₹)	Assets	Amount (₹)
Capital Account:		Land and Building	32,000
Mr. Deepak	1,20,000	Plant and Machinery	60,000
Mr. Abhishek	40,000	Furniture	22,000
General Reserve	16,000	Stock	40,000
Sundry Creditors	80,000	Sundry Debtors	64,000
Bank Overdraft	42,000	Cash	80,000
	2,98,000		2,98,000
They admitted Adinath into partnership on 1st April 2019 on the terms being that-
He shall have to bring in ₹ 40,000 as his capital for 1/5 share in future profits and ₹ 20,000 as his share of goodwill.
Furniture to be depreciated by 20%.
Stock should be appreciated by 10%.
Building should be appreciated by 5%.
A provision for 5% R.D.D. to be created on sundry debtors.
Capital account of all partners be adjusted in their new profit sharing ratio through cash account.
Prepare:
Revaluation Account
Partners' Capital Account
New Balance Sheet of the firm.

Maharashtra MsbshseMaharashtra HSC (MSBSHSE) Board 2025Subjective· 10mImportance★★★★★

75% · 21/28 Questions

🔒 Locked · start free trial →

You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.

Start your 14-day free trial to unlock the full solution →

Revalue assets → loss ₹2,000 (Deepak 1,500, Abhishek 500 in 3:1). Share General Reserve ₹16,000 (12,000 : 4,000) and goodwill ₹20,000 (15,000 : 5,000 in the 3:1 sacrifice ratio) to old partners. New ratio 3:1:1. Fix total capital from Adinath's ₹40,000 for 1/5 = ₹2,00,000, so Deepak ₹1,20,000, Abhishek ₹40,000, Adinath ₹40,000 — the surplus in the old partners' accounts (Deepak ₹25,500, Abhishek ₹8,500) is paid out in cash. Balance Sheet totals ₹3,22,000.

Working Note 1 — New profit-sharing ratio and sacrifice ratio

Adinath's share = 1/5. Remaining 4/5 shared by Deepak : Abhishek in old ratio 3 : 1.
Deepak = 4/5 × 3/4 = 12/20; Abhishek = 4/5 × 1/4 = 4/20; Adinath = 4/20.
New ratio = 12 : 4 : 4 = 3 : 1 : 1.
Sacrifice = Old − New: Deepak 15/20 − 12/20 = 3/20; Abhishek 5/20 − 4/20 = 1/20 → sacrifice ratio 3 : 1, so goodwill ₹20,000 is shared ₹15,000 : ₹5,000.

Revaluation Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Furniture A/c (20% of 22,000)	4,400	By Stock A/c (10% of 40,000)	4,000
To R.D.D. A/c (5% of 64,000)	3,200	By Building A/c (5% of 32,000)	1,600
		By Loss on revaluation:
		Deepak (3/4)	1,500
		Abhishek (1/4)	500
Total	7,600	Total	7,600

Partners' Capital Accounts

Particulars	Deepak (₹)	Abhishek (₹)	Adinath (₹)	Particulars	Deepak (₹)	Abhishek (₹)	Adinath (₹)
To Revaluation A/c (loss)	1,500	500	—	By Balance b/d	1,20,000	40,000	—
To Cash A/c (withdrawn)	25,500	8,500	—	By Cash A/c (capital)	—	—	40,000
To Balance c/d	1,20,000	40,000	40,000	By Cash A/c (goodwill)	—	—	—
				By General Reserve A/c	12,000	4,000	—
				By Premium (Goodwill) A/c	15,000	5,000	—
Total	1,47,000	49,000	40,000	Total	1,47,000	49,000	40,000

Working Note 2 — Capital adjustment: Adinath brings ₹40,000 for 1/5 share, so total capital of the firm = 40,000 × 5 = ₹2,00,000, split in the new ratio 3:1:1 → Deepak ₹1,20,000, Abhishek ₹40,000, Adinath ₹40,000. Deepak's balance before adjustment = 1,20,000 + 12,000 + 15,000 − 1,500 = 1,45,500, so he withdraws 1,45,500 − 1,20,000 = ₹25,500. Abhishek's balance = 40,000 + 4,000 + 5,000 − 500 = 48,500, so he withdraws 48,500 − 40,000 = ₹8,500.

Working Note 3 — Cash Account

Receipts	₹	Payments	₹
To Balance b/d	80,000	By Deepak's Capital A/c	25,500

Start your 14-day free trial to unlock the full solution →

Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

CBSE 2025Set ANNUAL10 marks

Q. Mr. Deepak and Mr. Abhishek were in partnership sharing profits and losses in the proportion of 3 : 1 respectively. Their Balance Sheet as on 31st March 2019 stood as follows: Balance Sheet as on 31st March 2019 Liabilities Amount (₹) Assets Amount (₹) Capital Account: Land and Building 32,000 Mr. Deepak 1,20,000 Plant and Machinery 60,000 Mr. Abhishek 40,000 Furniture 22,000 General Reserve 16,000 Stock 40,000 Sundry Creditors 80,000 Sundry Debtors 64,000 Bank Overdraft 42,000 Cash 80,000 2,98,000 2,98,000 They admitted Adinath into partnership on 1st April 2019 on the terms being that- He shall have to bring in ₹ 40,000 as his capital for 1/5 share in future profits and ₹ 20,000 as his share of goodwill. Furniture to be depreciated by 20%. Stock should be appreciated by 10%. Building should be appreciated by 5%. A provision for 5% R.D.D. to be created on sundry debtors. Capital account of all partners be adjusted in their new profit sharing ratio through cash account. Prepare: Revaluation Account Partners' Capital Account New Balance Sheet of the firm.

›Reveal solution

Working Note 1 — New profit-sharing ratio and sacrifice ratio

Adinath's share = 1/5. Remaining 4/5 shared by Deepak : Abhishek in old ratio 3 : 1.
Deepak = 4/5 × 3/4 = 12/20; Abhishek = 4/5 × 1/4 = 4/20; Adinath = 4/20.
New ratio = 12 : 4 : 4 = 3 : 1 : 1.
Sacrifice = Old − New: Deepak 15/20 − 12/20 = 3/20; Abhishek 5/20 − 4/20 = 1/20 → sacrifice ratio 3 : 1, so goodwill ₹20,000 is shared ₹15,000 : ₹5,000.

Revaluation Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Furniture A/c (20% of 22,000)	4,400	By Stock A/c (10% of 40,000)	4,000
To R.D.D. A/c (5% of 64,000)	3,200	By Building A/c (5% of 32,000)	1,600
		By Loss on revaluation:
		Deepak (3/4)	1,500
		Abhishek (1/4)	500
Total	7,600	Total	7,600

Partners' Capital Accounts

Particulars	Deepak (₹)	Abhishek (₹)	Adinath (₹)	Particulars	Deepak (₹)	Abhishek (₹)	Adinath (₹)
To Revaluation A/c (loss)	1,500	500	—	By Balance b/d	1,20,000	40,000	—
To Cash A/c (withdrawn)	25,500	8,500	—	By Cash A/c (capital)	—	—	40,000
To Balance c/d	1,20,000	40,000	40,000	By Cash A/c (goodwill)	—	—	—
				By General Reserve A/c	12,000	4,000	—
				By Premium (Goodwill) A/c	15,000	5,000	—
Total	1,47,000	49,000	40,000	Total	1,47,000	49,000	40,000

Working Note 3 — Cash Account

Receipts	₹	Payments	₹
To Balance b/d	80,000	By Deepak's Capital A/c	25,500

Start your 14-day free trial to see the full solution →

CBSE 2022Set ANNUAL10 marks

Q. Ram and Shyam were in partnership sharing profits and Losses in the proportion of 3 : 1 respectively. Their Balance sheet as on 31st March, 2020 stood as follows: Balance Sheet as on 31st March, 2020 Liabilities Amount (₹) Assets Amount (₹) Sundry Creditors 80,000 Cash 80,000 Bills Payable 42,000 Sundry Debtors 64,000 Capital Accounts: Land and Building 32,000 Ram 1,20,000 1,60,000 Stock 40,000 Shyam 40,000 Plant and Machinery 60,000 General Reserve 16,000 Furniture 22,000 2,98,000 2,98,000 They admit Bharat into partnership on 1 st April 2020. The term is that He shall have to bring in cash ₹ 40,000 as his Capital for 1/5 th share in future profit and ₹ 20,000 as his share of Goodwill. A provision for 5% doubtful debts to be created on sundry debtors. Stock should be appreciated by 5% and Land and Building be appreciated by 20%. Furniture to be depreciated by 20%. Capital Accounts of all partners be adjusted in their new profit-sharing ratio through Cash Account. Prepare: Profit and Loss Adjustment Account Partners' Capital Account Balance Sheet of the new firm.

›Reveal solution

Bharat is admitted for 1/5 share. Revaluation gives a small profit of ₹800; General Reserve ₹16,000 and Bharat's goodwill ₹20,000 go to the old partners; capitals are then equalised in the new ratio 3:1:1 through Cash. Final Balance Sheet total = ₹3,22,000.

Working Note 1 — New profit-sharing & sacrificing ratio

Bharat's share = 1/5, so old partners keep 4/5, shared 3:1.

Ram = 4/5 × 3/4 = 12/20; Shyam = 4/5 × 1/4 = 4/20; Bharat = 4/20.

New ratio = 12 : 4 : 4 = 3 : 1 : 1.

Sacrifice: Ram 15/20 − 12/20 = 3/20; Shyam 5/20 − 4/20 = 1/20 → sacrificing ratio 3 : 1.

Goodwill ₹20,000 in 3:1 → Ram ₹15,000, Shyam ₹5,000.

Working Note 2 — Revaluation items

RDD 5% on Debtors 64,000 = ₹3,200 (loss); Furniture 20% of 22,000 = ₹4,400 (loss); Stock 5% of 40,000 = ₹2,000 (gain); Land & Building 20% of 32,000 = ₹6,400 (gain).

Working Note 3 — Capital adjustment

Bharat's ₹40,000 = 1/5 share ⇒ total capital of firm = ₹2,00,000.

Ram (3/5) = ₹1,20,000; Shyam (1/5) = ₹40,000; Bharat = ₹40,000. Surplus is paid out in cash.

Profit and Loss Adjustment (Revaluation) Account

Dr. Particulars	Amount (₹)	Cr. Particulars	Amount (₹)
To R.D.D. (5% on Debtors)	3,200	By Stock A/c (5% appreciation)	2,000
To Furniture A/c (20% dep.)	4,400	By Land & Building A/c (20% app.)	6,400
To Profit t/f to Capital A/cs — Ram 600, Shyam 200	800
Total	8,400	Total	8,400

Partners' Capital Accounts

Dr. Particulars	Ram	Shyam	Bharat	Cr. Particulars	Ram	Shyam	Bharat
To Cash A/c (withdrawn)	27,600	9,200	—	By Balance b/d	1,20,000	40,000	—
To Balance c/d	1,20,000	40,000	40,000	By Cash A/c	—	—	40,000
				By General Reserve	12,000	4,000	—
				By Revaluation A/c	600	200	—
				By Cash A/c (Goodwill)	15,000	5,000	—
Total	1,47,600	49,200	40,000	Total	1,47,600	49,200	40,000
…

Start your 14-day free trial to see the full solution →

←Previous questionQ9 — Decrease in the value of assets should be ___ to Profit and Loss Adjus…→Next questionQ11 — A ___ is an intangible asset. (a) Goodwill (b) Stock (c) Cash (d) Furn…

🎓Unlock everything free for 14 days

Unlock everything free for 14 days