49 :- Following is the balance sheet of Kusum, Sneh and Usha as on 31st March, 2025, who have agreed to share profits and losses in proportion of their capitals
On 1st April 2025, Kusum retired from the firm and the remaning partners decided to carry on the business. It was agreed to revalue the assets and reassess the liabilities on that date on the following basis:-
(a) Land and building be appreciated by 30%
(b) Mahinery be depreciated by 30%
(c) There were bad debts of Rs 35,000.
(d) The claim against workmen compensation reserve was Rs 15,000.
(e) Goodwill of the firm was valued at Rs 2,80,000 and Kusum’s share of goodwill was adjusted against the capital accounts of the continuing partners Sneh and Usha who have decided to share future profits in the ratio of 3:4 respectively.
(f) Capital of the new firm in total will be the same as before the retirement of Kusum and will be in the new profit sharing ratio of the continuing partners.
(g) Amount due to Kusum be settled by paying Rs 1,00,000 in cash and balance by transferring to her Loan account which will be paid later on.
Prepare revaluation account, Capital accounts of partners and the balance sheet of the new firm after Kusum’s retirement.
Solution :-
WORKING NOTES :-
(i)Calculation of gaining ratio
Old ratio = 2:3;2
New ratio = 3:4
Gaining ratio = new ratio – old ratio
Sneh = 3/7 – 3/7 = Nil
Usha = 4/7 – 2/7 = 2/7
(ii)Adjustment of goodwill
Total goodwill of the firm = Rs 2,80,000
Kusum’s share of goodwill = 2,80,000 x 2/7 = Rs 80,000
It is to be adjusted by Usha only because only Usha’s gains
(iii) Adjustment of capital
Total capital of the firm before Kusum Retires = Rs 14,00,000
New profit sharing ratio = 3:4
Sneh’s new capital = 3/7 x 14,00,000 = Rs 6,00,000
Usha’s new capital = 4/7 x 14,00,000 = Rs 8,00,000
