32 :- Suresh, Ramesh, Mahesh and Ganesh were partners in a firm sharing profits in the ratio of 2 : 2 : 3 : 3. On 1st April, 2016, their Balance Sheet was as follow
From the above date, the partners decided to share the future profits equally. For this purpose, the goodwill of the firm was valued at Rs 90,000. It was also agreed that:
a) Claim against Workmen Compensation Reserve will be estimated at Rs 1,00,000 and fixed assets will be depreciated by 10%.
b) The Capitals of the partners will be adjusted according to the new profit sharing ratio.
Prepare revaluation account, partners capital accounts and the balance sheet of the reconstituted firm.
Solution :-
WORKING NOTES :-
Old ratio = 2:2:3:3
New ratio = 1:1:1:1
Suresh = 2/10 – 1/4 = 8 – 10/40 = -2/40
Ramesh = 2/10 – 1/4 = 8 – 10/40 = -2/40
Mahesh = 3/10 – 1/4 = 12 – 10/40 = 2/40
Ganesh = 3/10 – 1/4 = 12 – 10/40 = 2/40
Calculation of adjustment of capitals
Total capital of the firm = 78,500 + 1,28,500 + 1,79,000 + 2,29,000
= Rs 6,15,000
Suresh’s capital = 6,15,000 x 1/4 = Rs 1,53,750
Ramesh’s capital = 6,15,000 x 1/4 = Rs 1,53,750
Mahesh’s capital = 6,15,000 x 1/4 = 1,53,750
Ganesh’s capital = 6,15,000 x 1/4 = 1,53,750