Among the Existing Partners 3.

25
(hapter 3 Change in Profit Sharing Ratio
Profits, Losses and Reserves:
Lalution Calrulatin of Net Led of Acumulatrd L,75,000
A/c
I'roit & loss (25,000)
lAsAdvertisement Suspense A/c 1,50,000
Net ettet

Partners:
C'alculatuon of Gan and Sacrifice of has
share (? 25,000/ 1,50,000) as he has been debited and Vinay
I'ratvck has gained 1/6
1,50,000) as he has been credited.
slcritied 1/6 share (? 25,000R
Calculatien of Old Profit-sharing Ratio: Prateek
Naman
Vinay
Particulars
1/3 1/3
1/3
New Profit Share (Given) -1/6(Gain)
(Note) 1/6 (Sacrifce)
Proft Share Sacrificed/Acquired 1/3 + 1/6=3/6 1/3 or 2/6 1/3- 1/6= 1/6
Old Proft Share
new share
getting old share and gain is deducted from the
Sacrifice isadded in new share for
for getting old share. 3:2:1; Vinay's sacrifice =1/6; Prateek's gain =
1/6.
=3/6:2/6: 1/6 or
Old Profit-sharing Ratio
IMPORTANT NOTE
Accounts,
profits and losses are adjusted through Partners Capital the
When Reserves, accumulated shown at their old values in
and losses will continue to be
Reserves, accumulated profits
(reconstituted) firm.
Balance Sheet of the new

AND REASSESSMENT OF LIABILITIES

4. REVALUATION OF ASSETS
changes and
revalued and the liabilities are reassessed when the profit-sharing ratio Partners'
Assets are debit of the
loss arising from it is transferred to the credit or
the gain (profit) or
profit-sharing ratio. The reason for revaluation of assets and
Capital Accounts in their old
increase or decrease in the value of assets and liabilities
reassessment of liabilities is that any
change in profit-sharing ratio is for the period before the change in profit
up to the date of old profit-sharing ratio.
partners in their
sharing ratio. Therefore, it is shared by the
The partners may decide to: of the firm: or
record revised (changed) values of assets and liabilities in the books
(i)
revised (changed) values of assets and liabilities in the books of the firm.
(i) not to record the follows:
each of the above is different as
The accounting treatment under
recorded
of assets and liabilities are to be
(i) When revised (changed) values titled
liabilities are recorded in an account
Revaluation of assets and reassessment of
Account'. Increase in the value of assets
'Revaluation Account or Profit & Loss Adjustment decrease in the
decrease in the amount of liabilities are credited to this account while
and account. Unrecorded
amount of liabilities are debited to this
value of assets and increase in the balance in
liabilities are debited to this account. The
assets, if any, are credited and unrecorded side and loss,
the account is gain (profit), if total of
credit side is more than the total of debit
credit side. Gain (Profit) or loss so determined is
if total of debit side is more than the total of profit-sharing ratio.
Accounts in their old
Credited or debited toPartners' Capital (or Current)
 3.26 Double Entry Book
KeepingCBSE XII
Accounting Entries to Record the Revaluation of Assets and Reassessment of
1. For
increase in the value of an asset
2. For decrease
Asset A/c (Individually)
To Revaluation A/C
in the value of an asset
..Dr.
Revaluation A/c ..Dr.
Liabiltiey
To Asset A/c (Individually)
3. For
increase the amount of a liability Revaluation A/c ...Dr.
To Liability A/c (Individually)
4. For decrease in the amount of a liability Liability A/c (Individually) ...Dr.
To Revaluation A/c
5. For recording an unrecorded asset Unrecorded Asset A/c ...Dr.
To Revaluation Ac
6. For recording an unrecorded liability Revaluation A/c ...Dr.
To Unrecorded Liability A/c
7. For transfer of Balance in Revaluation Account: Revaluation A/c ..Dr.
(a) If total of credit side is more than the total
of debit side (Net Gain)
To Partners' Capital (or Current) A/cs [lprofinditv-shari
idualnlyg inratiolod)
(b) If total of debit side is more than the total
of credit side (Net Loss)
Partners' Capital (or Current) A/cs .Dr. [Individually in old
To Revaluation Ac
profit-sharing ratio)
Expenses on Reconstitution of the Firm
Expenses may be incurred by the firm to give effect to the change in profit-sharing rabo
These expenses may be incurred as remuneration to apartner or as payment to an outside
party for rendering services. The expenses so incurred are debited to Revaluation Account
being expenses relating to reconstitution of the firm. The Journal entry passed is:
(i) When Remuneration is paid to a Partner:
Revaluation A/c ..Dr.
To Concerned Partner's Capital A/c
(Remuneration credited to concerned Partner's Capital Account)
Remuneration paid to a partner means partner is paid for the services rendered by
him but expenses are borne by the firm. However, if remuneration paid to a partner
includes expenses also, expenses are borne by the partner. In case, the question is
silent as to who (firm or partner) paid the expenses, it is assumed that partner has
paid the expenses.
Jf the partner is to bear the expenses and also has been paid by him, no entry is passu
In case, expenses that were to be borne by the partner but are paid by the frm, followin3
entry is passed:
Concerned Partner's Capital A/c ...Dr.
To Cash/Bank A/c
(Expenses to be borne by the partner paid by the firm)
(i) When Expenses are incurred and paid by the firn:
Revaluation A/c
..Dr.
To Cash/Bank A/c
(Expenses for reconstituting the firm)
Jo brief. Revaluation Account is debited with the amount that is borne by the firm.
 Chapter 3 Change in Profit-Sharing Ratio Amongthe Existing Partners 3.27
Specimen of Revaluation Account
REVALUATION ACCOUNT C.

Particulars Particulars
To Assets A/c (Individually) By Assets A/c (Individually)
-Decrease in value on revaluation -Increase in value on revaluation
To Liabilities A/c (Individually) By Liabilities A/c (Individually)
-Increase in amount on reassessment -Decrease in amount on reassessment
To Unrecorded Liabilities A/c By Unrecorded Assets A/c *..

To Partner's Capital A/c (Remuneration) By Loss* on Revaluation transferred to

To Cash/Bank A/c (Expenses) Partners' Capital (or Current) A/cs
To Gain (Profit)* on Revaluation transferred
to Partners' Capital (or Current) A/cs

*Only one will appear at a time.

Important Note: When Revaluation Account is prepared, assets and liabilities in the Balance Sheet of
the reconstituted hrm are shown at their revised (changed) values.
Illustration 20.

Anil, Manvi and Payal are partners sharing profits and losses in the ratio of5:3:2. Their
Balance Sheet as at 31st March, 2023 stood as follows:
Liabilities Assets

Land and Building 2,60,000

Capital A/cs:
Ani 3,50,000 Machinery 3,50,000
Manvi 2,50,000 Stock 90,000

Payal 3,00,000 9,00,000 Bills Receivable 70,000

General Reserve 20,000 Sundry Debtors 1,00,000
Workmen Compensation Reserve 30,000 Cash in Hand 25,000
Sundry Creditors 50,000 Cash at Bank 1,05,000
10,00,000 10,00,000

They decided to share profits and losses in the ratio of 2: 2:1 w.e.f. 1st April, 2023 on the
following terms:
() Land and Building be appreciated by 10%.
(ii) Machinery be reduced by 15%.
(iii) Stock be increased to1,00,000.
(iv) Provision for Doubtful Debts be created @5% on Sundry Debtors.
(V) A Creditor of 5.000 is not to claim the dues. Hence, it is to be written back.
(vi) Aclaim on account of Workmen Compensation is 10,000.
(VI) An expense of 2,000 was paid by the firm for getting the value of Land and Building
certified from a Chartered Engineer.
Fass the Journal entries and prepare Revaluation Account.
 Particulars L.F.
Date
Dr.)
2023
1 General Reserve A/c ..Dr.
April
To Anil's Capital A/c
20,000
To Manvi's Capital A/c
To Payal's Capital A/c
(General Reserve credited to Partners Capital Accounts in their
oldproft-sharing ratio)
..Dr.
Workmen Compensation Reserve A/c 30,000
To Workmen Compensation Claim A/c
To Anil's Capital A/c 10,00
To Manvis Capital A/c 1000
To Payal's Capital A/c
(Workmen Compensation Reserve, after adjusting claim, credited to
Partners' Capital Accounts in their old profit-sharing ratio)
Land and Building A/c ...Dr. 26,000
..Dr. 10,000
Stock A/c
To Revaluation A/c 36,0
(Increase in value of land and building and stock recorded)
..Dr. 57,500
Revaluation A/c
To Machinery A/c 5250
To Provision for Doubtful Debts A/c S/000
(Decrease in value of Machinery recorded and provision for doubtful
debts made)
Sundry Creditors A/c .Dr. 5,000
To Revaluation A/c S,000
(Amount not payable written back)
Revaluation A/c .Dr. 2,000
To Cash/Bank A/c 2,00
(Expense for valuation of Land and Building)
Anil's Capital A/c ...Dr. 9,250
..Dr. 5,550
Manvi's Capital A/c
Payal's Capital A/c .Dr. 3,700
18500
To Revaluation A/c
(Loss on revaluation debited to Partners' Capital Accounts in their
old profit-sharing ratio)

REVALUATION ACCOUNT
Dr

Particulars Particulars
26000
To Machinery Alc 52,500|By Land and Building A/c 10000
To Provision for Doubtful Debts Alc 5,000| By Stock A/c 500
To Cash/Bank A/c (Expenses) 2,000| By Sundry CreditorsA/c
By Loss transferred to: 9,250
Anil's Capital A/c 5,550 18.50
Manvi's Capital A/c 3,700
Payal's Capital A/c 59,500
59,500
 Chapter 3. Change in Profit-Sharing Ratio AmongtheExisting Partners D.
Illustration 21.
Radhika, Bani and Chitra were partners in a firm sharing profits and losses in the ratio of
2:3:1. With effect from Ist April, 2018, they decided toshare future profits arnd losses in the
On that date their Balance Sheet showed a debit balance of 24,000 in Profit &
ratio of 3:2:1.
LossAAccount. and a balance of 1,44,000 in General Reserve.
agreed that:
It was als0
of
(a) The goodwill the firm be valued at 1,80,000.
The Land (having book value of 3,00,000) will be valued at 4,80,000.
(CBSE 2019)
Pass the necessary Journal entries for the above changes.
Solution: JOURNAL

Particulars L.F. Dr.) Cr. )

Date
2018
Radhika's Capital A/c ...Dr. 8,000
April
..Dr. 12,000
Bani's Capital A/c
..Dr. 4,000
Chitra's Capital A/c
To Profit &Loss A/c 24,000
(Undistributed loss transferred to Partners' Capital Accounts)
General Reserve A/c ..Dr. 144,000
48,000
To Radhika's Capital Alc
72,000
To Bani's Capital A/c
To Chitra's Capital A/c 24,000
(General Reserve transferred to Partners' Capital Accounts)
...Dr. 30,000
Radhikas Capital A/c
30,000
To Bani's Capital A/c
(Adjustment entry made for goodwill) (Note)
...Dr. 1,80,000
Land A/c
To Revaluation A/c
1,80,000
(Land revalued)
Revaluation A/c ...Dr. 1,80,000
60,000
To Radhika's Capital A/c
90,000
To Bani's Capital A/c
To Chitra's Capital A/c 30,000

(Gain on Revaluation transferred to Partners' Capital AcCounts)

Note: Calculation of Sacrificed or Gained Profit Share ofeach Partner:
Sacrificed Profit Share =Old Profit Share - New Profit Share
- 1/6 =0.
Radhika =2/6 - 3/6= (1/6) (i.e., gain); Bani= 3/6- 2/6 = 1/6(i.e., sacrifice); Chitra= 1/6
Radhika isagaining partner and Bani is a sacrificing partner.
recorded
(i1) When revised (changed) values of assets and liabilities are not to be
Gain (Profit) or Loss on Revaluation of Assets and Reassessment of Liabilities is adjusted
through Partners Capital Accounts by passing an adjustment entry by debiting/crediting the
Capital (or Current) Accounts of gaining partners and crediting/debiting the sacrificing partrers.
In this regard, following steps are taken:
 3.30Double Entry Book Keeping-CBSE XII
Step 1. Calculatc of the Net Efect of
(i) Incrcase in the value ofRevaluation:
Assets
(ii) Add: Decrease in amount of
(iii) Less: Decrease in value of Liabilities
(iv) Assets
Less: Increase in amount of
Net Effect of Revaluation Liabilities
Step 2. Find
Sacrificed/(Gaibned) Profit Share of Each Partner:
(i) Old Profit Share
A B

(ü) New Profit Share ..

(iii) Sacrificed/(Gained) Profit Share (i - ii) :|:||

Step 3. Calculate Proportionate Amount of Net Effect of
For Gaining Partner = Gained Profit Share x Net Revaluation:
Effect of Revaluation
For Sacrificing Partner Sacrificed Profit
Share x Net Effect of Revaluation
Step 4. Pass the following Journl entry:
For Gain (Proft) on Revaluation For Loss onRevaluation
Gaining Partners' Capital (or Current) A/cs .Dr. Sacrificing Partners' Capital (or Current) Alcs
To Sacrificing Partners' Capital (or To Gaining Partners' Capital (or
Current) A/cs Current) Alce
Illustration 22.
Sita, Reeta and Geeta are sharing profits and losses in the
profits and losses in the ratio of 2:3:5 with effect from ratio of 5:3:2. They decided to shos
1st April, 2023. They also decide
record the effect of the following revaluations without affecting the book values of the assets and
liabilities by passing an Adjustment Entry:
Book Values (8) Revised Values ()
Land and Building 5,00,000 5,50,000
Plant and Machinery 2,50,000 2,40,000
Sundry Creditors 60,000 55,000
Outstanding Expenses 60,000 75,000
Pass the necessary Adjustment Entry.
Solution:
Step 1. Calculation of Net Effect of Revaluation:
(i) Increase in value of Land and Building 50,000
(ii) Decrease in amount of Sundry Creditors
5,000
(ii) Decrease in value of Plant and Machinery (10,000)
(iv) Increase in the amount of Outstanding Expenses (15,000)
Gain (Profit) on Revaluation 30,000
Step 2. Calculation of Sacrificed/(Gained) Profit Share: Sita Reeta Geeta
(i) Old Profit Share 5/10 3/10 2/10
(ii) New Profit Share 2/10 3/10 5/10
(iüi) Sacrificed/(Gained) Profit Share (i - ii) 3/10 -3/10
Sacrifice (Gain)
 Chapter 3- Change in Profit-Sharing Ratio Among the Existing Partners 3.31
Calculation of Proportionate Amount of Share of Giin (Proft) on Revaluatton:
Sita's Sacrificed Share =3/10 × 30,000 - 9,000;
Cieta's Gained Share = 3/10 × 30,000=9.000.
Step 4. JOURNAL
Date
Particulars LF. Dr. ) Cr. )

2023
April 1 Geeta's Capital A/c ...Dr. 9,000
To Sita's Capital A/c 9,000
(Proportionate amount of gain (profit) on revaluation adjusted through
asingle entry)
|lustration 23.
Ashi, Kiran and Madhu are partners sharing profits andlosses in the ratioof3:2:1. They decided
to shareprofits and losses in the ratio of 1:2:3 with effect from 1st April, 2023. They also decide
th record the effect of the following revaluation without affecting the book values of the assets
and liabilities by passing an adjustment entry:
Book Values () Revised Values ()
Land and Building 5,50,000 5,00,000
Plant and Machinery 2,40,000 2,50,000
Sundry Creditors 130,000 1,20,000
Pass the necessary adjustment entry.
Solution:
Step 1. Calculation of Net Effect of Revaluation:
Decrease in value of Land and Building (50,000)
Increase in value of Plant and Machinery 10,000
Decrease in amount of Sundry Creditors 10,000
Loss on Revaluation (30,000)
Step 2. Calculation of Sacrificed/(Gained) Profit Share: Aashi Kiran Madhu
(i) Old Profit Share 3/6 2/6 1/6
(ii) New Profit Share 1/6 2/6 3/6
(ii) Sacrificed/(Gained) Profit Share (i - ii) 2/6 -2/6
Sacrifice (Gain)
Step 3. Aashi's Sacrificed Share =30,000 x 2/6 = 10,000
Madhu's (Gained) Share=30,000 x 2/6 = 10,000

Step 4. JOURNAL

Date Particulars L.F. Dr. () Cr. )

2023
April 1 Aashi's Capital A/c ..Dr. 10,000
To Madhu's Capital A/c 10,000
(Adjustment made on loss of revaluation)
Note: In the given case, loss on revaluation is to be adjusted. So, Aashi (sacrificing partner) willbe debited and
Madhu (gaining partner) will be credited by? 10,000 (1/3rd of 30,000).
 JTED FIRM
Reonstitution of the firm results in a change in the capitals of partners
of some assets and amount of liabilities. Accounts that have been and in the
affected
change in values are prepared to determine the amounts to be shown in
of the reconstituted firm. the Balance
Illustration 24.
Ashok, Bhim and Chetan were partners in a firm sharing profits in the
ratio
Their Balance Sheet as on 31st March, 2015 was as follows:

Liabilities
BALANCE SHEET OF ASHOK, BHIM AND CHETAN as on 31st March, 2015
Assets
f3:2:1
Creditors 1,00,000 Land
Bills Payable 40,000 Building
General Reserve
Capital A/cs:
60,000 Plant
Stock 1,0000
Ashok 2,00,000 Debtors
Bhim 1,00,000 Bank
6004
Chetan 50,000 3,50,000 1000
5,50,000
550,00
Ashok, Bhim and Chetan decided to share the future profits equally, w.ef 1st Apnl u:
For this it was agreed that:
(a) Goodwill of the firm be valued at 3,00,000.
(b) Land be revalued at 1,60,000 and building be depreciated by 6%.
(c) Creditors of 12,000 were not likely to be claimed and hence be written off.
Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the
reconstituted firm. (Delhi 2016)
Solution:
Dr. REVALUATION ACCOUNT

Particulars Particulars

To Building A/c 6,000| By Land A/c 60,0

To Gain (Profit) transferred to Partners' By Creditors A/c 12,000
Capital A/cs:
Ashok 33,000
Bhim 22,000
Chetan 11,000 66,000
72,000 72,0

Dr. PARTNERS' CAPITAL ACCOUNTS

Particulars Ashok ) Bhim () Chetan ( Particulars |Ashok ) Bhim )Chetan (

2,00,000 1.00.000 50000
To Ashok's Capital A/c 50,000| By Balance b/d 10000
To Balance c/d 3,13,000| 1,42,000 21,000| By General Reserve A/c 30,000 20,000
33,000 22,000 1,00
By Revaluation A/c
By Chetan's Capital A/c 50,000
3,13,000 142.000 71,00
3,13,000 142,000 71,000
 Chapter 3. Change in Profit-Sharing Ratlo Among the Existing Partners J.3
BALANCE SHEET OF RECONSTITUTED FIRM as at 1ist April, 2015
Labilities Assets
CapstalA/cs:
Ashok
Bhim
3,13,000
1,42,000
Land
Building
Plant
-
1,60,000
94,000
2,00,000
Chetan 21,000 4,76,000 Stock 80,000
Creditors 88,000 Debtors 60,000
Bills Payable 40,000 Bank 10,000
6,04,000 6,04,000

Working Notes:
1Calculation of Sacrificed/(Gained) Profit Share of each Partner:
(A) (B) (A - B)
Old Profit Share New Profit Share Sacrificed/(Gained) Profit Share
Ashok 3/6 1/3 1/6 (Sacrifice)
Bhim 2/6 1/3
Chetan 1/6 1/3 -1/6 (Gain)
2. Value of Firm's Goodwill= 3,00,000.
Since. Chetan is gaining and Ashok is sacrificing, Chetan will compensate Ashok by paying 50,000
(ie, 1/6th of 3,00,000).
Illustration 25.
Amar, Tarun and Akhil are partners sharing profits and losses in the ratio of 5 :3: 2. Their
Balance Sheet as at 31st March, 2023 was as follows:
Liabilities Assets

Sundry Creditors 1,90,000Cash in Hand 25,000

General Reserve 80,000Bank Balance 2,25,000
Profit &Loss A/c 30,000 Sundry Debtors 1,10,000
Capital A/cs: Less: Provision for Doubtful Debts 10,000 1,00,000
Amar 3,00,000 Stock 2,00,000
Tarun 1,80,000 Furniture 50,000
Akhil 1,20,000 6,00,000 Computers 3,00,000
9,00,000 9,00,000

Profit-sharing ratio among the partners was agreed to be 2:2:1wef. 1st April, 2023. They
agreed to the following:
(1) Stock to be increased to 2,20,000.
(ü) Provision for Doubtful Debts to be reduced by 2,000.
(i) Furniture to be reduced by 20%.
") Computers to be reduced to 2,70,000.
() Goodwill of the firm is valued at 1,00,000.
ne partners decided to carry the assets, liabilities, General Reserve and Profit &Loss Account
at the
Same values in the Balance Sheet of the new firm.
Pass an adjustment entry giving effect to the above arrangement and prepare Balance Sheet
after adjustments.
 3.34 Double Entry Book Keeping-CBSE XI
Solution: JOURNAL
Date Particulars
2023 LF.
April 1 Tarun's Capital A/C
To Amar's Capital A/c ...Dr.

(Adjustment entry for revaluation of assets and

liabilities, reserves, profit &loss account and goodwillreassessment
of 19,200
due to change
in profit-sharing ratio)

BALANCE SHEET OF RECONSTITUTED FIRM as at 1st April, 2023

Liabilities Assets
Sundry Creditors 1.90,000Cash in Hand
General Reserve 80,000 Bank Balance
Profit &Loss A/c
30,000 Sundry Debtors
Capital A/cs:
Amar
3,19,200
Less: Provision for Doubtful Debts
Stock
1,110,0,000000
Tarun
1,60,800 Furniture
Akhil 1,20,000
6,00,000Computers
9,00,000

Working Notes:
1. Calculation of the Net Amount to be Adjusted:
Net Effect of Revaluation:
Loss due to decrease in value of assets and increase in amount of liabilities:
Furniture
Computers (1000
3000)
Gain (Profit) due to increase in value of assets and decrease in amount of liabilities: (40,00)
Stock 20,000
-Provision for Doubtful Debts 2,000 22,0
Loss on Revaluation
(18,0
Add: Adjustments for: General Reserve 80,000
Profit & Loss A/c 3000
Goodwill 1.000
Net Amount to be adjusted 1.92,00
2. Calculation of Sacrificed/(Gained) Profit Share of each Partner:
Amar Tarun Akhil
(i) Old Profit Share 5/10 3/10 2/10
(ii) New Profit Share 2/5 2/5 1/5

(ii) Sacrificed/(Gained) Profit Share [(i) - ())

5-4
= 1/10
3-4
= -1/10 = 2-2 Ni
10 10 10

Sacrificing Partner (Gaining Partner)

Proportionate Amount to be Adjusted =?1,92,000 x1/10 =?192,000 x1/10
=19,200 (Cr) =19,200 (Dr.)
 Chapter 3 Change in Profht-Sharing Ratio Among the Existing Partners 3.35
Adjustment of Capital
Ihe artners may deide that after reconstitution of partnership, their capitals shall be in
their proit-sharing ratio. Adjustment will be required to give effect to it. Partner (partners)
hse capital (cap1tals) are deficient (short) after all adjustments than the required capital
yhave to bring more capital while partner (partrners) whose capital (capitals) is (are) in
surplus (exCess) of the required capital may withdraw surplus or excess capital. Deficiency
Surplus of Capital may be adjusted through Partners' Current Accounts.
Accounting Entries
() For Adjusting Shortage of Capital:
Bank A/c or Concerned Partner's Current A/c ...Dr.
To Concerned Partner's Capital A/c
(0) For Adjustng Surplus of Capital: ..Dr.
Concerned Partner's Capital Ac
To Bank A/c or Concerned Partner's Current A/c
Ilustration 26 (Adjustment of Capital through Cash). On
p0. Rand S were partners in a firm sharing profits in the ratio of 1: 4:2:3.
their Balance Sheet was as follows:
1st April, 2016,
BALANCE SHEET OF P, 0. RAND S as on 1st April, 2016
Assets
Liabilities
Fixed Assets 12,70,000
Capital A/cs: 5,30,000
2,00,000 Current Assets
3,00,000
4,00,000
5,00,000 14,00,000
S
Sundry Creditors 2,30,000
Workmen Compensation Reserve 1,70,000
18,00,000 18,00,000

share the future profits equally. For this purpose,

From the above date, partners decided to 2,70,000.
at
the goodwill of the firm was valued
The partners also agreed for the following:
Reserve was estimated at 2,00,000.
i) Claim against Workmen Compensation
according to the new profit-sharing ratio
(i) Capitals of the partners were to be adjusted
may be.
by bringing or paying cash as the case Accounts and the Balance Sheet of the
Prepare Revaluation Account, Partners' Capital (Delhi 2017)
reconstituted firm.
Solution: REVALUATION ACCOUNT
Dr
Particulars
Particulars
To Workmen Compensation Claim A/c 30,000By Loss on Revaluation transferred to:
Ps Capital A/c 3,000
2,00,000 -71,70,000) 12,000
Q's Capital Alc
R's Capital A/c 6,000
9,000 30,000
Ss Capital A/C
30,000
30,000
 18,00,00 1/4=2/4) 40,50 13,50
S30,00
12700 Sacrihice
3/10 |/4
400,000 3,86,000
3,54,500
4,00,000 3/10-
RE)
2,00,000
3,00,000 40,50014,000 =-2/40 13,500
40.500
1,56,500 5,04,500
3,80,500
3,28,500 13,70,000
Ratio
Q 2016 Profit-sharing
2/10 1/4 -1/4 Gain
P() 1,86,000 April, R
2/10
1st
at 1/4=6/40
PARTNERS b/d Capital1)(WN
ACCOUNTS
CAPITAL A/c
A/c Cash/Bank as Assets
Current Sacrifice .Dr. .Dr.
New
Balance
ParticularsR's Fig.)
(Bal. FIRM Assets
Fixed 4/10 1/4 per
P's& RECONSTITUTED Partner: 4/10-
Assets 40,500) 13,500)
40,500)
as
By By By 13,500) fhrm
9,000| 1,62,0003,42,500 5,13,500| 18,00,000 each 1/10-1/4=-6/40
S) 13,70,000
3,42,500 2,00,000
2,30,000 6/40)
x2,70,000
2/40)
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