Question

Partnership Question No. 04 - Admission of New partney Saman and Kamal have been in partnership for many years sharing profits and losses in the ratio 5:3 respectively. The following was their statement of financial position as at 31 December 2017 Rs Goodwill Plant and machinery Rs 12,400 16,320 28.720 Inventory Accounts receivable Cash at bank 6,420 4,100 626 Total assets 11.146 39.866 Sundry accounts payable Total assets less current liabilities (5.928) 33.938 Capital: Saman Kamal Total capital 19,461 14,477 33.938 On 1 January 2018, they decided to admit Nimal as a partner on the condition that she contributes Rs 12,000 as her capital but that the plant and machinery and inventory should be revalued at Rs 16,800 and Rs 6,100 respectively, with the other assets, remaining at their book values. The goodwill was agreed to be valueless.

Answer 1

a i)
Goodwill A/c
Particulars	Debit	Particulars	Credit
Bal b/d	12400	By Saman Capital A/c	7750	12400*5/8
		By Kamal Capital A/c	4650	12400*3/8
	12400		12400
a ii)
Revaluation A/c
Particulars	Debit	Particulars	Credit
To Inventory A/c	320	By Plant & Machinery	480	16800-16320
(6420-6100)
To Saman Capital A/c	100	160*5/8
To Kamal Capital A/c	60	160*3/8
	480		480
a iii)
Capital A/c
Particulars	Debit			Particulars	Credit
	Saman	Kamal	Nimal		Saman	Kamal	Nimal
To Goodwill A/c	7750	4650		Bal b/d	19461	14477
				By Revaluation A/c	100	60
To Bal c/d	11811	9887	12000	By Bank A/c			12000
	19561	14537	12000		19561	14537	12000
b)
Statement of Financial Position
Plant & Machinery	16800
Inventory	6100
Accounts receivables	4100
Cash at Bank	12626
Total Assets	39626
Sundry Accounts payable	5928
Capital
Saman	11811
Kamal	9887
Nimal	12000
Total Equity & Liabilities	33698

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