A and B were partners in a firm sharing profits and losses in the ratio...
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Accounting
A and B were partners in a firm sharing profits and losses in the ratio of 3:2. On 1st April 2020 their Balance Sheet was as follows:
Balance Sheet of A&B (as on 1st April 2020)
| OMR | OMR | |
| Cash Debtors Less: Provision Stock Furniture Buildings Land
Creditors Bills Payable General Reserve Capitals: A B
|
200,000 (10,000)
500,000 380,000 | 70,000
190,000 220,000 120,000 300,000 400,000 1,300,000
120,000 180,000 120,000
880,000 1,300,000 |
On 1st April 2020 they decided to admit C into partnership giving him 1/5th share.
He brings in OMR 350,000 as his share of capital and OMR 250,000 as his goodwill. The partners decided to revalue the assets as follows
- Land was to be appreciated by 10% and Buildings was to be depreciated by OMR 80,000
- Furniture value was to be reduced by OMR 40,000
- Provision for bad debts is to be increased to OMR 11000
Required:
(a) You are required to show all the ledger accounts necessary to record the revaluation.
(b) Draw up a balance sheet as at 1 April 2020
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