Ahmed and Wahid are partners sharing profits and losses in the ratio of 3:1. Their Balance sheet as on March 31, 2021 is as follows. Liabilities Amount (RO) Assets Amount (RO) Creditors 210000 Cash 17500 Bills Payable 70000 Debtors 245000 General Reserve 140000 Stock 105000 0 Plant 280000 Buildings Capital: 87500 Ahmed 350000 Wahid 140000 Profit & Loss Ac 35000 Bank Overdraft 210000 Equipment 210000 Total 1050000 Total 1050000 On April 01, 2021, they agreed to admit Khalid into the firm for 1/5th Share of future profits on the following terms: a) Building is revalued at 420000 b) Stock is revalued at c) Goodwill is raised at 75250 140000 d) Provision for bad debts is to be made at 5% e) Khalid has to bring in a Capital 175000 f) Khalid was unable to bring the amount of goodwill Pass Journal Entries and Prepare Revaluation Account, Capital Accounts and the Balance Sheet of the reconstituted firm.

Ahmed and Wahid are partners sharing profits and losses in the ratio of 3:1. Their Balance sheet as on March 31, 2021 is as follows. Liabilities Amount (RO) Assets Amount (RO) Creditors 210000 Cash 17500 Bills Payable 70000 Debtors 245000 General Reserve 140000 Stock 105000 0 Plant 280000 Buildings Capital: 87500 Ahmed 350000 Wahid 140000 Profit & Loss Ac 35000 Bank Overdraft 210000 Equipment 210000 Total 1050000 Total 1050000 On April 01, 2021, they agreed to admit Khalid into the firm for 1/5th Share of future profits on the following terms: a) Building is revalued at 420000 b) Stock is revalued at c) Goodwill is raised at 75250 140000 d) Provision for bad debts is to be made at 5% e) Khalid has to bring in a Capital 175000 f) Khalid was unable to bring the amount of goodwill Pass Journal Entries and Prepare Revaluation Account, Capital Accounts and the Balance Sheet of the reconstituted firm.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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