on March 31, 2021 is as follows. Liabilities Amount (RO) Assets Amount Creditors 315000 Cash Bills Payable 105000 Debtors General Reserve 210000 Stock Capital: 0 Plant 1. Ahmed 420000 Buildings 5. Wahid 210000 Profit & Loss Ac Bank Overdraft 315000 Equipment 31 Total 1575000 Total 157 On April 01, 2021, they agreed to admit Khalid into the firm for 1/5th Share of future profin the following terms: a) Building is revalued at b) Stock is revalued at 63 112 c) Goodwill is raised at 216

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
315000 Cash
26250
Bills Payable
105000 Debtors
367500
General Reserve
210000 Stock
157500
Capital
0Plant
131250
Ahmed
420000 Buildings
525000
Wahid
210000 Profit & Loss Ac.
Bank Overdraft
315000 Equipment
315000
Total
1575000 Total
1575000
On April 01, 2021, they agreed to admit Khalid into the firm for 1/5th Share of future profits on
the following terms:
2) Building s revalued at
630000
b) Stock is revalued at
112875
l Goodwill i raised at
210000
di Provuion for bad debts sto be made at 5%
e) Khalid has to bring in a Lapital
262500
n Khalid war onable to brina the amount of goodwill:
Pass Journal Lntries and Prepare Revaluation Account, Capiital Accounts and the Dalance Sheet of the
reconstituted firm.
Transcribed Image Text: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 315000 Cash 26250 Bills Payable 105000 Debtors 367500 General Reserve 210000 Stock 157500 Capital 0Plant 131250 Ahmed 420000 Buildings 525000 Wahid 210000 Profit & Loss Ac. Bank Overdraft 315000 Equipment 315000 Total 1575000 Total 1575000 On April 01, 2021, they agreed to admit Khalid into the firm for 1/5th Share of future profits on the following terms: 2) Building s revalued at 630000 b) Stock is revalued at 112875 l Goodwill i raised at 210000 di Provuion for bad debts sto be made at 5% e) Khalid has to bring in a Lapital 262500 n Khalid war onable to brina the amount of goodwill: Pass Journal Lntries and Prepare Revaluation Account, Capiital Accounts and the Dalance Sheet of the reconstituted firm.
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