2) V and K were partners sharing profits and losses as 60% to V and 40% to K. Their Balance Sheet as at 1st January, 2005 stood as under Balance Sheet Amount Assets Amount Liabilities Sundry creditors 96,000 Cash in Hand 4,000 Bills Payable 56,000 34,000 Sundry debtors Stock Capital accounts: 40,000 V: 90,000 Plant & machinery 80,000 K: 80,000 170,000 Land & Buildings 120,000 300,000 300,000 The partners agreed to admit E into the firm subject to revaluation of the following items: (i) Stock was to be reduced by RO 4,000 (ii) Land and Buildings were to be valued at RO 160,000 (iii) A provision of 2.5 % was to be created for doubtful debtors (iv) A liability of RO 2,600 for outstanding expenses had been omitted to be recorded in the books. E contributed RO 60,000 as his share of capital. Required: Prepare the revaluation account, capital accounts and the balance sheet after the above adjustment.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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