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
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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
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
75250
c) Goodwill is raised at
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.
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 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 75250 c) Goodwill is raised at 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.
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