Question

Jo and Sony are partners sharing profits and losses in the ratio of 2: 1. Their Balance Sheet as on 31^st December 2004 was as follows. Balance Sheet As on 31^st December 2004

Ebo is admitted into the partnership on the Balance Sheet date on the basis of the following. 

1. Ebo will bring Rs. 50,000 as his capital. 

2. Stock in trade should be decreased by Rs. 5,000 

3. Plant and Machinery should be increased to Rs. 35,000 and Land and Building should be appreciated by 10%. 

4. Bills payable and creditors be decreased by 5% and 10% respectively.

Record necessary journal entries, prepare revaluation account and partner’s capital account and also prepare the Balance sheet after Ebo’s admission.

Answer 1

Journal

Revaluation A/c

Partner’s Capital A/c

Balance sheet as on 1^st january 2005