Answer :
To address the problem posed, let’s go through the necessary steps one by one.
### Step 1: Calculate Total Liabilities and Total Assets as of March 31, 2018
Using the figures from the balance sheet:
Total Liabilities
- Creditors: Rs. 20,000
- Workmen's Compensation Reserve: Rs. 30,000
- General Reserve: Rs. 24,000
- Bhavesh’s Capital: Rs. 32,000
- Chandra’s Capital: Rs. 28,000
Total Liabilities: Rs. 20,000 + Rs. 30,000 + Rs. 24,000 + Rs. 32,000 + Rs. 28,000 = Rs. 134,000
Total Assets
- Bank: Rs. 20,000
- Debtors: Rs. 13,000 – Rs. 1,000 (Provision) = Rs. 12,000
- Bills Receivable: Rs. 10,000
- Stock: Rs. 20,000
- Land & Building: Rs. 30,000
- Goodwill: Rs. 42,000
Total Assets: Rs. 20,000 + Rs. 12,000 + Rs. 10,000 + Rs. 20,000 + Rs. 30,000 + Rs. 42,000 = Rs. 134,000
Match confirmed: Both total liabilities and total assets are Rs. 134,000.
### Step 2: Adjustments for Alia's Admission
Alia is coming in with a 1/5 share.
#### (1) Goodwill Contribution
Alia brings Rs. 20,000 as her share of goodwill.
#### (2) Payment from Old Customer
An old customer, Anju, pays off Rs. 400 in cash. This amount increases the bank balance.
#### (3) Revaluation of Land & Building
The market value of the land and building is now Rs. 40,000 instead of the previously recorded Rs. 30,000. This is a Rs. 10,000 increase.
#### (4) Increase in Workmen's Compensation Reserve
The workmen’s compensation reserve is increased by Rs. 10,000, bringing it to Rs. 40,000.
#### (5) Account for Unaccounted Accrued Income
Recognize an unaccounted accrued income of Rs. 200.
### Step 3: Calculate New Capital Requirements
Calculation of New Workmen’s Compensation Reserve:
Old reserve: Rs. 30,000
Increase: Rs. 10,000
New reserve: Rs. 40,000
Calculation for New Total Capital:
- Original Bhavesh's Capital: Rs. 32,000
- Original Chandra's Capital: Rs. 28,000
- Total old capital: Rs. 32,000 + Rs. 28,000 = Rs. 60,000
Considering:
- Alia’s goodwill contribution: Rs. 20,000
- Increase in land and building value: Rs. 10,000
- Increase in workmen's compensation reserve: Rs. 10,000
- Unaccounted incomes: Rs. 200
- Old customer’s payment: Rs. 400
New Total Capital = 60,000 + 20,000 + 10,000 + 10,000 + 200 + 400 = Rs. 100,600
### Step 4: Determine New Profit Sharing Ratio and Capital Contributions
Alia will join with a 1/5 share:
Bhavesh: 3 parts
Chandra: 1 part
Alia: 1 part
The new total ratio is 3 (Bhavesh) + 1 (Chandra) + 1 (Alia) = 5
Calculate each partner's new capital based on the new profit-sharing ratio (3:1:1):
- Bhavesh’s new capital: [tex]\( \frac{3}{5} \times 100,600 = Rs. 60,360 \)[/tex]
- Chandra’s new capital: [tex]\( \frac{1}{5} \times 100,600 = Rs. 20,120 \)[/tex]
- Alia’s new capital: [tex]\( \frac{1}{5} \times 100,600 - 20,000 \ (goodwill) = Rs. 120 \)[/tex] (including her initial Rs. 20,000 contribution for goodwill)
### Step 5: Determine Capital Adjustments
Bhavesh:
Old capital: Rs. 32,000
New capital: Rs. 60,360
Bhavesh needs to bring in: Rs. 60,360 - Rs. 32,000 = Rs. 28,360
Chandra:
Old capital: Rs. 28,000
New capital: Rs. 20,120
Chandra will withdraw: Rs. 28,000 - Rs. 20,120 = Rs. 7,880
Alia:
Initial capital to bring: Rs. 20,000 (goodwill)
New capital required: Rs. 120
Alia gets back: Rs. 20,000 - Rs. 120 = Rs. 19,880
### Final Summary:
- Bhavesh needs to bring Rs. 28,360 cash.
- Chandra will withdraw Rs. 7,880 cash.
- Alia will withdraw Rs. 19,880 cash after adjusting her Rs. 20,000 contribution towards goodwill.
In conclusion, all necessary adjustments ensure the partners' capitals are aligned with the new profit-sharing ratio.
### Step 1: Calculate Total Liabilities and Total Assets as of March 31, 2018
Using the figures from the balance sheet:
Total Liabilities
- Creditors: Rs. 20,000
- Workmen's Compensation Reserve: Rs. 30,000
- General Reserve: Rs. 24,000
- Bhavesh’s Capital: Rs. 32,000
- Chandra’s Capital: Rs. 28,000
Total Liabilities: Rs. 20,000 + Rs. 30,000 + Rs. 24,000 + Rs. 32,000 + Rs. 28,000 = Rs. 134,000
Total Assets
- Bank: Rs. 20,000
- Debtors: Rs. 13,000 – Rs. 1,000 (Provision) = Rs. 12,000
- Bills Receivable: Rs. 10,000
- Stock: Rs. 20,000
- Land & Building: Rs. 30,000
- Goodwill: Rs. 42,000
Total Assets: Rs. 20,000 + Rs. 12,000 + Rs. 10,000 + Rs. 20,000 + Rs. 30,000 + Rs. 42,000 = Rs. 134,000
Match confirmed: Both total liabilities and total assets are Rs. 134,000.
### Step 2: Adjustments for Alia's Admission
Alia is coming in with a 1/5 share.
#### (1) Goodwill Contribution
Alia brings Rs. 20,000 as her share of goodwill.
#### (2) Payment from Old Customer
An old customer, Anju, pays off Rs. 400 in cash. This amount increases the bank balance.
#### (3) Revaluation of Land & Building
The market value of the land and building is now Rs. 40,000 instead of the previously recorded Rs. 30,000. This is a Rs. 10,000 increase.
#### (4) Increase in Workmen's Compensation Reserve
The workmen’s compensation reserve is increased by Rs. 10,000, bringing it to Rs. 40,000.
#### (5) Account for Unaccounted Accrued Income
Recognize an unaccounted accrued income of Rs. 200.
### Step 3: Calculate New Capital Requirements
Calculation of New Workmen’s Compensation Reserve:
Old reserve: Rs. 30,000
Increase: Rs. 10,000
New reserve: Rs. 40,000
Calculation for New Total Capital:
- Original Bhavesh's Capital: Rs. 32,000
- Original Chandra's Capital: Rs. 28,000
- Total old capital: Rs. 32,000 + Rs. 28,000 = Rs. 60,000
Considering:
- Alia’s goodwill contribution: Rs. 20,000
- Increase in land and building value: Rs. 10,000
- Increase in workmen's compensation reserve: Rs. 10,000
- Unaccounted incomes: Rs. 200
- Old customer’s payment: Rs. 400
New Total Capital = 60,000 + 20,000 + 10,000 + 10,000 + 200 + 400 = Rs. 100,600
### Step 4: Determine New Profit Sharing Ratio and Capital Contributions
Alia will join with a 1/5 share:
Bhavesh: 3 parts
Chandra: 1 part
Alia: 1 part
The new total ratio is 3 (Bhavesh) + 1 (Chandra) + 1 (Alia) = 5
Calculate each partner's new capital based on the new profit-sharing ratio (3:1:1):
- Bhavesh’s new capital: [tex]\( \frac{3}{5} \times 100,600 = Rs. 60,360 \)[/tex]
- Chandra’s new capital: [tex]\( \frac{1}{5} \times 100,600 = Rs. 20,120 \)[/tex]
- Alia’s new capital: [tex]\( \frac{1}{5} \times 100,600 - 20,000 \ (goodwill) = Rs. 120 \)[/tex] (including her initial Rs. 20,000 contribution for goodwill)
### Step 5: Determine Capital Adjustments
Bhavesh:
Old capital: Rs. 32,000
New capital: Rs. 60,360
Bhavesh needs to bring in: Rs. 60,360 - Rs. 32,000 = Rs. 28,360
Chandra:
Old capital: Rs. 28,000
New capital: Rs. 20,120
Chandra will withdraw: Rs. 28,000 - Rs. 20,120 = Rs. 7,880
Alia:
Initial capital to bring: Rs. 20,000 (goodwill)
New capital required: Rs. 120
Alia gets back: Rs. 20,000 - Rs. 120 = Rs. 19,880
### Final Summary:
- Bhavesh needs to bring Rs. 28,360 cash.
- Chandra will withdraw Rs. 7,880 cash.
- Alia will withdraw Rs. 19,880 cash after adjusting her Rs. 20,000 contribution towards goodwill.
In conclusion, all necessary adjustments ensure the partners' capitals are aligned with the new profit-sharing ratio.