Question

The following is the information extracted from M/s. Jamil LLC, which is run by partners A, B and C and sharing profits 3:2:1 as on 31.3.2020.

Name of Accounts OMR Name of Accounts OMR Cash 63,000 Bank Loan 56,000 Sundry Debtors 98,000 Bonds 70,000 Stock 35,000 Bills Payable 112,000 Machinery 56,000 Sundry Creditors 140,000 Land 98,000 Bank Overdraft 35,000 Furniture 35,000 General Reserve 70,000 Premises 56,000 Profit & Loss A/C 35,000 Building 140,000 A Capital Account 84,000 Plant 84,000 B Capital Account 56,000 Bill Receivable 35,000 C Capital Account 42,000

On 1.4.2020 they decided to admit D into the partnership for 1/5th of the future profits with the
terms that D shall bring in a capital of OMR 70,000 and on that day Goodwill of the firm is being
valued at OMR 56,000.

The various assets of the firm such as Machinery, Land, Buildings and Plant are to be appreciated
by 10% and Stock, Furniture, Premises are to be depreciated by 5%. Provision for Doubtful Debts to
be created against Sundry Debtors @ 5% and Discount received from Sundry Creditors @ 2.5%.
Further Provision for outstanding liability is to be created at OMR 5,600 and Bank Loan is to be
maintained in the reconstituted books of accounts.

Q5.
Journalize the above transactions with narrations and prepare the Revaluation Account. Give
your comment with reasons about the values which are debited and credited in the Revaluation
Account. (2+2+1 = 5 Marks)
Q6.
Prepare Partners’ Capital Accounts and Balance Sheet of the reconstituted partnership firm.
Give your views about the changes in the balance sheet after reconstitution.   

Answer 1