question_answer

You are required to answer the following questions 60 to 65 :

Gagan and Megha are partners, sharing profits in the ratio of 2:1. To meet the requirement of capital they decided to admit a new partner Nishant for 1/3rd share in profit.

At the time of admission, the Balance Sheet stood as follows:

Liabilities Amount Assets Amount Capital A/cs: Freehold Property 2,40,000 Gagan 2,10,000 Plant and Machinery 1,60,000 Megha 3,90,000 6,00,000 Building 1,00,000 Investment Fluctuation Reserve 18,000 Furniture 80,000 Creditors 25,000 Debtors 55,000 Bills Payable 42,000 Less: Provision for 5,000 Outstanding Salaries 15,000 Doubtful debts 50,000 Current investment 45,000 Cash in hand 25,000 7,00,000 7,00,000

Nishant brings Rs.2,30,000 as his capital and Rs.70,000 for premium for goodwill. Following adjustments to be considered:

(i) Freehold property to be appreciated by Rs.30,000. Plant and Machinery reduced to 1,20,000. Building is appreciated to 130%. Insurance premium paid during the year included Rs.2,000 unexpired insurance.

(ii) A debtor whose account was written off as bad debts for Rs.8,400 before two years, now paid 50% amount in cash.

(iii) A creditor to whom 9,000 was payable, draw a bill of exchange for 3 months, which was duly accepted.

(iv) Megha took investment costing Rs.12,000 and remaining investment valued at Rs.38,000.

(v) A claim received and accepted by the firm for workmen, compensation Rs.75,000.

New Ratio among the partners:

A) 4:2:3

B) 2:1:1

C) 3:2:1

D) 5:3:2