3. yes u can do that...no need to worry..no hard and fast rules for this....transfer the balances if current a/c to capital a/c 1st and then proceed...
4.i follow a simple trick....just write the names of ALL THE PARTNERS (old as well as new) in the 1st column...their old profit share in the 2nd column...the in 3rd column u write Gain/sacrifice...in the 4th column u write New share...Now feed the columns with all the information u have.....if a partneris retiring its new share will be 0...if there is admission then his old share will 0...sometimes u will be given gain/loss, sometimes new share....it depends on the language of the question......then make the calculations.....u will get an equation- > old + gain - loss= New share....Making columns will simpify your calculations...
6. Depends on the question-... in the case of dissolution, loan is paid off separately...no need to take it to capital account...adjust it with cash/bank account...and show a separate loan account...
in case of insolvency of the partner, adjust his loan with his capital a/c only...no need to pay him....
5.Take it in realisation a/c....
7.In case the firms owe each other a debt and they amalgamate, then ultimately in the new firm's balance sheet, this debt is cancelled with the whole amount.....entry will be..
Creditor's a/c ... Dr. 3000
To debtor's a/c 3000
But as per your question,
If before amalgamating they are settling the loans with each other at some lower or higher amounts, then it will go to their respective realisation accounts.....one will get a profit of 1000 and other a loss of 1000...
1. After all the adjustments are carried out , take out the balance of capital accounts of all partners and add them up to get the total capital of the firm..suppose A's balance is 40000 and B's balance is 60000 ...New P.s.R is 1:1
then we compute-----total capital is 100000..now distribue it in new ratio ... we get A's share 50000 and B's share 50000....
In the capital account,balance c/d will be 50000 for both.
....now adjust the difference in cash....A will have to bring 10000 in cash and B will be paid 10000...
Hope its clear....will answer the rest of the questions later...
And just chill...not at all a difficult chapter...just learn how to balance the accounts and its ABC....
Regards,
8 . For piecemeal Distribution the appropriate term for your Query would be ADJUSTED CAPITAL .
ADJUSTED CAPITAL = CAPITAL + RESERVES - DRAWINGS + OTHER ADJUSTMENTS
Proportionate Capital = Adjusted Capital / PSR
In case if there is no reserves , drawings , adjustments then ADJUSTED CAPITAL = ORIGINAL CAPITAL
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