Double Entry Book Keeping Ts Grewal Vol. I 2019 Solutions for Class 12 Commerce Accountancy Chapter 5 Admission Of A Partner are provided here with simple step-by-step explanations. These solutions for Admission Of A Partner are extremely popular among Class 12 Commerce students for Accountancy Admission Of A Partner Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the Double Entry Book Keeping Ts Grewal Vol. I 2019 Book of Class 12 Commerce Accountancy Chapter 5 are provided here for you for free. You will also love the ad-free experience on Meritnation’s Double Entry Book Keeping Ts Grewal Vol. I 2019 Solutions. All Double Entry Book Keeping Ts Grewal Vol. I 2019 Solutions for class Class 12 Commerce Accountancy are prepared by experts and are 100% accurate.
Page No 5.100:
Question 74:
A and B are partners in a firm sharing profits in the ratio of 3 : 2. They admit C as a partner on 1st April, 2019 on which date the Balance Sheet of the firm was:
| Liabilities | ₹ | Assets | ₹ | |
| Capital A/cs: | Building | 50,000 | ||
| A | 60,000 | Plant and Machinery | 30,000 | |
| B | 40,000 | 1,00,000 | Stock | 20,000 |
| Creditors | 20,000 | Debtors | 10,000 | |
| Bank | 10,000 | |||
| 1,20,000 | 1,20,000 | |||
You are required to prepare the Revaluation Account, Partners' Capital Accounts and Balance Sheet of the new firm after considering the following:
(a) C brings ₹ 30,000 as capital for 1/4th share. He also brings ₹ 10,000 for his share of goodwill.
(b) Part of the Stock which had been included at cost of ₹ 2,000 had been badly damaged in storage and could only expect to realise ₹ 400.
(c) Bank charges had been overlooked and amounted to ₹ 200 for the year 2018-19.
(d) Depreciation on Building of ₹ 3,000 had been omitted for the year 2018-19.
(e) A credit for goods for ₹ 800 had been omitted from both purchases and creditors although the goods had been correctly included in Stock.
(f) An expense of ₹ 1,200 for insurance premium was debited in the Profit and Loss Account of 2018-19 but ₹ 600 of this are related to the period after 31st March, 2019.
Answer:
|
Revaluation Account |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Stock (2,000 – 400) |
1,600 |
|
|
|
Bank (charges) |
200 |
Prepaid Insurance |
600 |
|
Building |
3,000 |
|
|
|
Creditors |
800 |
Loss transferred to |
|
|
|
|
A Capital |
3,000 |
|
|
|
B Capital |
2,000 |
|
|
5,600 |
|
5,600 |
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
|
|
|
|
|
Cr. |
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
Revaluation |
3,000 |
2,000 |
|
Balance b/d |
60,000 |
40,000 |
|
|
|
|
|
|
Bank |
|
|
30,000 |
|
|
|
|
|
Premium for Goodwill |
6,000 |
4,000 |
|
|
Balance c/d |
63,000 |
42,000 |
30,000 |
|
|
|
|
|
|
66,000 |
44,000 |
30,000 |
|
66,000 |
44,000 |
30,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2019 after C’s admission |
||||
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
|
|
Capital A/cs: |
|
Building (50,000 – 3,000) |
47,000 |
|
|
A |
63,000 |
|
Plant and Machinery |
30,000 |
|
B |
42,000 |
|
Stock (20,000 – 1,600) |
18,400 |
|
C |
30,000 |
1,35,000 |
Debtors |
10,000 |
|
Creditors (20,000 + 800) |
20,800 |
Bank |
49,800 |
|
|
|
|
Prepaid Insurance |
600 |
|
|
|
1,55,800 |
|
1,55,800 |
|
|
|
|
|
|
|
|
Bank Account |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Balance b/d |
10,000 |
Revaluation (Bank charges) |
200 |
|
C’s Capital |
30,000 |
|
|
|
Premium for Goodwill |
10,000 |
Balance c/d |
49,800 |
|
|
50,000 |
|
50,000 |
|
|
|
|
|
Working Notes:
WN1 Sacrificing Ratio
Old Ratio (A and B) 3 : 2
Sacrificing Ratio = 3 : 2
WN2 Distribution of Premium for Goodwill
Page No 5.100:
Question 75:
Divya, Yasmin and Fatima are partners in a firm, sharing profits and losses in 11 : 7 : 2 respectively. The Balance Sheet of the firm on 31st March, 2018 was as follows:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Sundry Creditors |
70,000 |
Factory Building | 7,35,000 | ||
| Public Deposits | 1,19,000 | Plant and Machinery | 1,80,000 | ||
| Reserve Fund | 90,000 | Furniture | 2,60,000 | ||
| Outstanding Expenses | 10,000 | Stock | 1,45,000 | ||
| Capital A/cs: |
|
Debtors |
1,50,000 |
|
|
| Divya | 5,10,000 |
|
Less: Provision |
(30,000) |
1,20,000 |
| Yasmin | 3,00,000 | Cash at Bank | 1,59,000 | ||
| Fatima |
5,00,000 |
13,10,000 |
|
||
|
15,99,000 |
15,99,000 |
||||
|
|
|
||||
On 1st April, 2018, Aditya is admitted as a partner for one-fifth share in the profits with a capital of ₹ 4,50,000 and necessary amount for his share of goodwill on the following terms:
(a) Furniture of ₹ 2,40,000 were to be taken over Divya, Yasmin and Fatima equally.
(b) A creditor of ₹ 7,000 not recorded in books to be taken into account.
(c) Goodwill of the firm is to be valued at 2.5 years' purchase of average profits of last two years. The profit of the last three years were:
2015-16 − ₹ 6,00,000; 2016-17 − ₹ 2,00,000; 2017-18 − ₹ 6,00,000.
(d) At time of Aditya's admission. Yasmin also brought in ₹ 50,000 as fresh capital.
(e) Plant and Machinery is re-valued to ₹ 2,00,000 and expenses outstanding were brought down to ₹ 9,000.
Prepare Revaluation Account, Partners Capital Account and the Balance Sheet of the reconstituted firm.
Answer:
|
In the books of Divya, Yasmin, Fatima and Aditya |
||||||
| Dr. |
Revaluation A/c |
Cr. | ||||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|||
| To Sundry Creditors A/c |
7,000 |
By Plant and Machinery A/c |
20,000 |
|||
| To Profit Transferred to: |
|
By Outstanding Expenses A/c |
1,000 |
|||
| Divya’s Capital A/c |
7,700 |
|
|
|||
| Yasmin’s Capital A/c |
4,900 |
|
|
|||
| Fatima’s Capital A/c |
1,400 |
14,000 |
|
|||
|
|
|
|||||
|
21,000 |
21,000 |
|||||
|
|
|
|||||
| Dr. |
Partner’s Capital A/c |
Cr. |
|||||||||
|
Particulars |
Divya (₹) |
Yasmin (₹) |
Fatima (₹) |
Aditya (₹) |
Particulars |
Divya (₹) |
Yasmin (₹) |
Fatima (₹) |
Aditya (₹) |
||
| To Furniture A/c |
80,000 |
80,000 |
80,000 |
|
By balance b/d |
5,10,000 |
3,00,000 |
5,00,000 |
|
||
|
|
|
|
|
By Bank A/c |
|
50,000 |
|
4,50,000 |
|||
| To balance c/d |
5,97,200 |
3,76,400 |
4,50,400 |
4,50,000 |
By Premium |
1,10,000 |
70,000 |
20,000 |
|
||
|
|
|
|
|
for Goodwill A/c |
|
|
|
|
|||
|
|
|
|
|
By Reserve Fund A/c |
49,500 |
31,500 |
9,000 |
|
|||
|
|
|
|
|
By Revaluation A/c |
7,700 |
4,900 |
1,400 |
|
|||
|
|
|
|
|
|
|
|
|
||||
|
6,77,200 |
4,56,400 |
5,30,400 |
4,50,000 |
6,77,200 |
4,56,400 |
5,30,400 |
4,50,000 |
||||
|
|
|
|
|
|
|
|
|
||||
Working Notes:
Calculation of Goodwill brought in by Aditya
| Average Profits | = | (Normal profits from 31st March, 2017 to 31st March, 2018)/2 |
| = | ₹ (2,00,000 + 6,00,000)/2= ₹ 4,00,000 | |
| Goodwill | = | Average Profits × No. of years of Purchase |
| = | ₹ (4,00,000 × 2.5) = ₹ 10,00,000 | |
| Goodwill brought in by Aditya | = | ₹ (10,00,000 × 1/5) = ₹ 2,00,000 |
|
Balance Sheet |
|||||
|
as at 31st March, 2019 |
|||||
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Capitals: |
|
Factory Building |
7,35,000 |
||
| Divya |
5,97,200 |
|
Plant and Machinery |
2,00,000 |
|
| Yasmin |
3,76,400 |
|
Furniture |
20,000 |
|
| Fatima |
4,50,400 |
|
Stock |
1,45,000 |
|
| Aditya |
4,50,000 |
18,74,000 |
Debtors |
1,50,000 |
|
| Sundry Creditors |
77,000 |
Less: Provision | (30,000) |
1,20,000 |
|
| Public Deposits |
1,19,000 |
Cash at Bank |
8,59,000 |
||
| Outstanding Expenses |
9,000 |
(1,59,000 + 2,00,000 + 50,000 + 4,50,000) |
|
||
|
|
|
||||
|
20,79,000 |
20,79,000 |
||||
|
|
|
||||
Page No 5.101:
Question 76:
A and B are partners in a firm. The net profit of the firm is divided as follows: 1/2 to A, 1/3 to B and 1/6 carried to a Reserve. They admit C as a partner on 1st April, 2019 on which date, the Balance Sheet of the firm was:
| Liabilities | ₹ | Assets | ₹ | |
| Capital A/cs: | Building | 50,000 | ||
| A | 50,000 | Plant and Machinery | 30,000 | |
| B | 40,000 | 90,000 | Stock | 18,000 |
| Reserve | 10,000 | Debtors | 22,000 | |
| Creditors | 20,000 | Bank | 5,000 | |
| Outstanding Expenses | 5,000 | |||
| 1,25,000 | 1,25,000 | |||
Following are the required adjustments on admission of C:
(a) C brings in ₹ 25,000 towards his capital.
(b) C also brings in ₹ 5,000 for 1/5th share of goodwill.
(c) Stock is undervalued by 10%.
(d) Creditors include a liability of ₹ 4,000, which has been decided by the court at ₹ 3,200.
(e) In regard to the Debtors, the following Debts proved Bad or Doubtful−
₹ 2,000 due from X−bad to the full extent;
₹ 4,000 due from Y−insolvent, estate expected to pay only 50%.
You are required to prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the new firm.
Answer:
|
Revaluation Account |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Bad Debts |
2,000 |
Stock |
2,000 |
|
Provision for Doubtful Debts |
2,000 |
Creditors (4,000 – 3,200) |
800 |
|
(4,000 × 50%) |
|
|
|
|
|
|
Loss transferred to |
|
|
|
|
A Capital |
720 |
|
|
|
B Capital |
480 |
|
|
4,000 |
|
4,000 |
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
|
|
|
|
|
Cr. |
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
Revaluation |
720 |
480 |
|
Balance b/d |
50,000 |
40,000 |
|
|
|
|
|
|
Reserve |
6,000 |
4,000 |
|
|
|
|
|
|
Bank |
|
|
25,000 |
|
Balance c/d |
58,280 |
45,520 |
25,000 |
Premium for Goodwill |
3,000 |
2,000 |
|
|
|
59,000 |
46,000 |
25,000 |
|
59,000 |
46,000 |
25,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2019 after C’s admission |
|||||
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Capital A/cs: |
|
Building |
50,000 |
||
|
A |
58,280 |
|
Plan and Machinery |
30,000 |
|
|
B |
45,520 |
|
Stock (18,000 × 100/90) |
20,000 |
|
|
C |
25,000 |
1,28,800 |
Debtors |
22,000 |
|
|
Creditors (20,000 – 800) |
19,200 |
Less: Bad Debts |
2,000 |
|
|
|
Outstanding Expenses |
5,000 |
Less: Prov. for D. Debts |
2,000 |
18,000 |
|
|
|
|
Bank (5,000 + 30,000) |
35,000 |
||
|
|
1,53,000 |
|
1,53,000 |
||
|
|
|
|
|
||
Working Notes
WN1
WN2
Distribution of Reserve
WN3
Distribution of Premium for Goodwill
Page No 5.101:
Question 77:
Following is the Balance Sheet of the firm, Ashirvad, owned by A, B and C who share profits and losses of the business in the ratio of 3 : 2 : 1.
| BALANCE SHEET as at 31st March, 2019 | ||||
| Liabilities | ₹ | Assets | ₹ | |
| Capital A/cs: | Furniture | 95,000 | ||
| A | 1,20,000 | Business Premises | 2,05,000 | |
| B | 1,20,000 | Stock-in-Trade | 40,000 | |
| C | 1,20,000 | 3,60,000 | Debtors | 28,000 |
| Sundry Creditors | 20,000 | Cash at Bank | 15,000 | |
| Outstanding Salaries and wages | 7,200 | Cash in Hand | 4,200 | |
| 3,87,200 | 3,87,200 | |||
On 1st April, 2019, they admit D as a partner on the following conditions:
(a) D will bring in ₹ 1,20,000 as his capital and also ₹ 30,000 as goodwill premium for a quarter of the share in the future profits/losses of the firm.
(b) Values of the fixed assets of the firm will be increased by 10% before the admission of D.
(c) Mohan, an old customer whose account was written off as bad debts, has promised to pay ₹ 3,000 in full settlement of his dues.
(d) Future profits and losses of the firm will be shared equally by all the partners.
Pass the necessary Journal entries and prepare Revaluation Account, Partners' Capital Accounts and opening Balance Sheet of the new firm.
Answer:
|
Revaluation Account |
||||
|
Dr. |
|
|
Cr. |
|
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
|
|
|
Fixed Assets: |
|
|
|
|
|
Furniture |
95,000 × 10% |
9,500 |
|
Profit transferred to |
|
Business Premises |
2,05,000 × 10% |
20,500 |
|
A Capital |
15,000 |
|
|
|
|
B Capital |
10,000 |
|
|
|
|
C Capital |
5,000 |
|
|
|
|
|
|
|
|
|
|
|
30,000 |
|
30,000 |
|
|
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||||
|
Dr. |
|
|
|
|
|
|
|
|
Cr. |
|
Particulars |
A |
B |
C |
D |
Particulars |
A |
B |
C |
D |
|
A’s Capital (Goodwill) |
|
|
7,500 |
|
Balance b/d |
1,20,000 |
1,20,000 |
1,20,000 |
|
|
B’s Capital (Goodwill) |
|
|
2,500 |
|
Revaluation (Profit) |
15,000 |
10,000 |
5,000 |
|
|
|
|
|
|
|
Cash |
|
|
|
1,20,000 |
|
Balance c/d |
1,65,000 |
1,40,000 |
1,15,000 |
1,20,000 |
Premium for Goodwill |
22,500 |
7,500 |
|
|
|
|
|
|
|
|
C’s Capital (Goodwill) |
7,500 |
2,500 |
|
|
|
|
1,65,000 |
1,40,000 |
1,25,000 |
1,20,000 |
|
1,65,000 |
1,40,000 |
1,25,000 |
1,20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 1, 2019, after D’s admission |
||||
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
|
|
Capital A/cs: |
|
Furniture (95,000 + 9,500) |
1,04,500 |
|
|
A |
1,65,000 |
|
Business Premises (2,05,000+20,500) |
2,25,500 |
|
B |
1,40,000 |
|
Stock-in-Trade |
40,000 |
|
C |
1,15,000 |
|
Debtors |
28,000 |
|
D |
1,20,000 |
5,40,000 |
Cash at Bank |
15,000 |
|
Sundry Creditors |
20,000 |
Cash in hand (4,200 + 1,50,000) |
1,54,200 |
|
|
Outstanding salaries and wages |
7,200 |
|
|
|
|
|
5,67,200 |
|
5,67,200 |
|
|
|
|
|
|
|
Working Note:
WN1 Calculation of Sacrificing Ratio
Sacrificing Ratio = Old Ratio − New Ratio
WN2 Calculation of C’s gain in goodwill
WN3 Amount of Goodwill to be distributed between A and B (Sacrificing Partners)
WN4 Journal Entries for D’s Capital and distribution of goodwill
|
Particulars |
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
|
Cash A/c |
Dr. |
|
1,50,000 |
|
|
To D’s Capital A/c |
|
|
1,20,000 |
|
|
To Premium for Goodwill A/c |
|
|
30,000 |
|
|
(D brought Capital and share of Capital) |
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill |
Dr. |
|
30,000 |
|
|
C’s Capital A/c |
Dr. |
|
10,000 |
|
|
To A’s Capital A/c |
|
|
30,000 |
|
|
To B’s Capital |
|
|
10,000 |
|
|
(Gain goodwill distributed between A and B |
|
|
|
|
|
|
|
|
|
|
Page No 5.102:
Question 78:
A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. Following is their Balance Sheet as at 31st March, 2019:
| Liabilities | ₹ | Assets | ₹ | |
| Capital A/cs: | Building | 35,000 | ||
| A | 50,000 | Machinery | 25,000 | |
| B | 30,000 | 80,000 | Stock | 15,000 |
| Creditors | 20,000 | Debtors | 15,000 | |
| Investments | 5,000 | |||
| Bank | 5,000 | |||
| 1,00,000 | 1,00,000 | |||
C is admitted as a partner on 1st April, 2019 on the following terms:
(a) C is to pay ₹ 20,000 as capital for 1/4th share. He also pays ₹ 5,000 as premium for goodwill.
(b) Debtors amounted to ₹ 3,000 is to be written off as bad and a Provision of 10% is created against Doubtful Debts on the remaining amount.
(c) No entry has been passed in respect of a debt of ₹ 300 recovered by A from a customer, which was previously written off as bad in previous year. The amount is to be paid by A.
(d) Investments are taken over by B at their market value of ₹ 4,900 against cash payment.
You are required to prepare Revaluation Account, Partner's Capital Accounts and new Balance Sheet.
Answer:
|
Revaluation Account |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Bad Debts |
3,000 |
A's Capital A/c |
300 |
|
Provision for Doubtful Debts |
1,200 |
Loss transferred to |
|
|
Investment (5,000 – 4,900) |
100 |
A Capital |
2,400 |
|
|
|
B Capital |
1,600 |
|
|
4,300 |
|
4,300 |
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
|
|
|
|
|
Cr. |
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
Revaluation |
2,400 |
1,600 |
|
Balance b/d |
50,000 |
30,000 |
|
|
Revaluation |
300 |
|
|
Bank |
|
|
20,000 |
|
|
|
|
|
Premium for Goodwill |
3,000 |
2,000 |
|
|
Balance c/d |
50,300 |
30,400 |
20,000 |
|
|
|
|
|
|
53,000 |
32,000 |
20,000 |
|
53,000 |
32,000 |
20,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2019 after C’s admission |
|||||
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Capital A/cs: |
|
Buildings |
35,000 |
||
|
A |
50,300 |
|
Machinery |
25,000 |
|
|
B |
30,400 |
|
Stock |
15,000 |
|
|
C |
20,000 |
1,00,700 |
Debtors |
15,000 |
|
|
Creditors |
20,000 |
Less: Bad Debts |
3,000 |
|
|
|
|
|
|
12,000 |
|
|
|
|
|
Less: 10% Provision for Doubtful Debts |
1,200 |
10,800 |
|
|
|
|
Bank |
34,900 |
||
|
|
1,20,700 |
|
1,20,700 |
||
|
|
|
|
|
||
|
Bank Account |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Balance b/d |
5,000 |
|
|
|
C’s Capital |
20,000 |
|
|
|
Premium for Goodwill |
5,000 |
|
|
|
Investments |
4,900 |
Balance c/d |
34,900 |
|
|
|
||
|
|
34,900 |
|
34,900 |
|
|
|
|
|
Working Notes:
WN1
WN2
Distribution of Premium for Goodwill
WN3
Sale of Investments
|
Bank A/c |
Dr. |
4,900 |
|
|
Revaluation A/c |
Dr. |
100 |
|
|
To Investment |
|
5,000 |
|
WN4
|
A's Capital A/c |
Dr. |
300 |
|
|
To Revaluation A/c |
|
|
300 |
Page No 5.102:
Question 79:
X and Y are partners sharing profits and losses in the ratio of 3/4 and 1/4. Their Balance Sheet as at 31st March, 2019 is:
| Liabilities | ₹ | Assets | ₹ | |
| Capital A/cs: | Land and Building | 1,25,000 | ||
| X | 1,50,000 | Furniture | 5,000 | |
| Y | 80,000 | 2,30,000 | Stock | 1,00,000 |
| Workmen Compensation Reserve | 20,000 | Sundry Debtors | 80,000 | |
| Sundry Creditors | 1,50,000 | Bills Receivable | 15,000 | |
| Bills Payable | 37,500 | Cash at Bank | 1,00,000 | |
| Cash in Hand | 12,500 | |||
| 4,37,500 | 4,37,500 | |||
They admit Z into partnership on 1st April, 2019 on the following terms:
(a) Goodwill is to be valued at ₹ 1,00,000.
(b) Stock and Furniture to be reduced by 10%.
(c) A Provision for Doubtful Debts is to be created @ 5% on Sundry Debtors.
(d) The value of Land and Building is to be appreciated by 20%.
(e) Z pays ₹ 50,000 as his capital for 1/5th share in the future profits.
You are required to show Revaluation Account, Partners' Capital Accounts and Balance Sheet of the new firm.
Answer:
|
Revaluation Account |
|||
|
Dr. |
|
Cr. |
|
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Stock |
10,000 |
Land and Building |
25,000 |
|
Furniture |
500 |
(1,25,000 × 20%) |
|
|
Provision for D. Debts |
4,000 |
|
|
|
Profit transferred to |
|
|
|
|
X Capital |
7,875 |
|
|
|
Y Capital |
2,625 |
|
|
|
|
25,000 |
|
25,000 |
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
|
|
|
|
|
Cr. |
|
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
|
X’s Capital |
|
|
15,000 |
Balance b/d |
1,50,000 |
80,000 |
|
|
Y’s Capital |
|
|
5,000 |
Workmen’s Compensation Fund |
15,000 |
5,000 |
|
|
|
|
|
|
Revaluation (Profit) |
7,875 |
2,625 |
|
|
Balance c/d |
1,87,875 |
92,625 |
30,000 |
Cash |
|
|
50,000 |
|
|
|
|
|
Z’s Capital |
15,000 |
5,000 |
|
|
|
1,87,875 |
92,625 |
50,000 |
|
1,87,875 |
92,625 |
50,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2019 after Z’s admission |
|||||
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Capital A/cs: |
|
Land and Building (1,25,000 + 25,000) |
1,50,000 |
||
|
X |
1,87,875 |
|
|
|
|
|
Y |
92,625 |
|
Office Furniture (5,000 – 500) |
4,500 |
|
|
Z |
30,000 |
3,10,500 |
Stock (1,00,000 – 10,000) |
90,000 |
|
|
Sundry Creditors |
1,50,000 |
Sundry Debtors |
80,000 |
|
|
|
Bills Payable |
37,500 |
Less: 5% Provision for D. Debts |
4,000 |
76,000 |
|
|
|
|
Cash at Bank |
1,00,000 |
||
|
|
|
Cash in Hand (12,500 + 50,000) |
62,500 |
||
|
|
|
Bills Receivable |
15,000 |
||
|
|
4,98,000 |
|
4,98,000 |
||
|
|
|
|
|
||
Working Notes:
WN1: Sacrificing Ratio
WN2: Calculation of Partners' Share of Goodwill
Goodwill of the firm = 1, 00,000
|
|
Journal |
||||
|
Date |
Particulars |
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
|
|
Z’s Capital A/c |
Dr. |
|
20,000 |
|
|
|
To X’s Capital A/c |
|
|
15,000 |
|
|
|
To Y’s Capital A/c |
|
|
5,000 |
|
|
|
(Z’s share of goodwill changed from his |
|
|
|
|
|
|
|
|
|
|
|
|
|
Workmen’s Compensation Fund A/c |
|
20,000 |
|
|
|
|
To X’s Capital A/c |
|
|
15,000 |
|
|
|
To Y’s Capital |
|
|
5,000 |
|
|
|
(Workmen’s Compensation Fund distributed) |
|
|
|
|
|
|
|
|
|
|
|
Page No 5.103:
Question 80:
Deepika and Rajshree are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2019 their Balance Sheet was:
| Liabilities | ₹ | Assets | ₹ | |||
| Sundry Creditors | 16,000 | Cash in Hand | 1,200 | |||
| Public Deposits | 61,000 | Cash at Bank | 2,800 | |||
| Bank Overdraft | 6,000 | Stock | 32,000 | |||
| Outstanding Liabilities | 2,000 | Prepaid Insurance | 1,000 | |||
| Capital A/cs: | Sundry Debtors | 28,000 | ||||
| Deepika | 48,000 | Less: Provision for Doubtful Debts | 800 | |||
| Rajshree | 40,000 | 88,000 | Plant and Machinery | 48,000 | ||
| Land and Building | 50,000 | |||||
| Furniture | 10,000 | |||||
| 1,73,000 | 1,73,000 | |||||
On 1st April, 2019 the partners admit Anshu as a partner on the following terms:
(a) The new profit-sharing ratio of Deepika, Rajshree and Anshu will be 5 : 3 : 2 respectively.
(b) Anshu shall bring in ₹ 32,000 as his capital.
(c) Anshu is unable to bring in any cash for his share of goodwill. Partners, therefore, decide to calculate the goodwill on the basis of Anshu's share in the profits and the capital contribution made by her to the firm.
(d) Plant and Machinery is to be valued at ₹ 60,000, Stock at ₹ 40,000 and the Provision for Doubtful Debts is to be maintained at ₹ 4,000. Value of Land and Building has appreciated by 20%. Furniture has been depreciated by 10%.
(e) There is an additional liability of ₹ 8,000 being outstanding salary payable to employees of the firm. This liability is not included in the outstanding liabilities, stated in the above Balance Sheet. Partners decide to show this liability in the books of account of the reconstituted firm.
Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of Deepika, Rajshree and Anshu.
Answer:
|
Revaluation Account |
||||
|
Dr. |
|
Cr. |
||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
|
Reserve for D. Debts |
4,000 |
|
Plant and Machinery |
12,000 |
|
Less: Old Reserve |
800 |
3,200 |
(60,000 – 48,000) |
|
|
|
|
|
|
|
| Furniture 10,000 × 10% | 1,000 | Stock (40,000 – 32,000) | 8,000 | |
|
Outstanding salary |
8,000 |
|
|
|
|
Profit transferred to |
|
Land and Building |
10,000 |
|
|
Deepika Capital |
10,680 |
(50,000 × 20%) |
|
|
|
Rajshree Capital |
7,120 |
|
|
|
|
|
30,000 |
|
30,000 |
|
|
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
Deepika |
Rajshree |
Anshu |
Particulars |
Deepika |
Rajshree |
Anshu |
|
Balance c/d |
58,680 |
47,120 |
32,000 |
Balance b/d |
48,000 |
40,000 |
|
|
(before adjustment of Goodwill) |
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation |
10,680 |
7,120 |
|
|
|
|
|
|
Cash |
|
|
32,000 |
|
|
58,680 |
47,120 |
32,000 |
|
58,680 |
47,120 |
32,000 |
|
|
|
|
|
|
|
|
|
|
Deepika |
|
|
2,220 |
Balance b/d |
58,680 |
47,120 |
32,000 |
|
Rajshree |
|
|
2,220 |
Anshu’s Capital (Goodwill) |
2,220 |
2,220 |
|
|
Balance c/d |
60,900 |
49,340 |
27,560 |
|
|
|
|
|
|
60,900 |
49,340 |
32,000 |
|
60,900 |
49,340 |
32,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on March 31, 2019 after Anshu’s admission |
|||||
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Outstanding Salaries |
8,000 |
Cash in Hand |
1,200 |
||
|
Sundry Creditors |
16,000 |
Cash at Bank |
28,800 |
||
|
Public Deposits |
61,000 |
Stock |
40,000 |
||
|
Outstanding Liabilities |
2,000 |
Prepaid Insurance |
1,000 |
||
|
Capital A/cs: |
|
Sundry Debtors |
28,800 |
|
|
|
Deepika |
60,900 |
|
Less: reserve for D. Debts |
4,000 |
24,800 |
|
Rajshree |
49,340 |
|
Plant and Machinery |
60,000 |
|
|
Anshu |
27,560 |
1,37,800 |
Land and Building |
60,000 |
|
|
|
|
Furniture |
9,000 |
||
|
|
2,24,800 |
|
2,24,800 |
||
|
|
|
|
|
||
Working Notes
WN1: Calculation of Sacrificing Ratio
Sacrificing Ratio = Old Ratio − New Ratio
WN2: Valuation of Goodwill
Capitalised value on the basis of Anshu’s share
Actual Capital of all partners before adjustment of Goodwill = 58,680 + 47,120 + 32,000
= Rs 1,37,800
Goodwill = Capitalised value − Actual Capital of all partners before adjustment of Goodwill
= 1,60,000 − 1,37,800
= Rs 22,200
Anshu’s share of Goodwill
Deepika and Rajshree each will entitle for Goodwill
Page No 5.104:
Question 81:
Atul and Amit are partners sharing profits in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2019 is as follows:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Capital A/cs: |
|
Plant and Machinery | 1,80,000 | ||
| Atul |
1,00,000 |
|
Furniture | 30,000 | |
| Amit |
1,00,000 |
2,00,000 |
Computer |
10,000 |
|
| Current A/cs: |
|
|
Stock | 40,000 | |
| Atul | 70,000 | Debtors | 50,000 | ||
| Amit |
50,000 |
1,20,000 |
Bills Receivable |
10,000 |
|
| Creditors | 40,000 | Cash | 10,000 | ||
| Bills Payable | 10,000 | Bank | 40,000 | ||
|
3,70,000 |
3,70,000 |
||||
|
|
|
||||
Abhay is admitted as a partner for 1/4th share on 1st April, 2019 on the following terms:
(a) Abhay is to bring ₹ 65,000 as capital after adjusting amount due to him included in creditors and his share of Goodwill.
(b) ₹ 10,000 included in creditors is payable to Abhay which is to be transferred to his Capital Account.
(c) Furniture is to reduced by ₹ 3,000 and Plant and Machinery is to be increased to ₹ 1,98,000.
(d) Stock is overvalued by ₹ 4,000.
(e) A Provision for Doubtful Debts is to be created @ 5%.
(f) Goodwill is to be valued at 2 years' purchase of average profit for four years. Profits of four years ended 31st March were as follows: 2018-19 − ₹ 25,000, 2017-18 − ₹ 10,000, 2016-17 − ₹ 2,500, and 2015-16 − ₹ 2,500.
Pass the Journal entries for the above arrangement.
Answer:
|
In the books of the Atul, Amit and Abhay Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit (₹) |
Credit (₹) |
|
2019 |
|
|
|
|
|
|
April 01 |
Creditors A/c |
Dr. |
|
10,000 |
|
|
|
To Abhay’s Capital A/c |
|
|
|
10,000 |
|
|
(Being amount due to Abhay transferred to his Capital A/c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash A/c |
Dr. |
|
60,000 |
|
|
|
To Abhay’s Capital A/c |
|
|
|
55,000 |
|
|
To Premium for Goodwill A/c (WN1) |
|
|
|
5,000 |
|
|
(Being Capital and goodwill paid by the new partner) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
5,000 |
|
|
|
To Atul’s Capital A/c |
|
|
|
3,000 |
|
|
To Amit’s Capital A/c |
|
|
|
2,000 |
|
|
(Being premium for goodwill adjusted in 3:2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
9,500 |
|
|
|
To Furniture A/c |
|
|
|
3,000 |
|
|
To Stock A/c |
|
|
|
4,000 |
|
|
To Provision for Doubtful Debts A/c |
|
|
|
2,500 |
|
|
(Being assets revalued and liabilities reassessed) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant & Machinery A/c |
Dr. |
|
18,000 |
|
|
|
To Revaluation A/c |
|
|
|
18,000 |
|
|
(Being appreciation in plant & machinery provided for) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c (WN2) |
Dr. |
|
8,500 |
|
|
|
To Atul’s Capital A/c |
|
|
|
5,100 |
|
|
To Amit’s Capital A/c |
|
|
|
3,400 |
| (Being revaluation profit transferred to partner’s capital A/c) |
|
|
|
|
|
|
|
|
|
|
||
Working Notes:
1. Calculation of Goodwill brought in by Abhay:
| Average Profits | = | (Normal profits from 31st March, 2016 to 31st March, 2019)/2 |
| = | ₹ (25,000 + 10,000 + 2,500 + 2,500)/4= ₹ 10,000 | |
| Goodwill | = | Average Profits × No. of years of Purchase |
| = | ₹(10,000 × 2) = ₹ 20,000 | |
| Goodwill brought in by Abhay | = | ₹(20,000 × 1/4) = ₹ 5,000 |
2. Calculation of Revaluation Profit/Loss:
Debit side total = ₹ (3,000 + 4,000 + 2,500) = ₹ 9,500 Credit side total= ₹ 18,000 Gain on Revaluation = ₹ (18,000 – 9,500) = ₹ 8,500
Page No 5.104:
Question 82:
Yogesh and Naresh are partners sharing profits in the ratio of 3 : 2. They admit Ramesh for 1/3rd share on 1st April, 2019 and also decide to share future profits equally. Balance Sheet of the firm as at 31st March, 2019 was as follows:
| Liabilities | Amount (₹) | Assets | Amount (₹) | ||
| Capital A/cs: | Land | 4,00,000 | |||
| Yogesh | 5,00,000 | Building | 4,00,000 | ||
| Naresh | 5,00,000 | 10,00,000 | Furniture | 50,000 | |
| Current A/cs: | Computers | 1,00,000 | |||
| Yogesh | 1,10,000 | Stock | 1,50,000 | ||
| Naresh | 90,000 | 2,00,000 | Sundry Debtors | 2,10,000 | |
| Employees' Provident Fund | 25,000 | Less: Provision for Doubtful Debts | 10,000 | 2,00,000 | |
| Workmen Compensation Reserve | 1,00,000 | Cash | 10,000 | ||
| Sundry Creditors | 75,000 | Bank | 70,000 | ||
| Expenses Payable | 10,000 | Advertisement Suspense | 30,000 | ||
| 14,10,000 | 14,10,000 | ||||
They admitted Ramesh on the following terms:
(a) He will bring ₹ 5,00,000 as his capital.
(b) His share of goodwill is valued at ₹ 1,00,000 but he is unable to bring cash for his share of goodwill. It is agreed to debit the amount to his Current Account.
(c) Value of Land and Building is to be appreciated by ₹ 40,000 each.
(d) Value of Furniture to be reduced to ₹ 40,000.
(e) Provision for Doubtful Debts to be increased to 10%.
(f) A liability for damages of ₹ 10,000 is to be created.
Pass the Journal entries on admission of Ramesh and prepare Revaluation Account.
Answer:
|
In the books of the Yogesh, Naresh and Ramesh Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit (₹) |
Credit (₹) |
|
2019 |
|
|
|
|
|
|
April 01 |
Cash A/c |
Dr. |
|
5,00,000 |
|
|
|
To Ramesh’s Capital A/c |
|
|
|
5,00,000 |
|
|
(Being Capital brought in by the new partner) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ramesh’s Current A/c |
Dr. |
|
1,00,000 |
|
|
|
To Yogesh’s Current A/c (1,00,000 × 4/5) |
|
|
|
80,000 |
|
|
To Naresh’s Current A/c (1,00,000 × 1/5) |
|
|
|
20,000 |
|
|
(Being premium for goodwill adjusted in 4 : 1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
31,000 |
|
|
|
To Provision for Doubtful Debts A/c |
|
|
|
11,000 |
|
|
To Liability for damages A/c |
|
|
|
10,000 |
|
|
To Furniture A/c |
|
|
|
10,000 |
|
|
(Being assets revalued and liabilities reassessed) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Land A/c |
Dr. |
|
40,000 |
|
|
|
Building A/c |
Dr. |
|
40,000 |
|
|
|
To Revaluation A/c |
|
|
|
80,000 |
|
|
(Being appreciation in land and building provided for) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c (WN2) |
Dr. |
|
49,000 |
|
|
|
To Yogesh’s Current A/c |
|
|
|
29,400 |
|
|
To Naresh’s Current A/c |
|
|
|
19,600 |
|
|
(Being revaluation profit transferred to partner’s current A/c) |
|
|
|
|
|
|
Workmen Compensation Reserve A/c |
Dr. |
|
1,00,000 |
|
|
|
To Yogesh’s Current A/c |
|
|
|
60,000 |
|
|
To Naresh’s Current A/c |
|
|
|
40,000 |
|
|
(Being workmen compensation reserve distributed) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Yogesh’s Current A/c |
Dr. |
|
18,000 |
|
|
|
Naresh’s Current A/c |
Dr. |
|
12,000 |
|
|
|
To Advertisement Suspense A/c |
|
|
|
30,000 |
|
|
(Being accumulated loss written off) |
|
|
|
|
Working Notes:
1. Calculation of new profit-sharing ratio:
|
Particulars |
Yogesh |
Gopal |
|
Old Ratio |
3/5 |
2/5 |
|
New Ratio |
1/3 |
1/3 |
|
Gain/Sacrifice |
(3/5 – 1/3)= 4/15 (Sacrifice) |
(2/5 – 1/3)= 1/15 (Sacrifice) |
|
Sacrificing Ratio |
4:1 |
|
2. Calculation of Revaluation Profit/Loss:
Debit side total= ₹ (11,000 + 10,000 + 10,000) = ₹ 31,000
Credit side total = ₹ 80,000
Gain on Revaluation= ₹ (80,000 – 31,000) = ₹ 49,000
| Dr. |
Revaluation A/c |
Cr. | ||||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|||
| To Provision for Doubtful debt A/c |
11,000 |
By Land A/c |
40,000 |
|||
| To Liability for Damages A/c |
10,000 |
By Building A/c |
40,000 |
|||
| To Furniture A/c |
10,000 |
|
||||
| To Profit transferred to: |
|
|
||||
| Yogesh’s Current A/c |
29,400 |
|
|
|||
| Naresh’s Current A/c |
19,600 |
49,000 |
|
|||
|
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80,000 |
80,000 |
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Page No 5.105:
Question 83:
Balance Sheet of Ram and Shyam who shares profits in the ratio of their capitals as at 31st March, 2019 is:
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Capital A/cs: | Freehold Premises | 20,000 | ||
| Ram | 30,000 | Plant and Machinery | 13,500 | |
| Shyam | 25,000 | 55,000 | Fixtures and Fittings | 1,750 |
| Current A/cs: | Vehicles | 1,350 | ||
| Ram | 2,000 | Stock | 14,100 | |
| Shyam | 1,800 | 3,800 | Bills Receivable | 13,060 |
| Creditors | 19,000 | Debtors | 27,500 | |
| Bills Payable | 16,000 | Bank | 1,590 | |
| Cash | 950 | |||
| 93,800 | 93,800 | |||
On 1st April, 2019, they admitted Arjun into partnership on the following terms:
(a) Arjun to bring ₹ 20,000 as capital and ₹ 6,600 for goodwill, which is to be left in the business and he is to receive 1/4th share of the profits.
(b) Provision for Doubtful Debts is to be 2% on Debtors.
(c) Value of Stock to be written down by 5% .
(d) Freehold Premises are to be taken at a value of ₹ 22,400; Plant and Machinery ₹ 11,800; Fixtures and Fittings ₹ 1,540 and Vehicles ₹ 800.
You are required to make necessary adjustments entries in the firm, give Balance Sheet of the new firm as at 1st April, 2019 and also determine the ratio in which the partners will share profits, there being no change in the ratio of Ram and Shyam.
Answer:
|
Revaluation Account |
|||
|
Dr. |
|
Cr. |
|
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Reserve for D. Debts (27,500 × 2%) |
550 |
Free hold Premises (22,400 – 20,000) |
2,400 |
|
Stock |
705 |
Loss transferred to |
|
|
Plant and Machinery (13,500 – 11,800) |
1,700 |
Ram’s Current A/c |
717 |
|
Fixture and Fittings |
210 |
Shyam’s Current A/c |
598 |
|
Vehicles |
550 |
|
|
|
|
3,715 |
|
3,715 |
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
Ram |
Shyam |
Arjun |
Particulars |
Ram |
Shyam |
Arjun |
|
|
|
|
|
Balance b/d |
30,000 |
25,000 |
|
|
Balance c/d |
30,000 |
25,000 |
20,000 |
Cash |
|
|
20,000 |
|
|
30,000 |
25,000 |
20,000 |
|
30,000 |
25,000 |
20,000 |
|
|
|
|
|
|
|
|
|
|
Partners’ Current Accounts |
|||||||||
|
Dr. |
|
Cr. |
|||||||
|
Particulars |
Ram |
Shyam |
Arjun |
Particulars |
Ram |
Shyam |
Arjun |
||
|
Revaluation |
717 |
598 |
|
Balance b/d |
2,000 |
1,800 |
|
||
|
|
|
|
|
Premium for Goodwill |
3,600 |
3,000 |
|
||
|
Balance c/d |
4,883 |
4,202 |
|
|
|
|
|
||
|
|
5,600 |
4,800 |
|
|
5,600 |
4,800 |
|
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|
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|
Balance Sheet |
|||||
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Creditors |
19,000 |
Freehold Premises |
22,400 |
||
|
Bills Payable |
16,000 |
Plant and Machinery |
11,800 |
||
|
Capital A/cs: |
|
Fixture and Fittings |
1,540 |
||
|
Ram |
30,000 |
|
Vehicles |
800 |
|
|
Shyam |
25,000 |
|
Stock (14,100 – 705) |
13,395 |
|
|
Arjun |
20,000 |
75,000 |
Bills Receivables |
13,060 |
|
|
|
|
Debtors |
27,500 |
|
|
|
Current A/cs: |
|
Less: 2% Reserve for D. Debts |
550 |
26,950 |
|
|
Ram |
4,883 |
|
Bank |
1,590 |
|
|
Shyam |
4,202 |
9,085 |
Cash (950 + 20,000 + 6,600) |
27,550 |
|
|
|
|
|
|
|
|
|
|
1,19,085 |
|
1,19,085 |
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|
Journal |
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|
Particulars |
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
|
Cash A/c |
Dr. |
|
26,600 |
|
|
To Arjun’s Capital |
|
|
20,000 |
|
|
To Premium for Goodwill |
|
|
6,600 |
|
|
(Arjun brought Capital and share of goodwill) |
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|
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|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
6,600 |
|
|
To Ram’s Current A/c |
|
|
3,600 |
|
|
To Shyam’s Current A?C |
|
|
3,000 |
|
|
(Premium for Goodwill transferred to partners |
|
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|
|
|
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|
Arjun admitted for
share of profitLet the combined share of all partner after Arjun’s admission be = 1
Combined share of Ram and Shyam after Arjun’s admission
New Ratio = Old Ratio − Combined share of Ram and Shyam
Working Notes
WN1 Distribution of Premium for Goodwill
WN2 Distribution of Loss on Revaluation
Page No 5.105:
Question 84:
Following is the Balance Sheet of X and Y as at 31st March, 2019 who are partners in a firm sharing profits and losses in the ratio of 3 : 2 respectively:
| Liabilities | Amount (₹) |
Assets | Amount (₹) | ||
| Creditors | 45,000 | Cash at Bank | 15,000 | ||
| General Reserve | 36,000 | Debtors | 60,000 | ||
| Capital A/cs: | Less: Provision for Doubtful Debts | 2,400 | 57,600 | ||
| X | 1,80,000 | Patents | 44,400 | ||
| Y | 90,000 | 2,70,000 | Investments | 24,000 | |
| Current A/cs: | Fixed Assets | 2,16,000 | |||
| X | 30,000 | Goodwill | 30,000 | ||
| Y | 6,000 | 36,000 | |||
| 3,87,000 | 3,87,000 | ||||
Z is admitted as a new partner on 1st April, 2019 on the following terms:
(a) Provision for doubtful debts is to be maintained at 5% on Debtors.
(b) Outstanding rent amounted to ₹ 15,000.
(c) An accrued income of ₹ 4,500 does not appear in the books of the firm. It is now to be recorded.
(d) X takes over the Investments at an agreed value of ₹ 18,000.
(e) New Profit-sharing Ratio of partners will be 4 : 3 : 2.
(f) Z will bring in ₹ 60,000 as his capital by cheque.
(g) Z is to pay an amount equal to his share in firm's goodwill valued at twice the average profit of the last three years which were ₹ 90,000; ₹ 78,000 and ₹ 75,000 respectively.
(h) Half of the amount of goodwill is to be withdrawn by X and Y.
You are required to pass Journal entries, prepare Revaluation Account, Partners' Capital and Current Accounts and the Balance Sheet of the new firm.
Answer:
|
Revaluation Account |
|||
|
Dr. |
|
Cr. |
|
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Prov. for D. Debts |
600 |
Accrued Income |
4,500 |
|
Outstanding Rent |
15,000 |
Loss transferred to |
|
|
Investments |
6,000 |
X’s Current A/c |
10,260 |
|
Y’s Current A/c |
6,840 |
||
|
|
|
||
|
|
21,600 |
|
21,600 |
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
X | Y | Z |
Particulars |
X | Y | Z |
|
|
|
|
|
Balance b/d |
1,80,000 |
90,000 |
|
|
Balance c/d |
1,80,000 |
90,000 |
60,000 |
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