q 62 answer plz
Q62. Given below is the Balance Sheet of A and B, who are carrying on partnership business on 31st March, 2018. A and B share profit and losses in the ratio of 2 : 1.
BALANCE SHEET OF A AND B as at 31st March, 2018
| Liabilities | Amount | Assets | Amount |
| Bills Payable Creditors Outstanding Expenses Capital A/cs: A 1,80,000 B 1,50,000 |
10,000 58,000 2,000 3,30,000 |
Cash in Hand Cash at Bank Sundry Debtors Stock Plant Building |
10,000 40,000 60,000 40,000 1,00,000 1,50,000 |
| 4,00,000 | 4,00,000 |
C is admitted as a partner on the date of the Balance Sheet on the following terms:
(a) C will bring in Rs. 1,00,000 as his capital and Rs.60,000 as his share of goodwill for 1/4 th share in the profits.
(b) Plant is to be appreciated to Rs.1,20,000 and the value of building is to be appreciated by 10%.
(c) Stock is found overvalued by Rs. 4,000.
(d) A provision for doubtful debts is to be created at 5% of sundry debtors.
(e) Creditors were unrecorded to the extent of Rs. 1,000.
Pass the necessary Journal entries, prepare the Revaluation Account and Partners's Capital Accounts and show the Balance Sheet after the admission of C.
[Ans : Gain of Revaluation – Rs. 27; 000; Capital A/cs : A – Rs.2,38,000; B – Rs. 1,79,000; C– Rs.1,00,000; Balance Sheet Total – Rs. 5,88,000]
Dear Student,
Note: Since no information is given about the share of sacrifice, it is assumed that the old partners are sacrificing in their old profit sharing ratio.
| Journal | ||||||
| Date | Particulars | L.F. | Amount Rs | Amount Rs | ||
| 2018 | ||||||
| Mar 31 | Bank A/c | Dr. | 1,60,000 | |||
| To C’s Capital A/c | 1,00,000 | |||||
| To Premium for Goodwill A/c | 60,000 | |||||
| (Capital and premium for goodwill brought by C for 1/4 share) | ||||||
| Premium for Goodwill A/c | Dr. | 60,000 | ||||
| To A’s Capital A/c | 40,000 | |||||
| To B’s Capital A/c | 20,000 | |||||
| (Premium for Goodwill brought transferred to old partners’ capital account in their sacrificing ratio) | ||||||
| Plant A/c | Dr. | 20,000 | ||||
| Building A/c | Dr. | 15,000 | ||||
| To Revaluation A/c | 35,000 | |||||
| (Increase in value of assets) | ||||||
| Revaluation A/c | Dr. | 8,000 | ||||
| To Stock | 4,000 | |||||
| To Provision for Doubtful Debts A/c | 3,000 | |||||
| To Creditors A/c (Unrecorded) | 1,000 | |||||
| (Assets and liabilities revalued) | ||||||
| Revaluation A/c | Dr. | 27,000 | ||||
| To A’s Capital A/c | 18,000 | |||||
| To B’s Capital A/c | 9,000 | |||||
| (Profit on revaluation transferred to old partners) | ||||||
| Revaluation Account | ||||||
| Dr. | Cr. | |||||
| Particulars | Amount Rs | Particulars | Amount Rs | |||
| Stock | 4,000 | Plant | 20,000 | |||
| Provision for Doubtful Debts | 3,000 | Building | 15,000 | |||
| Creditors (Unrecorded) | 1,000 | |||||
| Revaluation Profit | ||||||
| A’s Capital | 18,000 | |||||
| B’s Capital | 9,000 | 27,000 | ||||
| 35,000 | 35,000 | |||||
| Partners’ Capital Account | ||||||||
| Dr. | Cr. | |||||||
| Particulars | A | B | C | Particulars | A | B | C | |
| Balance c/d | 2,38,000 | 1,79,000 | 1,00,000 | Balance b/d | 1,80,000 | 1,50,000 | ||
| Bank | 1,00,000 | |||||||
| Premium for Goodwill | 40,000 | 20,000 | ||||||
| Revaluation | 18,000 | 9,000 | ||||||
| 2,38,000 | 1,79,000 | 1,00,000 | 2,38,000 | 1,79,000 | 1,00,000 | |||
| Balance Sheet as on March 31, 2018 | |||||||
| Liabilities | Amount (Rs) | Assets | Amount (Rs) | ||||
| Bills Payable | 10,000 | Cash in Hand | 10,000 | ||||
| Creditors | 59,000 | Cash at Bank | 2,00,000 | ||||
| Outstanding Expenses | 2,000 | Sundry Debtors | 60,000 | ||||
| Capital: | Less: Provision for Doubtful Debt | 3,000 | 57,000 | ||||
| A | 2,38,000 | Stock | 36,000 | ||||
| B | 1,79,000 | Plant | 1,20,000 | ||||
| C | 1,00,000 | 5,17,000 | Building | 1,65,000 | |||
| 5,88,000 | 5,88,000 | ||||||
Note: Since no information is given about the share of sacrifice, it is assumed that the old partners are sacrificing in their old profit sharing ratio.