Double Entry Book Keeping Ts Grewal Vol I 2018 Solutions for Class 12 Commerce Accountancy Chapter 4 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 2018 Book of Class 12 Commerce Accountancy Chapter 4 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 2018 Solutions. All Double Entry Book Keeping Ts Grewal Vol I 2018 Solutions for class Class 12 Commerce Accountancy are prepared by experts and are 100% accurate.
Page No 4.100:
Question 71:
X and Y are partners sharing profits and losses equally. Their Balance Sheet as on 31st March, 2018 is given below:
|
|||||
Liabilities |
₹ |
Assets |
₹ |
||
Capital A/cs: |
|
Land and Building |
1,50,000
|
||
X |
1,50,000 |
|
Plant and Machinery | 1,00,000 | |
Y |
1,00,000 |
2,50,000
|
Furniture and Fittings | 25,000 | |
Current A/cs: | Stock |
75,000
|
|||
X |
40,000 |
|
Debtors
|
75,000
|
|
Y | 30,000 | 70,000 | Less: 5% Reserve for D. Debts | 5,000 | 70,000 |
Creditors |
1,30,000 | Bill Receivalbe |
30,000
|
||
Bill Payable |
|
50,000
|
Bank |
50,000
|
|
|
|
|
|
||
|
5,00,000 |
|
5,00,000 |
||
|
|
|
|
(a) Z is to introduce ₹ 1,25,000 as capital .
(b) Goodwill of the firm was valued at nil.
(c) It is found that the creditors included a sum of ₹ 7,500 which was not to be paid . But it was also found that there was a liability for compensation to Workmen amounting to ₹ 10,000.
(d) Provision for Doubtful Debts is to be created @ 10% on debtors.
(e) In regard to the Partners' Capital Accounts present fixed capital method is to be converted into fluctuating capital method .
(f) Bills of ₹ 20,000 accepted from creditors were not recorded in the books.
(g) X provides ₹ 50,000 loan to the business carrying interest @ 10% p.a.
You are required to prepare Revaluation Account , Partners' Capital Accounts, Bank Account and the Balance Sheet of the new firm.
Answer:
Revaluation Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Reserve for D. Debts |
2,500 |
Creditors |
7,500 |
Liability for WCF | 10,000 |
Loss transferred to |
|
X’s Current A/c |
2,500 |
||
Y’s Current A/c |
2,500 |
||
|
|
||
|
12,500 |
|
12,500 |
|
|
|
|
Partners’ Current Accounts |
|||||
Dr. |
Cr. |
||||
Particulars |
X | Y |
Particulars |
X | Y |
Revaluation A/c |
2,500 |
2,500 |
Balance b/d |
40,000 |
30,000 |
Balance c/d |
37,500 |
27,500 |
|||
|
40,000 |
30,000 |
|
40,000 |
30,000 |
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||||
Dr. |
|
Cr. |
|||||||
Particulars |
X | Y | Z |
Particulars |
X | Y | Z | ||
|
Balance b/d |
1,50,000 |
1,00,000 |
|
|||||
|
|
|
|
Current A/c | 37,500 | 27,500 |
|
||
Balance c/d |
1,87,500 | 1,27,500 |
1,25,000 |
Bank |
|
|
1,25,000 |
||
|
1,87,500 | 1,27,500 |
1,25,000 |
|
1,87,500 | 1,27,500 |
1,25,000 |
||
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Creditors (1,30,000 – 7,500 – 20,000) |
1,02,500 |
Land and Building |
1,50,000 |
||
Bills Payable (50,000 + 20,000) |
70,000 |
Plant and Machinery |
1,00,000 |
||
Capital A/cs: |
|
Fixture and Fittings |
25,000 |
||
X |
1,87,500 |
|
Stock | 75,000 | |
Y |
1,27,500 |
|
Bills Receivables |
30,000 |
|
Z |
1,25,000 |
4,40,000 |
Bank (50,000 + 1,25,000 + 50,000) |
2,25,000 |
|
X's Loan |
50,000 |
Debtors |
75,000 |
|
|
Liability for WCF |
10,000 |
Less: 10% Reserve for D. Debts |
7,500 |
67,500 |
|
|
|
|
|||
|
|
|
|
|
|
|
6,72,500 |
|
6,72,500 |
||
|
|
|
|
Page No 4.100:
Question 72:
Rajesh and Ravi are partners sharing profits in the ratio of 3: 2 . Their Balance Sheet at 31st March , 2018 stood as:
BALANCE SHEET |
|||||
Liabilities |
₹ |
Assets |
₹ |
||
Creditors |
38,500 |
Cash |
2,000 |
||
Outstanding Rent | 4,000 | Stock | 15,000 | ||
Capital A/cs: | Prepaid Insurance | 1,500 | |||
|
Debtors |
9,400 |
|
||
|
|
|
Less : Provision for D.D. |
400 |
9,000 |
Rajesh | 29,000 | ||||
Ravi
|
15,000
|
44,000 |
|
||
Machinery | 19,000 | ||||
Building | 35,000 | ||||
Furniture | 5,000 | ||||
|
86,500 |
|
86,500 |
||
|
|
|
|
Raman is admitted as a new partner introducing a capital of ₹ 16,000. The new profit-sharing ratio is decided as 5 : 3 : 2 . Raman is unable to bring in any cash for goodwill . So it is decided to value the goodwill on the basis of Raman's share in the profits and the capital contributed by him. Following revaluation s are made
(a) Stock to depreciate by 5% ;
(b) Provision for Doubtful Debts is to be ₹ 500;
(c) Furniture to depreciate by 10% ;
(d) Building is valued at ₹ 40,000.
Show necessary Ledger Accounts and Balance Sheet of new firm.
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Stock |
750 |
Building |
5,000 |
|
Provision for D. Debts |
500 |
|
|
|
Less: Old Provision |
400 |
100 |
|
|
Furniture |
500 |
|
|
|
|
|
|
|
|
Profit on Revaluation transferred to |
|
|
|
|
Rajesh Capital |
2,190 |
|
|
|
Ravi Capital |
1,460 |
|
|
|
|
5,000 |
|
5,000 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
Rajesh |
Ravi |
Raman |
Particulars |
Rajesh |
Ravi |
Raman |
|
|
|
|
Balance b/d |
29,000 |
15,000 |
|
|
|
|
|
Revaluation |
2,190 |
1,460 |
|
Balance c/d |
31,190 |
16,460 |
16,000 |
Cash |
|
|
16,000 |
(before and just went of |
|
|
|
|
|
|
|
Goodwill) |
|
|
|
|
|
|
|
|
31,190 |
16,460 |
16,000 |
|
31,190 |
16,460 |
16,000 |
Rajesh’s Capital |
|
|
1,635 |
Balance c/d |
31,190 |
16,460 |
16,000 |
Raman’s Capital |
|
|
1,635 |
Raman’s Capital |
1,635 |
1,635 |
|
Balance c/d |
32,825 |
18,095 |
12,730 |
|
|
|
|
|
32,825 |
18,095 |
16,000 |
|
32,825 |
18,095 |
16,000 |
|
|
|
|
|
|
|
|
Balance Sheet as on March 31, 2018 after Raman’s admission |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Creditors |
38,500 |
Cash (2,000 + 16,000) |
18,000 |
||
Outstanding Rent |
4,000 |
Stock (15,000 – 750) |
14,250 |
||
Capital A/cs: |
|
Prepaid Insurance |
1,500 |
||
Rajesh |
32,825 |
|
Debtors |
9,400 |
|
Ravi |
18,095 |
|
Less: Provision for D. Debts |
500 |
8,900 |
Raman |
12,730 |
63,730 |
Machinery |
19,000 |
|
|
|
Building (35,000 + 5,000) |
40,000 |
||
|
|
Furniture (5,000 – 500) |
4,500 |
||
|
1,06,150 |
|
1,06,150 |
||
|
|
|
|
Working Notes-
WN1 Calculation of Sacrificing Ratio

Sacrificing Ratio = Old Ratio − New Ratio


WN2 Calculation of Goodwill
Actual Capital of all Partners before adjustment of goodwill = Rajesh’s Capital + Ravi’s Capital + Raman’s Capital
= 31,190 + 16,460 + 16,000
= Rs 63,650
Capitalised value on the basis of Raman’s share



Raman’s share of Goodwill


WN3 Adjustment of Raman’s share of goodwill
Rajesh and Ravi each Capital Accounts will be credited by

Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Raman’s Capital A/c |
Dr. |
|
3,270 |
|
To Rajesh’s Capital A/c |
|
|
1,635 |
|
To Ravi’s Capital A/c |
|
|
1,635 |
|
(Raman’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
WN4 Distribution of Profit on Revaluation (in old ratio)

Page No 4.101:
Question 73:
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, 2018 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 in ₹ 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 2017-18.
(d) Depreciation on Building of ₹ 3,000 had been omitted for the year 2017-18.
(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 2017-18 but ₹ 600 of this are related to the period after 31st March, 2018.
Answer:
Revaluation Account |
|||
Dr. |
|
|
Cr. |
Particulars |
Amount Rs |
Particulars |
Amount Rs |
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, 2018 after C’s admission |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
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 Rs |
Particulars |
Amount Rs |
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 4.101:
Question 74:
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, 2018 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 1/5 th share of goodwill.
(c) Stock is undervalued by 10%.
(d) Creditors include a contingent 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

₹ 4,000 due from Y

You are required to prepare Revaluation Account , Partners' Capital Accounts and Balance Sheet of the new firm.
Answer:
Revaluation Account |
|||
Dr. |
|
|
Cr. |
Particulars |
Amount Rs |
Particulars |
Amount Rs |
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, 2018 after C’s admission |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
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 4.102:
Question 75:
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, 2018 |
||||
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, 2018, 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) The 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) The 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
Note: There will be no entry for the promise made by Mohan, since it is an event and not a transaction. There is another view , ₹ 3,000 is to be considered as bad debts recovered . In this situation result will be as follows :
Gain( Profit) on Revaluation₹ 36,000; Capital A/cs: A₹ 1,66,000; B₹ 1,42,000; C₹ 1,16,000; D's Capital₹ 1,20,000; Balance Sheet Total₹ 5,72,000.
Answer:
Revaluation Account |
||||
Dr. |
|
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
|
|
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, 2018, after D’s admission |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
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 Rs |
Credit Amount Rs |
|
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 4.103:
Question 76:
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, 2018:
|
||||
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, 2018 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 Rs |
Particulars |
Amount Rs |
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, 2018 after C’s admission |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
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 Rs |
Particulars |
Amount Rs |
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 4.103:
Question 77:
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, 2018 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, 2018 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.
Note: Z's Share of Goodwill ₹ 20,000 (i.e, ₹ 1,00,000 1/5 ) can be adjusted through Z's Current A/c. In that situation, Partners' Capital A/cs: X₹ 1,87,875; Y₹ 92,625; Z₹ 50,000; Z's Current A/c (Dr.)₹ 20,000; Balance Sheet Total₹ 5,18,000.
Answer:
Revaluation Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
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, 2018 after Z’s admission |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
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 Rs |
Credit Amount Rs |
|
|
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 4.104:
Question 78:
Deepika and Rajshree are partners in a firm sharing profits and losses in the ratio of 3 : 2 . On 31st March,2018 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 |
|
|
|
|
|
Less : Provision for D.D. |
800 |
28,000 |
Deepika |
48,000 |
|
|
|
|
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 the above date , the partners decided to 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 and 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 Rs |
Particulars |
Amount Rs |
|
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, 2018 after Anshu’s admission |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
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 4.104:
Question 79:
X and Y are partners sharing profits in the ratio of 2 : 1 . Their Balance Sheet as at 31st March, 2018 was:
|
||||
Liabilities |
₹ |
Assets |
₹ |
|
Sundry Creditors |
25,000 |
Cash/Bank |
5,000 |
|
General Reserve | 18,000 | Sundry Debtors | 15,000 | |
Capital A/cs: | Stock | 10,000 | ||
X |
75,000 |
|
Investments |
8,000 |
Y |
62,000 |
1,37,000 |
Typewriter |
5,000 |
|
Fixed Assets |
1,37,000 |
||
|
|
1,80,000 |
|
1,80,000 |
|
|
|
|
|
(a) Z brings in ₹ 40,000 as his capital and he is given 1/4th share in profits.
(b) Z brings in ₹ 15,000 for goodwill, half of which is withdrawn by old partners .
(c) Investments are valued at ₹ 10,000 . X takes over Investments at this value.
(d) Typewriter is to be depreciated by 20% and Fixed Assets by 10%.
(e) An unrecorded stock of Stationery on 31st March,2018 is ₹ 1,000.
(f) By bringing in r withdrawing cash , the Capitals of X and Y are to be made proportionate to that of Z on their profit-sharing basis.
Pass journal entries , prepare Revaluation Account , Capital Accounts and new Balance Sheet of the firm.
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
|
|
|
|
April 1 |
Revaluation A/c |
Dr. |
|
14,700 |
|
|
To Typewriter A/c |
|
|
1,000 |
|
|
To Fixed Assets A/c |
|
|
13,700 |
|
|
(Decrease in value of typewriter and fixed assets transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
|
April 1 |
Stationery A/c |
Dr. |
|
1,000 |
|
|
Investment A/c |
Dr. |
|
2,000 |
|
|
To Revaluation A/c |
|
|
3,000 |
|
|
(Increase in stationery and investment transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
|
April 1 |
X’s Capital A/c |
Dr. |
|
7,800 |
|
|
Y’s Capital A/c |
Dr. |
|
3,900 |
|
|
To Revaluation A/c |
|
|
11,700 |
|
|
(Revaluation loss transferred to X and Y’s |
|
|
|
|
|
|
|
|
|
|
April 1 |
Reserve Fund A/c |
Dr. |
|
18,000 |
|
|
To X’s Capital A/c |
|
|
12,000 |
|
|
To Y’s Capital A/c |
|
|
6,000 |
|
|
(Reserve Fund distributed) |
|
|
|
|
|
|
|
|
|
|
April 1 |
Cash A/c |
Dr. |
|
55,000 |
|
|
To Z’s Capital A/c |
|
|
40,000 |
|
|
To Premium for Goodwill A/c |
|
|
15,000 |
|
|
(Z brought capital and share of goodwill) |
|
|
|
|
|
|
|
|
|
|
April 1 |
Premium for Goodwill A/c |
Dr. |
|
15,000 |
|
|
To X’s Capital A/c |
|
|
10,000 |
|
|
To Y’s Capital A/c |
|
|
5,000 |
|
|
(Premium for Goodwill distributed between X and Y in their sacrificing ratio i.e 2:1) |
|
|
|
|
|
|
|
|
|
|
April 1 |
X’s Capital A/c |
Dr. |
|
5,000 |
|
|
Y’s Capital A/c |
Dr. |
|
2,500 |
|
|
To Cash |
|
|
7,500 |
|
|
(Half of the Premium for Goodwill withdrawn by X and Y) |
|
|
|
|
|
|
|
|
|
|
April 1 |
X’s Capital A/c |
Dr. |
|
10,000 |
|
|
To Investments A/c |
|
|
10,000 |
|
|
(X took over the Investment) |
|
|
|
|
|
|
|
|
|
|
April 1 |
Cash A/c |
Dr. |
|
4,800 |
|
|
To X’s Capital A/c |
|
|
4,800 |
|
|
(X’ brought cash to make up deficiency in capital) |
|
|
|
|
|
|
|
|
|
|
April 1 |
Y’s Capital A/c |
Dr. |
|
26,600 |
|
|
To Cash A/c |
|
|
26,600 |
|
|
(Y withdrew excess capital after all adjustments) |
|
|
|
|
|
|
|
|
|
Cash/Bank Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
5,000 |
X’s Capital (Goodwill) |
5,000 |
Z’s Capital |
40,000 |
Y’s Capital (Goodwill) |
2,500 |
Premium for Goodwill |
15,000 |
Y’s Capital |
26,600 |
X’s Capital |
5,800 |
Balance c/d |
31,700 |
|
65,800 |
|
65,800 |
|
|
|
|
Revaluation Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
|
|
|
Typewriter (5,000 × 20%) |
1,000 |
Investment |
2,000 |
Fixed Assets (1,37,000 × 10%) |
13,700 |
Stationery |
1,000 |
|
|
Loss transferred to |
|
|
|
X Capital |
7,800 |
|
|
Y Capital |
3,900 |
|
14,700 |
|
14,700 |
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Revaluation |
7,800 |
3,900 |
|
Balance b/d |
75,000 |
62,000 |
|
Investment |
10,000 |
|