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#### 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
Z is admitted as a new partner for 1/4th  share under the following terms :
(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.

 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 as on 1st April, 2018 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

#### 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 as at 31st March, 2018 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.

 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)

#### 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.

 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

#### 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

(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  Xbad to the full extent;
₹ 4,000 due from Yinsolvent , estate expected to pay  only 50%.
You are required to prepare Revaluation Account , Partners' Capital Accounts and Balance Sheet of the new firm.

 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

#### 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.

 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 in sacrificing ratio i.e. 3:1)

#### 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

 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

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

#### 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.

 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 Capital Account) 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)

#### 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.

 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

#### 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
They admit Z into partnership on the same date on the following terms;
(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.