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Page No 3.100:

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

 

 

 

 

 

 

 

C’s Capital A/c

Dr.

 

6,900

 

 

     To A’s Capital A/c

 

 

 

4,140

 

     To B’s Capital A/c

 

 

 

2,760

 

(Revaluation adjusted)

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet 

Liabilities

Amount

Rs

Assets

Amount

Rs

Creditors

30,000

Freehold Premises

2,00,000

Bills Payable

20,000

Plant

40,000

Capital

 

Furniture

20,000

X

2,10,140

 

Office Equipment

25,000

Y

1,06,760

 

Bank (10,000+50,000+10,000)

70,000

Z

43,100

3,60,000

Stock

30,000

 

 

Debtors

25,000

 

4,10,000

 

4,10,000

 

 

 

 

 

Working Notes:

WN 1: Calculation of Profit on Revaluation:
 

Particulars

Amount

Rs

Freehold Premises

40,000

Furniture

5,000

Office Equipment

2,500

Less:  

   Provision  for Doubtful Debts

5,000

   Stock

3,000

   Plant

5,000

Profit on Revaluation

34,500


WN 2:

C's Share in Revaluation= 34,500×15=Rs 6,900 and it should be credited to A& B in the ratio of 3:2A's Share = 6,900×35=4,140B's Share = 6,900×25=2,760
 

WN 3: Calculation of Distribution of Goodwill


A's  Share=10,000×35=6,000B's  Share=10,000×25=4,000
 

WN 4: Calculation of Capital of Partners’

A's  Capital=2,00,000+4,140+6,000=2,10,140B's  Capital=1,00,000+2,760+4,000=1,06,760C's  Capital=50,000-6,900=43,100

Page No 3.100:

Answer:

 
Books of ….
 
Journal
Date
Particulars
L.F.
Debit Amount
Rs
Credit Amount
Rs
  General Reserve A/c
Dr.
 
1,60,000
 
     To A’s Capital A/c    
96,000
     To B’s Capital A/c    
64,000
  (General reserve distributed between old partners in their old ratio)      
         
  A’s Capital A/c Dr.  
72,000
 
  B’s Capital A/c Dr.  
48,000
 
     To Profit and Loss A/c    
1,20,000
  (Debit balance of profit and loss distributed between old partners in their old ratio)      

Page No 3.100:

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

(a)

General Reserve A/c

Dr.

 

36,000

 

 

Contingency Reserve A/c

Dr.

 

6,000

 

 

Profit and Loss A/c

Dr.

 

18,000

 

 

To X’s Capital A/c

 

 

 

30,000

 

To Y’s Capital A/c

 

 

 

18,000

 

To Z’s Capital A/c

 

 

 

12,000

 

(Reserves and profits are distributed among the partners in their old ratio)

 

 

 

 

 

 

 

 

 

 

 

X’s Capital A/c

Dr.

 

12,000

 

 

Y’s Capital A/c

Dr.

 

7,200

 

 

Z’s Capital A/c

Dr.

 

4,800

 

 

To Advertisement Suspense A/c

 

 

 

24,000

 

(Balance of advertisement suspense is debited to partners’ capital accounts in old ratio)

 

 

 

 

 

 

 

 

 

 

(b)

General Reserve A/c

Dr.

 

84,000

 

 

To A’s Capital A/c

 

 

 

48,000

 

To B’s Capital A/c

 

 

 

36,000

 

(Reserve distributed between the partners in their old ratio)

 

 

 

 

 

 

 

 

 

 

 

A’s Capital A/c

Dr.

 

4,800

 

 

B’s Capital A/c

Dr.

 

3,600

 

 

To Profit & Loss A/c

 

 

 

8,400

 

(Balance of profit and loss debited to partners’ capital accounts in old ratio)

 

 

 

 

 

 

 

 

 

 

(c)

Workmen Compensation Reserve A/c

Dr.

 

72,000

 

 

To X’s Capital A/c

 

 

 

36,000

 

To Y’s Capital A/c

 

 

 

36,000

 

(Balance of WCR distributed between the partners in their old ratio, i.e. 1:1)

 

 

 

 

 

 

 

 

 

 

(d)

Workmen Compensation Reserve A/c

Dr.

 

72,000

 

 

  To Workmen Compensation Claim A/c

 

 

 

48,000

 

To X’s Capital A/c

 

 

 

12,000

 

To Y’s Capital A/c

 

 

 

12,000

 

(Claim against WCF is created and excess balance is distributed between the partners in their old ratio, i.e. 1:1)

 

 

 

 

 

 

 

 

 

 

(e)

Investment Fluctuation Reserve A/c

Dr.

 

24,000

 

 

To Investments A/c

 

 

 

10,000

 

To X’s Capital A/c

 

 

 

7,000

 

To Y’s Capital A/c

 

 

 

7,000

 

(Balance of IFR transferred to Investments for the decrease and excess balance is distributed between the partners in their old ratio, i.e. 1:1)

 

 

 

 

 

 

 

 

 

 

(f)

General Reserve A/c

Dr.

 

4,800

 

 

To Investment Fluctuation Reserve A/c

 

 

 

960

 

To X’s Capital A/c

 

 

 

1,920

 

To Y’s Capital A/c

 

 

 

1,920

 

(20% of general reserve transferred to IFR and balance is distributed between the partners in their old ratio, i.e. 1:1)

 

 

 

 

 

 

 

 

 

(g)


Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

 

C’s Current A/c

Dr.

 

36,000

 

 

D’s Current A/c

Dr.

 

18,000

 

 

To A’s Current A/c

 

 

 

54,000

 

(Gaining partners’ compensated to Sacrificing Partner)

 

 

 

 

 

Working Notes:

WN1: Calculation of Adjusted Balance

Particulars

Amount

General Reserve

1,50,000

Contingency Reserve

60,000

P&L A/c (Cr.)

90,000

Advertisement Suspense A/c (Dr.)

(1,20,000)

Adjusted Balance

1,80,000

 

WN2: Calculation of Sacrifice/(Gain)

Sacrifice = Old Ratio ˗ New Ratio

A=610310=310B=310310=0C=110310=210(Gain)

Amount of gain to C=1,80,000×210=36,000Amount of gain to D=1,80,000×110=18,000



Page No 3.101:

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

 

 

 

 

 

 

Case 1

Workmen Compensation Reserve A/c

Dr.

 

12,000

 

 

   To X’s Capital A/c

 

 

 

6,000

 

   To Y’s Capital A/c

 

 

 

3,600

 

   To Z’s Capital A/c

 

 

 

2,400

 

(Workmen Compensation Reserve distributed)

 

 

 

 

 

 

 

 

 

 

Case 2

Workmen Compensation Reserve A/c

Dr.

 

12,000

 

 

   To Workmen Compensation Claim A/c

 

 

 

1,500

 

   To X’s Capital A/c

 

 

 

5,250

 

   To Y’s Capital A/c

 

 

 

3,150

 

   To Z’s Capital A/c

 

 

 

2,100

 

(Workmen Compensation Reserve distributed)

 

 

 

 

 

 

 

 

 

 

Case 3

Workmen Compensation Reserve A/c

Dr.

 

12,000

 

 

Revaluation A/c

Dr.

 

10,000

 

 

   To Workmen Compensation Claim A/c

 

 

 

22,000

 

(Workmen Compensation Reserve adjusted towards the claim)

 

 

 

 

 

 

 

 

 

 

 

 X’s Capital A/c

Dr.

 

5,000

 

 

 Y’s Capital A/c

Dr.

 

3,000

 

 

 Z’s Capital A/c

Dr.

 

2,000

 

 

    To Revaluation A/c

 

 

 

10,000

 

(Partner contributed for workmen compensation claim deficiency)

 

 

 

 

Page No 3.101:

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

 

 

 

 

 

 

Case 1

Investment Fluctuation Reserve A/c

Dr.

 

10,000

 

 

   To X’s Capital A/c

 

 

 

5,000

 

   To Y’s Capital A/c

 

 

 

3,000

 

   To Z’s Capital A/c

 

 

 

2,000

 

(Investment Fluctuation Reserve distributed)

 

 

 

 

 

 

 

 

 

 

Case 2

Investment Fluctuation Reserve A/c

Dr.

 

10,000

 

 

   To X’s Capital A/c

 

 

 

5,000

 

   To Y’s Capital A/c

 

 

 

3,000

 

   To Z’s Capital A/c

 

 

 

2,000

 

(Investment Fluctuation Reserve distributed)

 

 

 

 

 

 

 

 

 

 

Case 3

Investment Fluctuation Reserve A/c

Dr.

 

10,000

 

 

   To Investment A/c

 

 

 

5,000

 

   To X’s Capital A/c

 

 

 

2,500

 

   To Y’s Capital A/c

 

 

 

1,500

 

   To Z’s Capital A/c

 

 

 

1,000

 

(Excess Investment Fluctuation Reserve distributed)

 

 

 

 

 

 

 

 

 

 

Case 4

Investment Fluctuation Reserve A/c

Dr.

 

10,000

 

 

Revaluation A/c

Dr.

 

5,000

 

 

     To Investment A/c

 

 

 

15,000

 

(Investment Fluctuation Reserve adjusted towards decrease in value of investment)

 

 

 

 

 

 

 

 

 

 

 

 X’s Capital A/c

Dr.

 

2,500

 

 

Y’s Capital A/c

Dr.

 

1,500

 

 

 Z’s Capital A/c

Dr.

 

1,000

 

 

    To Revaluation A/c

 

 

 

5,000

 

( Partner contributed for Investment fluctuation reserve deficiency)

 

 

 

 

 

 

 

 

 

 

Case 5

Investment Fluctuation Reserve A/c

Dr.

 

10,000

 

 

   To X’s Capital A/c

 

 

 

5,000

 

   To Y’s Capital A/c

 

 

 

3,000

 

   To Z’s Capital A/c

 

 

 

2,000

 

(Investment Fluctuation Reserve distributed)

 

 

 

 

 

 

 

 

 

 

 

Investment A/c

Dr.

 

10,000

 

 

    To Revaluation A/c

 

 

 

10,000

 

(Surplus in value of Investment transferred to Revaluation a/c)

 

 

 

 

 

 

 

 

 

 

 

Revaluation A/c

Dr.

 

10,000

 

 

 To X’s Capital A/c

 

 

 

5,000

 

 To Y’s Capital A/c

 

 

 

3,000

 

 To Z’s Capital A/c

 

 

 

2,000

 

(Investment Fluctuation Reserve Surplus transferred to Partners Capital A/c)

 

 

 

 

 

 

 

 

 

 

Page No 3.101:

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

 

 

 

 

 

 

 

C’s Current A/c

Dr.

 

6,000

 

 

D’s Current A/c

Dr.

 

3,000

 

 

    To A’s Current A/c

 

 

 

9,000

 

(Adjustment entry made for change in ratio)

 

 

 

 

 

 

 

 

 

 

 

Working Notes:

WN1: Calculation of Sacrifice or Gain:

A:B:C=6 :3:1 (Old Ratio)A:B:C:D=3:3:3:1 (New Ratio)A=610310=310 (Sacrifice)B=310310=0C=110310=210(Gain)D=0110=110(Gain)Amount to be adjusted = General Reserve + Contingency Reserve + Profit and LossAdvertisement Suspense                                   =30,000+5,000+15,00020,000 = Rs 30,000A's share = 30,000×310=Rs 9,000C's share = 30,000×210=Rs 6,000D's share = 30,000×110=Rs 3,000

 



Page No 3.102:

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

 

 

 

 

 

 

 

R’s Capital A/c

Dr.

 

66,000

 

 

S’s Capital A/c

Dr.

 

33,000

 

 

    To P’s Capital A/c

 

 

 

99,000

 

(Adjustment entry made for change in ratio)

 

 

 

 

 

 

 

 

 

 

 

Working Notes:

WN1: Calculation of Sacrifice or Gain:

P:Q:R=6:3:1(Old Ratio)P:Q:R:S=3:3:3:1(New Ratio)P = 610310=310(Sacrifice)Q = 310310=0R = 110310 =210(Gain)S = 0110=110(Gain)Amount to be adjusted = General Reserve + Contingency Reserve + P& L Advertisement Suspense                                       + Workmen Compensation Reserve + Investment Fluctuation Reserve                                    =2,40,000+40,000+1,20,0001,00,000+20,000+10,000 = Rs 3,30,000P's share=3,30,000×310= Rs 99,000R's share=3,30,000×210= Rs 66,000S's share=3,30,000×110= Rs 33,000

 

Particulars

Amount

(Rs)

Workmen Compensation Reserve 40,000
less: Claim on Workmen Compensation Reserve 20,000
Amount to be adjusted 20,000
   
Investment Fluctuation Reserve 20,000
less: Decrease in the Value of Investment 10,000
Amount to be adjusted 10,000

 

Page No 3.102:

Answer:

Revaluation Account
Dr.  
Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
 
 
 
 
Stock A/c
30,000
Provision for Doubtful Debts A/c
24,000
Patents A/c
74,000
Loss transferred to:  
Claim for Damages A/c
20,000
  A’s Capital A/c 60,000  
      B’s Capital A/c 40,000
1,00,000
 
1,24,000
 
1,24,000
       
 
Partners’ Capital Accounts
Dr.  
Cr.
Particulars
A
B
C
Particulars
A
B
C
               
Revaluation A/c
60,000
40,000
  Balance b/d
4,00,000
3,50,000
 
Balance c/d
5,08,000
4,22,000
3,00,000
Bank A/c    
3,00,000
        Premium for Goodwill A/c
60,000
40,000
 
        General Reserve A/c
1,08,000
72,000
 
               
 
5,68,000
4,62,000
3,00,000
 
5,68,000
4,62,000
3,00,000
               
 
Balance Sheet
as on April 01, 2017 after C’s admission
Liabilities
Amount
Rs
Assets
Amount
Rs
 
 
 
 
Sundry Creditors
3,20,000
Debtors
4,80,000
 
Claim for Damages
20,000
Less: Provision for Doubtful Debts
24,000
4,56,000
    Stock (3,00,000 – 30,000)
2,70,000
Capital A/c:   Building
2,04,000
   A
5,08,000
  Cash (2,40,000 + 4,00,000)
6,40,000
   B
4,22,000
     
   C
3,00,000
12,30,000
   
 
15,70,000
 
15,70,000
       

Working Notes

Goodwill of the Firm = 4,00,000C's Share = 4,00,000 × 14 = Rs 1,00,000

Page No 3.102:

Answer:

Revaluation Account

Dr.

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Provision for Doubtful Debts (20,000 × 4%)

800

 

Land (1, 00,000 × 10%)

10,000

Less: Old Provision

500

300

 

 

Stock (30,000 × 5%)

1,500

 

 

Profit transferred to

 

 

 

V Capital

5,740

 

 

N Capital

2,460

 

 

 

10,000

 

10,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

V

N

P

Particulars

V

N

P

 

 

 

 

Balance b/d

1,50,000

50,000

 

 

 

 

 

Revaluation

5,740

2,460

 

 

 

 

 

General Reserve

7,000

3,000

 

 

 

 

 

P’s Loan

 

 

80,000

Balance c/d

1,90,740

67,460

80,000

Premium for Goodwill

28,000

12,000

 

 

1,90,740

67,460

80,000

 

1,90,740

67,460

80,000

 

 

 

 

 

 

 

 

 

Balance Sheet

as on April 01, 2017 after P’s admission

Liabilities

Amount

Rs

Assets

Amount

Rs

Creditors

10,000

Cash (15,500 + 40,000)

55,500

Bills Payable

15,000

Debtors

20,000

Capital A/cs:

 

Bills Receivables

50,000

V

1,90,740

 

Stock (30,000 – 1,500)

28,500

N

67,460

 

Building

1,00,000

P

80,000

3,38,200

Land (1,00,000 + 10,000)

1,10,000

Provision for Doubtful Debts

800

 

 

 

3,64,000

 

3,64,000

 

 

 

 

Working Notes

WN1

Cash Account

Dr.

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Balance b/d

15,500

 

 

Premium for Goodwill

40,000

 

 

 

 

Balance c/d

55,500

 

55,500

 

55,500

 

 

 

 

WN2

Distribution of Premium for Goodwill



Page No 3.103:

Answer:

Revaluation Account
Dr.
 
Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
Building
62,500
Stock
2,50,000
Machinery
25,000
Unrecorded Asset
3,00,000
Outstanding Salary
75,000
 
 
Profit:
 
 
 
  X
2,32,500
 
 
 
  Y
1,55,000
3,87,500
 
 
 
5,50,000
 
5,50,000
 
 
 
 
 
Partners’ Capital Accounts
Dr.
 
Cr.
Particulars
X
Y
Z
Particulars
X
Y
Z
 
 
 
 
 
 
 
 
Goodwill
75,000
50,000
 
Balance b/d
20,00,000
10,00,000
 
X Capital A/c
 
 
75,000
Revaluation
2,32,500
1,55,000
 
Y Capital A/c
 
 
50,000
Z’s Capital A/c
75,000
50,000
 
Balance c/d
25,32,500
13,55,000
11,25,000
Premium for Goodwill
1,80,000
1,20,000
 
 
 
 
 
Z’s Current A/c
1,20,000
80,000
 
 
 
 
 
Bank
 
 
12,50,000
 
26,07,500
14,05,000
12,50,000
 
26,07,500
14,05,000
12,50,000
 
 
 
 
 
 
 
 
 

Cash at Bank Account

Dr.

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Balance b/d

14,37,500

Debtors

62,500

Z’s capital A/c

12,50,000

Balance c/d

29,25,000

Premium for goodwill A/c

3,00,000

 

 

 

29,87,500

 

29,87,500

 

 

 

 

                   

Balance Sheet

Liabilities

Amount

Rs

Assets

Amount

Rs

General Reserve

3,75,000

Cash

62,500

Bills Payable

2,50,000

Bank

29,25,000

Creditors

6,25,000

Debtors (1,25,000 + 62,500)

1,87,500

Capital

 

Stock

10,00,000

X

25,32,500

 

Building

12,50,000

 

Y

13,55,000

 

 Less: Depreciation

62,500

11,87,500

Z

11,25,000

50,12,500

Machines

5,00,000

 

Outstanding Salary

75,000

 Less: Depreciation

25,000

4,75,000

   

Unrecorded Assets

3,00,000

   

Z’s Current A/c

2,00,000

 

63,37,500

 

63,37,500

       


For Adjusting General Reserve

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

 

 

 

 

 

 

 

Z’s Capital A/c

Dr.

 

1,25,000

 

 

    To X’s Capital A/c

 

 

 

75,000

 

    To Y’s Capital A/c

 

 

 

50,000

 

(Adjustment made for General Reserve)

 

 

 

 

 

 

 

 

 

 


For Calculating amount to be adjusted for General Reserve

Z's share of General Reserve = 13×3,75,000 =Rs 1,25,000
Amount to be credited to
X Capital A/c = 35×1,25,000 =Rs 75,000

Y Capital A/c =25×1,25,000 =Rs 50,000

 

Page No 3.103:

Answer:

Revaluation Account
Dr.  
Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
Provision for Doubtful Debts A/c
1,500
Land and Building A/c
3,000
Profit transferred to:   Stock A/c
2,500
X’s Capital A/c 2,400      
Y’s Capital A/c 1,600
4,000
   
 
5,500
 
5,500
       
 
Partners’ Capital Accounts
Dr.  
Cr.
Particulars
X
Y
Z
Particulars
X
Y
Z
Advertisement Expenditure A/c
3,000
2,000
  Balance b/d
15,000
10,000
 
Balance c/d
40,200
26,800
15,000
Bank A/c    
15,000
        Premium for Goodwill A/c
6,000
4,000
 
        Revaluation A/c
2,400
1,600
 
        General Reserve A/c
12,000
8,000
 
        Workmen Compensation Reserve A/c
7,800
5,200
 
  43,200 28,800 15,000  
43,200
28,800
15,000
               
 
Balance Sheet
as on April 01, 2017 after Z’s admission
Liabilities
Amount
Rs
Assets
Amount
Rs
Sundry Creditors
1,10,000
Debtors
22,000
 
Employees’ Provident Fund
8,000
  Less: Provision for Doubtful Debts
2,500
19,500
Workmen Compensation Reserve
12,000
Land and Building (68,000 + 3,000)
71,000
Capital A/cs:   Plant and Machinery
12,000
   X
40,200
  Stock (11,000 + 2,500)
13,500
   Y
26,800
  Bank (71,000 + 10,000 + 15,000)
96,000
   Z
15,000
82,000
   
 
2,12,000
 
2,12,000
       



Page No 3.104:

Answer:

Revaluation Account
Dr.  
Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
Provision for Doubtful Debts A/c
200
Accrued Commission A/c
1,500
Outstanding Rent A/c
5,000
Loss transferred to:
 
Investments A/c
2,000
  X’s Capital A/c
3,420
 
 
 
  Y’s Capital A/c
2,280
5,700
 
7,200
 
7,200
 
 
 
 
 
Partners’ Capital Accounts
Dr.  
Cr.
Particulars
X
Y
Z
Particulars
X
Y
Z
 
 
 
 
 
 
 
 
Balance c/d
1,54,000
1,36,000
1,20,000
Balance b/d
1,54,000
1,36,000
 
 
 
 
 
Cash A/c
 
 
1,20,000
 
1,54,000
1,36,000
1,20,000
 
1,54,000
1,36,000
1,20,000
 
 
 
 
 
 
 
 
 
Partners’ Current Accounts
Dr.  
Cr.
Particulars
X
Y
Z
Particulars
X
Y
Z
Cash A/c
4,200
1,800
 
Balance b/d
10,000
2,000
 
Revaluation A/c
3,420
2,280
 
Premium for Goodwill A/c
8,400
3,600
 
Goodwill A/c
6,000
4,000
 
General Reserve A/c
7,200
4,800
 
Investments A/c
6,000
 
 
     
 
Balance c/d
5,980
2,320
 
 
 
 
 
 
25,600
10,400
 
 
25,600
10,400
 
 
 
 
 
 
 
 
 
 
Balance Sheet
as on April 01, 2017 after Z’s admission
Liabilities
Amount
Rs
Assets
Amount
Rs
Sundry Creditors
15,000
Accrued Commission
1,500
Outstanding Rent
5,000
Debtors
20,000
 
Capital A/c:
 
  Less: Provision for Doubtful Debts
1,000
19,000
   X 1,54,000
 
Patents
14,800
   Y 1,36,000
 
Cash in hand
1,51,000
   Z 1,20,000
4,10,000
Cash at Bank
1,80,000
Current A/c:
 
Machinery
72,000
   X
5,980
 
   
   Y
2,320
8,300
 
 
 
4,38,300
 
4,38,300
 
 
 
 

Working Notes

WN 1: Calculation of Sacrificing Ratio

Old ratio = 3 : 2

New profit sharing ratio = 4 : 3 : 2

Sacrificing ratio= Old ratio – New ratio

Sacrifice made by X = 35 - 49=745Sacrifice made by Y = 25 - 39=345

Sacrificing ratio = 7 : 3

WN 2: Calculation of Goodwill

Goodwill = Average Profits for Last 3 Years’ × Number of Years’ Purchase

Total Profit = 25,000 + 26000 + 30,000 = Rs 81,000

Average Profits for 3 years =Total Profit3

Average Profit = 81,0003 = 27,000

Goodwill = 27,000 × 2 = Rs 54,000

Z's share of goodwill  = 54,000 ×29=12,000

Cash Account
Dr.  
Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
Balance b/d
25,000
X’s Capital A/c
4,200
Z’s Capital A/c
1,20,000
Y’s Capital A/c
1,800
Premium for Goodwill A/c
12,000
Balance c/d
1,51,000
 
 
 
 
 
1,57,000
 
1,57,000
       

Page No 3.104:

Answer:

 
Books of ….
 
Journal
Date
Particulars
L.F.
Debit
Amount
Rs
Credit Amount
Rs
  Bank A/c
Dr.
 
40,000
 
    To Z’s Capital A/c  
 
40,000
  (Capital amount brought in by new partners)  
 
 
 
 
 
 
 
  Z’s Current A/c
Dr.
 
3,000
 
    To X’s Capital A/c
 
 
1,800
    To Y’s Capital A/c
 
 
1,200
  (Z’s Current Account debited for amount of goodwill not brought by him and credited to old partners in their sacrificing ratio)
 
 
 
   
 
 
 
  Revaluation A/c Dr.
 
2,000
 
  Provision for Doubtful Debts A/c  
 
4,000
 
     To Debtors  
 
6,000
  (Bad Debts written-off)  
 
 
   
 
 
 
  Revaluation A/c Dr.
 
2,000
 
    To Creditors A/c
 
 
2,000
  (Creditors are to be paid 2,000 more)
 
 
 
   
 
 
 
  Revaluation A/c Dr.
 
2,000
 
    To Claim for Damages A/c
 
 
2,000
  (Created claim for damages)
 
 
 
   
 
 
 
  Outstanding Rent A/c Dr.
 
1,800
 
    To Revaluation A/c
 
 
1,800
  (Outstanding rent reduced by 1,800)
 
 
 
   
 
 
 
  X’s Capital A/c Dr.
 
2,520
 
  Y’s Capital A/c Dr.
 
1,680
 
     To Revaluation A/c
 
 
4,200
  (Revaluation loss distributed among old partners in their old ratio)
 
 
 
 
Partners’ Capital Accounts
Dr.  
Cr.
Particulars
X
Y
Z
Particulars
X
Y
Z
 
 
 
 
Balance b/d
50,000
60,000
 
Revaluation A/c
2,520
1,680
 
Bank A/c    
40,000
Profit and Loss A/c
2,400
1,600
 
Z’s Current A/c
1,800
1,200
 
Balance c/d
48,440
58,960
40,000
Workmen Compensation Reserve A/c
1,560
1,040
 
 
53,360
62,240
40,000
 
53,360
62,240
40,000
 
 
 
 
 
 
 
 
 
Balance Sheet
as on April 01, 2017 after Z’s admission
Liabilities
Amount
Rs
Assets
Amount
Rs
Outstanding Rent
11,200
Debtors
80,000
 
Sundry Creditors
22,000
Less: Provision for Doubtful Debts
6,000
74,000
Workmen Compensation Reserve
3,000
Stock
20,000
Claim for Damages
2,000
   
       
Capital A/cs:
 
Machinery
38,600
   X
48,440
 
Cash (10,000 + 40,000)
50,000
   Y
58,960
 
Z’s Current A/c
3,000
   Z
40,000
1,47,400
 
 
 
1,85,600
 
1,85,600
 
 
 
 

Working Notes: Calculation of Goodwill

Average profit for 3 years = Total Profit3

Total Profit = 10,000 + 20,000 + 30,000 = Rs 60,000

Average profit for 3 years = 60,0003=20,000

Goodwill = 20,000 × 1.5 – 12,000 = 18,000

Z's share of goodwill = 18,000 × 16 = 3,000

Note: Opening Balance Sheet implies Balance Sheet as on April 01, 2016.



Page No 3.105:

Answer:

Revaluation Account

Dr.

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

 

 

 

 

Stock

30,000

Provision for d/d

24,000

Patents

74,000

Loss transferred to:

 

Outstanding Claim

20,000

    X

60,000

 

 

 

    Y

40,000

1,00,000

 

1,24,000

 

1,24,000

 

 

 

 

             

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

X

Y

Z

Particulars

X

Y

Z

 

 

 

 

 

 

 

 

X Capital A/c

 

 

21,600

Balance b/d

4,00,000

3,50,000

 

Y Capital A/c

 

 

14,400

Z’s Capital A/c

21,600

14,400

 

Revaluation A/c

60,000

40,000

 

Premium for Goodwill

60,000

40,000

 

Balance c/d

4,21,600

3,64,400

2,64,000

Cash 

 

 

3,00,000

 

4,81,600

4,04,400

3,00,000

 

4,81,600

4,04,400

3,00,000

 

 

 

 

 

 

 

 

                   

 

 

Balance Sheet 

Liabilities

Amount

Rs

Assets

Amount

Rs

General Reserve

1,80,000

Cash (2,40,000 + 1,00,000 + 3,00,000)

6,40,000

Bills Payable

50,000

Stock

2,70,000

Creditors

2,70,000

Debtors                                       

4,80,000

 

Capital

 

Less: Prov. for DD                  

24,000

4,56,000

X

4,21,600

 

Building

2,04,000

Y

3,64,400

 

 

 

Z

2,64,000

10,50,000

 

 

Outstanding Claim

20,000

 

 

 

15,70,000

 

15,70,000

 

 

 

 


Working Note:
1. Closing Stock Balance = Opening balance - Value of Stock reduced (10%)
                3,00,000 ─ 3,00,000-10100×3,00,000=2,70,000
 
2. For Calculating amount to be adjusted for General Reserve
     Z's share of General Reserve = 15×1,80,000 =Rs 36,000
    Amount to be credited to
  
    X Capital A/c = 35×36,000 =Rs 21,600

    Y Capital A/c =25× 36,000 =Rs 14,400

 

For Adjusting General Reserve

Journal
 

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

 

 

 

 

 

 

 

Z’s Capital A/c

Dr.

 

36,000

 

 

    To X’s Capital A/c

 

 

 

21,600

 

    To Y’s Capital A/c

 

 

 

14,400

 

(Adjustment made for General Reserve)

 

 

 

 

 

 

 

 

 

 

Page No 3.105:

Answer:

 
Books of ….
 
Journal
Date
Particulars
L.F.
Debit
Amount
Rs
Credit Amount
Rs
  Cash A/c
Dr.
 
22,500
 
    To T’s Capital A/c  
 
20,000
    To Premium for Goodwill A/c  
 
2,500
  (Capital and goodwill brought in by T)  
 
 
 
 
 
 
 
  T’s Current A/c
Dr.
 
7,500
 
  Premium for Goodwill A/c
Dr.
 
2,500
 
    To X’s Capital A/c
 
 
5,000
    To Y’s Capital A/c
 
 
5,000
  (Goodwill amount distributed between sacrificing partners in their sacrificing ratio)
 
 
 
   
 
 
 
  Stock A/c Dr.
 
10,000
 
     To Revaluation A/c  
 
10,000
  (Increase in value of stock)  
 
 
   
 
 
 
  Revaluation A/c Dr.
 
2,600
 
    To Furniture A/c
 
 
2,600
  (Depreciated furniture @ 10%)
 
 
 
   
 
 
 
  Land and Building A/c Dr.
 
20,000
 
     To Revaluation A/c
 
 
20,000
  (Value of land and building appreciated by 20%)
 
 
 
   
 
 
 
  Revaluation A/c Dr.
 
2,200
 
    To Provision for Doubtful Debts A/c
 
 
2,200
  (Provision created against debtors)
 
 
 
   
 
 
 
  Outstanding Liabilities A/c Dr.
 
2,000
 
     To X’s Capital A/c
 
 
2,000
  (Reimbursed X for the payment made by hi, for the outstanding liabilities)
 
 
 
   
 
 
 
  Creditors A/c Dr.  
5,000
 
     To Revaluation A/c
 
 
5,000
  (Creditors reduced by 5,000)
 
 
 
   
 
 
 
  Revaluation A/c Dr.
 
30,200
 
     To X’s Capital A/c
 
 
12,080
     To Y’s Capital A/c
 
 
12,080
     To Z’s Capital A/c
 
 
6,040
  (Revaluation profit distributed among old partners in their old ratio)
 
 
 
 
 
 
Partners’ Capital Accounts
Dr.      
Cr.
Particulars
X
Y
Z
T
Particulars
X
Y
Z
T
Balance c/d
77,480
75,480
31,240
20,000
Balance b/d
48,000
48,000
20,000
 
 
 
 
 
 
Bank A/c
 
 
 
20,000
   
 
 
 
T’s Current A/c
3,750
3,750
 
 
   
 
 
 
Premium for Goodwill A/c
1,250
1,250
 
 
 
 
 
 
 
General Reserve A/c
10,400
10,400
5,200
 
 
 
 
 
 
Revaluation  A/c