Question 44 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 44 Chapter 5 - Unimax Class 12 Part 1 - 2021

44. A and B are partners sharing profits and losses in the ratio of 3 : 2. On 1st January, 2021 they admitted C into the partnership. He paid Rs. 50000 as his capital but nothing for goodwill which was valued at Rs. 40000 for the firm. He acquired 1/5th share in the profits equally both partners. It was also decided that :
(1) Land and Building be written up by Rs. 20000.
(2) Stock be written down by Rs. 3200.
(3) A provision for Rs. 1000 be created for doubtful debts ; and
(4) An amount of Rs. 1200 included in sundry creditors be written back as it is no longer payable.

Liabilities	Amount	Assets	Amount
Sundry Creditors	31200	Land and Building	60,000
General Reserve	20000	Plant and Machinery	70,000
Capital		Stock	36000
A	80,000	Sundry Debtors	20000
B	60,000	Cash at Bank	4000
		Cash in Hand	1200
	191200		191200

Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm.

The solution of Question 44 Chapter 5 - Unimax Class 12 Part 1

  Revaluation A/c

Particulars		Rs.	Particulars	Rs.
To Stock A/c		3200	By Land and Building	20000
To Provision for doubtful debts		1000	By Sundry Creditors	1200
To Profit on revaluation a/c
A (3 : 2)	10200
B	6800	17000
		21200		21200

  Capital Accounts

Particulars	M	N	R	Particulars	M	N	R
To A’s Capital A/c	_	_	4000	By Balance b/d	80000	60000	_
To B’s Capital A/c	_	_	4000	By Cash A/c	_	_	50000
To Balance c/d	106200	78800	42000	By C’s Capital A/c		4000	-
				By Profit on Revaluation a/c	10200	6800	-
				By General reserve a/c ( 3 : 2 )	12000	8000	_
	106200	78800	50000		106200	78800	50000

  Balance Sheet

Liabilities		Rs.	Assets		Rs.
Sundry Creditors		30000	Land and Building		80000
Capital Accounts			Plant and Machinery		70000
A :	106200		Stock		32800
B :	78800		Cash at bank		4000
C :	42000	227000	Cash in hand		51200
			Sundry debtors	20000
			Less provision for doubtful debts	1000	19000
		257000			257000

Working Note

A’s sacrifice = 1/2 X 1/5
                    = 1/10
B’s sacrifice = 1/2 X 1/5
                    = 1/10
S.R. = 1 : 1
A and B’s share of goodwill = 1 : 1 ( Rs. 8000)
                                            = 4000 : 4000

 

https://tutorstips.com/what-is-partnership/

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 - Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 - Accounting for Partnership Firms - Fundamentals
• Chapter No. 3 - Goodwill: Nature and Valuation
• Chapter No. 4 - Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 - Admission of a Partner
• Chapter No. 6 - Retirement/Death of a Partner
• Chapter No. 7 - Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 - Company Accounts -  Accounting for Share Capital
• Chapter No. 9 - Company Accounts - Issue of Debentures
• Chapter No. 10 - Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 - Financial Statements of a Company
• Chapter No. 2 - Financial Statement Analysis 
• Chapter No. 3 - Tools of Financial Statement Analysis - Comparative Statements and Common- Size Statements
• Chapter No. 4 - Accounting Ratios
• Chapter No. 5 - Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication