Question 47 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 47 Chapter 5 - Unimax Class 12 Part 1 - 2021

47. The Balance Sheet of A and B as on 31st March, 2021 is given below. The profit sharing ratio is 2 : 1.

Liabilities	Amount	Assets	Amount
Sundry Creditors	8,000	Freehold Property	10000
General Reserve	12,000	Furniture	3,000
Capital Accounts		Stock	6,000
A	20000	Debtors	30000
B	15000	Cash	3000
		Profit and Loss A/c	3000
	55,000		55,000

C was admitted on the following terms :

(a)C will bring Rs. 10500 of which Rs. 4500 will be for goodwill.

(b)He will get 1/4th share of profits.

(c)40% of General reserve is to be kept as reserve for doubtful debts.

(d)Increase stock by Rs. 1500.

(e)Depreciate furniture by Rs. 500.
Show Journal entries giving effect to the aforesaid arrangements and prepare opening Balance Sheet.

The solution of Question 47 Chapter 5 - Unimax Class 12 Part 1

Journal

Date	Particulars		L.F.	Debit	Credit
	Stock a/c	Dr.		1500
	To Revaluation A/c				1500
	(Being value of assets increased)
	Revaluation a/c	Dr.		1500
	To Furniture A/c				500
	To A’s Capital A/c				667
	To B’s Capital A/c				333
	(Being value of asset decreased and profit transferred to old partners’ capital a/c in old ratio)
	A’s Capital a/c	Dr.		2000
	B’s Capital a/c	Dr.		1000
	To Profit and Loss A/c				3000
	(Being net loss transferred to old partners’ capital a/c)

 

Date	Particulars		L.F.	Debit	Credit
	General Reserve a/c	Dr.		7200
	To A’s Capital A/c				4800
	To B’s Capital A/c				2400
	(Being reserve transferred to old partners in old profit showing ratio)
	Cash a/c	Dr.		10500
	To C’s Capital A/c				6000
	To Premium A/c				4500
	(Being Capital and goodwill brought in cash by new partner)
	Premium a/c	Dr.		4500
	To A’s Capital A/c				3000
	To B’s Capital A/c				1500
	(Being goodwill credited to old partner’s a/c)

  Revaluation A/c

Particulars		Rs.	Particulars	Rs.
To Furniture		500	By Stock	1500
To Profit on revaluation a/c
A (2 : 1)	667
A (2 : 1)	333
		1500		1500

  Capital Accounts

Particulars	A	B	C	Particulars	A	B	C
To Profit and Loss a/c	2000	1000	_	By Balance b/d	20000	15000	_
To Balance c/d	26467	18233	6000	By Cash A/c	_	_	6000
				By Premium A/c	3000	12000	_
				By General Reserve A/c ( 2 : 1)	4800	2400	_
				By Profit on revaluation a/c	667	333	_
	28467	19233	6000		28467	19233	6000

Balance Sheet

Liabilities		Rs.	Assets		Rs.
Sundry Creditors		8000	Freehold Property		10000
Capital Accounts			Furniture		2500
A	26467		Cash		7500
B	18233		Debtors	30000
C	6000	50700	Less Provision for bad debts	4800	25200
		58700			58700

Working Note
(1)Old Partner’s will sacrifice in old ratio if nothing is mentioned in deed it is assumed.
(2)40% of G.R. is to be kept as reserve for doubtful debts rest of 60% i.e. Rs. 7200 is distributed among old partners in old ratio i.e. 2 : 1 (S.R.)
A : B = 4800 : 2400
(3) Profit and Loss a/c on assets side is distributed among at partners as loss in old ratio
A : B = 2 : 1
      = 2000 : 1000

 

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