Question 48 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 48 Chapter 5 - Unimax Class 12 Part 1 - 2021

48. A and B are partners in a firm sharing profits in the ratio of 3 : 2. On 1st January, 2021, the position of the business is as follows :

Liabilities	Amount	Assets		Amount
Sundry Creditors	10,000	Goodwill		5000
General Reserve	5,000	Stock		19000
Capital		Plant and Machinery		25000
A	30000	Debtors	20000
B	25000	Less : Provision for Doubtful debts	1000	19000
		Cash		2000
	70,000			70,000

On this date, C agrees to join the business on the following conditions :
(1)He will introduce Rs. 20000 as his capital and pay Rs. 10000 to the partners as premium for goodwill. The new profit sharing ratio is 2 : 1 : 1 for A, B and C respectively.
(2)A revaluation of the assets of the firm will be made by reducing plant and machinery to Rs. 22000 ; Stock is to be reduced by Rs. 2000 and create a provision for bad and doubtful debts at 6% on debtors.
Prepare revaluation A/c, Capital accounts and give the new Balance Sheet.

The solution of Question 48 Chapter 5 - Unimax Class 12 Part 1

  Revaluation A/c

Particulars	Rs.	Particulars		Rs.
To Machinery A/c	3000	By Loss on Revaluation A/c
To Stock A/c	2000	A (3 : 2)	3120
To Provisiaon for doubtful debts a/c	200	B	2080	5200
	5200			5200

  Capital Accounts

Particulars	A	B	C	Particulars	A	B	C
To Loss on revaluation a/c	3120	2080	_	By Balance b/d	30000	25000	_
To goodwill a/c (3 :2)	3000	2000	_	By Cash A/c	_	_	20000
To Balance c/d	30880	28920	20000	By Premium A/c	4000	6000	_
				By General Reserve A/c ( 3 : 2)	3000	2000	_
	37000	33000	20000		37000	33000	20000

  Balance Sheet

Liabilities		Rs.	Assets		Rs.
Sundry Creditors		10000	Stock		17000
Capital Accounts			Plant and Machinery		22000
A	30880		Cash		32000
B	28920		Debtors	20000
C	20000	79800	Less Provision	1200	18800
		89800			89800

Working Note

A’s Sacrifice = 3/5 – 2/4
                    = 2/20
B’s Sacrifice = 2/5 – 1/4
                    = 3/20
Sacrificing ratio = 2 : 3

 

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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