Question 51 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 51 Chapter 5 - Unimax Class 12 Part 1 - 2021

51. A and B were in partnership sharing profits and losses in the proportion of 2/3rd and 1/3rd respectively. Their Balance Sheet figures on 31st December, 2020 were as follows :
Cash Rs. 1000 ; Sundry Debtors Rs. 15000 ; Stock Rs. 22000 ; Plant and Machinery Rs. 4000 ; Sundry Creditors Rs. 2000 ; Bank Overdraft Rs. 15000 ; A’s Capital Rs. 15000 ; B’s Capital Rs. 10000.
On 1st January, 2021, they admitted C into partnership on the following terms :
(a) C to purchase 1/4th share of the goodwill for Rs. 3000 and to provide Rs. 10000 as capital.
(b) Profits and losses are to be shared in the proportions of 1/2 to A, 1/4 to B and 1/4 to C.
(c) Plant and Machinery is to be reduced by 10% and Rs. 500 are to be provided for estimated bad debts. Stock is to be taken at a value of Rs. 24940.
(d) By bringing in or withdrawing cash the capitals of A and B are to be made proportionate to that of C on their profits sharing basis.
Set out entries relating to the above arrangement in the firm’s Journal, give the partners’ capital accounts in tabular form and submit the opening Balance Sheet of the new firm.

The solution of Question 50 Chapter 5 - Unimax Class 12 Part 1

Journal

Date	Particulars		L.F.	Debit	Credit
	Stock a/c	Dr.		2940
	To Revaluation A/c				1500
	(Being value of assets increased)
	Revaluation a/c	Dr.		900
	To Plant and Machinery A/c				400
	To Bad debts A/c				500
	(Being value of asset decreased)
	Revaluation a/c	Dr.		2040
	To A’s Capital A/c				1360
	To B’s Capital a/c				680
	(Being Profit on revaluation transferred to old partner’s capital a/c in old ratio)

 

Date	Particulars		L.F.	Debit	Credit
	Cash a/c	Dr.		13000
	To C’s Capital A/c				10000
	To Premium A/c				3000
	(Being capital and goodwill brought by partner)
	Premium a/c	Dr.		3000
	To A’s Capital A/c				2000
	To B’s Capital A/c				1000
	(Being goodwill credited among old partners)
	Cash a/c	Dr.		1640
	To A’s Capital A/c				1640
	(Being capital brought by old partners)
	B’s Capital a/c			1680
	To Cash A/c				1680
	(Being capital withdrawn)

  Revaluation A/c

Particulars		Rs.	Particulars	Rs.
To Plant and Machinery a/c		400	By Stock	2940
To Profit on revaluation a/c
A (2 : 1)	1360
B	680
To Bad debts A/c		500
		2940		2940

  Capital Accounts

Particulars	A	B	C	Particulars	A	B	C
To Cash A/c	_	1680	_	By Balance b/d	15000	10000	_
To Balance c/d	20000	10000	10000	By Cash A/c	1640	_	10000
				By Premium A/c	2000	1000	_
				By profit on revaluation a/c	1360	680	_
	20000	11680	10000		20000	11680	10000

  Balance Sheet

Liabilities		Rs.	Assets		Rs.
Sundry Creditors		2000	Cash (1000 + 10000 + 3000 + 1640 – 1680)		13960
Capital Accounts			Stock		24940
A	20000		Plant and Machinery		3600
B	10000		Debtors	15000
C	10000		Less Provision for bad debts	500	14500
Bank Overdraft
		57000			57000

Working Note
(A) A’s sacrifice = 2/3 – 2/4 = 2/12
B’s sacrifice = 1/3 – 1/4 = 1/12
S.R. = 2 : 1
(B) Adjustments of capital
Total capital of firm = 10000 X 4/1 = Rs. 40000
A’s adjustment capital = 40000 X 2/4 = Rs. 20000
B’s adjustment capital = 40000 X 1/4 = Rs. 10000
B’s capital = Rs. 10000

 

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