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Question 52 Chapter 5 of Class 12 Part – 1 Usha Publication
52. (Hidden Goodwill)Deepika & Rajshree are partners in the firm sharing profits & losses in ratio 3:2. On 31st March 2019 their balance sheet was as under :
| Liabilities | Rs | Assets | Rs | ||
| Sundry creditors | 16,000 | Cash in hand | 1,200 | ||
| Public Deposits | 61,000 | Cash at Bank | 2,800 | ||
| Banks overdrafts | 6,000 | Stock | 32,000 | ||
| Outstanding liabilities | 2,000 | Prepaid insurance | 1,000 | ||
| Capital Accounts | Sundry debtors | 28,800 | |||
| Deepika | 48,000 | Less reserve for doubtful debts | 800 | 28,000 | |
| Rajshree | 40,000 | 88,000 | Plant and machinery | 48,000 | |
| Land & Building | 50,000 | ||||
| Furniture | 10,000 | ||||
| 1,73,000 | 1,73,000 |
On the above date, the partners decide to admit Anshu as a partner on the following
Terms :
(i) The new profit sharing ratio of Deepika Rajshree and Anshu will be 5: 3:2 respectively.
(ii) Anshu will bring Rs. 32,000 as his capital.
(iii)Anshu is unable to bring in cash his share of goodwill. They further decided to calculate goodwill on the basis of Anshu's share in the profits and the capital contribution made by him to the firm.
(iv) Plant and machinery is to be valued at Rs. 60,000; stock at Rs. 40,000 and Reserve for doubtful debts is to be maintained at Rs. 4,000. Value of land and building has appreciated by 20% furniture has depreciated by 10%.
(v) There is an additional liability of Rs. 8,000 being outstanding salary payable to employees of the firm. This liability is not included in the outstanding liabilities stated in the above balance sheet. Partners decide to show this liability in the books of accounts of the reconstituted new firm.
Prepare revaluation account, partners' capital accounts, and the balance sheet of Deepika, Rajshree, and Anshu.
We are providing a solution of Question 52 Chapter 5 of Class 12 Part – 1 Usha Publication in two formats. one is in Video format and another is in article format. Check out both formats as follows:
The video consists solution of question numbers from 51 to 52 Chapter no. 5 class 12 of Usha publication. To check the direct solution of question no. 52 from the following video by using time stamps of the video.
Revaluation Account
| Particulars |
Amount | Particulars | Amount | ||
|---|---|---|---|---|---|
| To Provision for doubtful debts | 3,200 | By Plant & Machinery | 12,000 | ||
| To Furniture A/c | 1,000 | By Stock | 8,000 | ||
| To Outstanding salary A/c | 8,000 | By Land & Building | 10,000 | ||
| To profit on Revaluation | |||||
| - Deepika 3/5 | 10,680 | ||||
| - Rajshree 2/5 | 7,120 | 17,800 | |||
| 30,000 | 30,000 | ||||
Partners’ Capital Account
| Particulars | Deepika | Rajshree | Anshu | Particulars | Deepika | Rajshree | Anshu |
|---|---|---|---|---|---|---|---|
| By Balance b/d | 48,000 | 40,000 | |||||
| By Bank A/c | 32,000 | ||||||
| By Anshu’s current A/c (profit) |
2,220 | 2,220 | |||||
| By Revaluation A/c | 10,680 | 7,120 | |||||
| To Balance c/d | 60,900 | 49,340 | 32,000 | ||||
| 60,900 | 49,340 | 32,000 | 60,900 | 49,340 | 32,000 |
Balance Sheet
| Liabilities |
Amount | Assets | Amount | ||
|---|---|---|---|---|---|
| Sundry Creditors | 16,000 | Cash in hand | 1,200 | ||
| Public Deposits | 61,000 | Cash at Bank | 34,800 | ||
| Banks overdrafts | 6,000 | Stock | 40,000 | ||
| Outstanding liabilities | 2,000 | Prepaid insurance | 1,000 | ||
| Outstanding salary | 8,000 | Sundry debtors | 28,800 | ||
| Capital Accounts | Less reserve for doubtful debts |
4,000 | 24,800 | ||
| Deepika | 60,900 | Plant and machinery | 60,000 | ||
| Rajshree | 49,340 | Land & Building | 60,000 | ||
| Anshu | 32,000 | 1,42,240 | Furniture | 9,000 | |
| Anshu current A/C | 4,440 | ||||
| 2,35,240 | 2,35,240 | ||||
WORKING NOTES :
(i) Calculation of Sacrificing ratio
| Deepika | : | Rajshree | : | Anshu | ||
| Old ratio | = | 3 | : | 2 | : | - |
| New ratio | = | 5 | : | 3 | : | 2 |
Partner’s sacrifice = old Share - new share
| Deepika’s sacrifice | = | 3 | - | 5 |
| 5 | 10 | |||
| = | 1 | |||
| 10 |
| Rajshree’s sacrifice | = | 2 | - | 3 |
| 5 | 10 | |||
| = | 1 | |||
| 10 |
SACRIFICING RATIO = 1 : 1
(ii) calculation of Goodwill
Calculate total capital of firm after Anshu’s Admission:
= New Partners’ Capital X Reverse of his share
= 32,000 X 10/2 = ₹ 1,60,000
Calculation of combined capital of all partners without share of goodwill but after all adjustments:-
| Deepika | = | 58,680 |
| Rajshree | = | 47,120 |
| Anshu | = | 32,000 |
| = | 1,37,800 |
Calculation of Goodwill:-
= Total Capital of firm - Combined Capital of firm
= ₹ 1,60,000 - ₹ 1,37,800
= ₹ 22,200
Anshu's share of goodwill
= ₹ 22,200 x 2/10
= ₹ 4,440
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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