Question 53 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 53 Chapter 5 - Unimax Class 12 Part 1 - 2021

53. The Balance Sheet of Krishan and Sudama, who share profits and losses in the ratio of 3 : 2, as on 31st December, 2021, is given below :

Liabilities	Amount	Assets	Amount
Sundry Creditors	15,000	Plant and Machinery	30000
Bills Payable	2,750	Patents	5,000
Capital :		Furniture	21,000
Krishan	60000	Stock	26000
Sudama	40000	Sundry Debtors	15000
General Reserve	20250	Cash	6000
		Building	25000
		Goodwill	10000
	138000		138000

On the date of the Balance Sheet, Balram is admitted as a partner with 1/4th share in profits upon the following conditions :
(a) He is to contribute proportionate capital and his share of goodwill in cash.
(b) Goodwill is to be valued at 2 years’ purchase of 4 years’ average profits, which were Rs. 10000; Rs. 9000 ; Rs. 8000 and Rs. 13000 respectively.
(c) Plant and Machinery is to be written down to Rs. 25000 and Patents written up to Rs. 9000.
A provision of 5% on debtors is required. A liability of Rs. 500 included in sundry creditors is not likely to arise.
Pass Journal entries on Balram’s admission and give the Balance Sheet after admission.

The solution of Question 53 Chapter 5 - Unimax Class 12 Part 1

Journal

Date	Particulars		L.F.	Debit	Credit
	Revaluation a/c	Dr.		5750
	To Plant and Machinery A/c				5000
	To Provision for bad debts A/c				750
	(Being value of assets decreases)
	Patents a/c	Dr.		4000
	Sundry Creditors A/c	Dr.		500
	To Revaluation a/c				4500
	(Being value of asset decreased)
	Krishan’s Capital a/c	Dr.		750
	Sudama’s Capital a/c	Dr.		500
	To revaluation a/c				1250
	General Reserve a/c	Dr.		20250
	To Krishna’s Capital a/c				12150
	To Sudama’s Capital a/c				8100
	(Being reserve transferred to old partners’ capital)

 

Date	Particulars		L.F.	Debit	Credit
	Krishna’s Capital a/c	Dr.		6000
	Sudama’s Capital A/c			4000
	To Goodwill a/c				10000
	(Being old goodwill w/o)
	Cash a/c	Dr.		43000
	To Balram’s Capital A/c				38000
	To Premium A/c				5000
	(Being Capital and goodwill brought by new partner)
	Premium a/c	Dr.		5000
	To Krishna’s Capital A/c				3000
	To Sudama’s Capital A/c				2000
	(Being goodwill transferred to old partner’s a/c)

  Revaluation A/c

Particulars	Rs.	Particulars		Rs.
To Plant and Machinery A/c	5000	By Patents a/c		4000
To Provision for doubtful debts a/c (5% on 15000)	750	By Creditors a/c
		By Loss on revaluation
		Krishna (3 : 2)	750
		Sudama	500	1250
	5750			5750

  Capital Accounts

Particulars	A	B	C	Particulars	A	B	C
To Goodwill a/c	6000	4000	_	By Balance b/d	60000	40000	_
To Loss on revaluation a/c	750	500		By Cash A/c	_	_	38000
To Balance c/d	68400	45600	38000	By Premium A/c	3000	2000	_
				By General Reserve A/c	12150	8100	_
	75150	50100	38000		75150	50100	38000

  Balance Sheet

Liabilities		Rs.	Assets		Rs.
Sundry Creditors		14500	Plant and Machinery		25000
Capital Accounts			Patents		9000
Krishna	68400		Furniture		21000
Sudama	45600		Debtors	15000
Balram	38000	152000	Less Provision for bad debts	750	14250
Bills Payable		2750	Stock		26000
			Cash (6000 + 5000 + 38000)		49000
			Building		25000
		169250			169250

Working Note

(A) Calculation of value of Balrama’s G.W. share :
4 years average profit =10000 + 9000 + 8000 + 13000/4
Total G.W. = 10000 X 2 = Rs. 20000
Balram’s Share = 1/4 X 20000 = Rs. 5000
(B) Calculation Balram’s Capital :
For 3/4 share capital contributed = Rs. 114000
For 1 share capital contributed = Rs. 114000 X 4/3
For 1/4 share capital contributed = Rs. 114000 X 4/3 X 1/4
                                                     = Rs. 38000

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