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Question 68 Chapter 5 of Class 12 Part – 1 Usha Publication
68. (Adjustment of the capital/goodwill/revaluation A/c/ partner’s capital A/c balance sheet) The following is the balance sheet as on 31st March , 2015 of A & B, who shares profit & losses in ratio 3:2
| Liabilities | Rs. | Assets | Rs. |
| Capital A/c | Plant & Machinery | 10,000 | |
| A | 10,000 | Land & Buildings | 8,000 |
| B | 10,000 | Debtors 12,000 | |
| General reserve | 15,000 | Less: provision 5,100 | 11,000 |
| Workmen’s compensation fund | 5,000 | Stock | 12,000 |
| Creditors | 10,000 | Cash | 9,000 |
| 50,000 | 50,000 |
They agreed to admit C into partnership on the following terms:
(i) Provision for doubtful debts would be increased by Rs. 2,000.
(ii) The value of land and building would be increased to Rs. 18,000.
(iii) The value of the stock would be increased by Rs. 4,000.
(iv) The liability against Workmen's Compensation Fund is determined at Rs. 2,000.
(v) C brought in as his share of goodwill Rs.10,000 in cash.
(vi) C would bring further cash as would make his capital equal to 20% of the total capital of the new firm after the above revaluation and adjustments are carried out.
Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the firm after C’s admission.
We are providing a solution of Question 68 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 67 to 68 Chapter no. 5 class 12 of Usha publication. To check the direct solution of question no. 68 from the following video by using time stamps of the video.
Revaluation account
| Particulars |
Amount | Particulars | Amount | ||
|---|---|---|---|---|---|
| To Provision for doubtful debts | 2,000 | By land & buildings | 10,000 | ||
| By Stock | 4,000 | ||||
| To Profit on revaluation transferred to capital A/c |
|||||
| A | 7,200 | ||||
| B | 4,800 | 12,000 | |||
| 14,000 | 14,000 | ||||
Partners’ Capital Account
| Particulars | A | B | C | Particulars | A | B | C |
|---|---|---|---|---|---|---|---|
| To A’s capital A/c | 6,000 | By Balance b/d | 10,000 | 10,000 | |||
| To B’s Capital A/c | 4,000 | By General Res. A/c | 9,000 | 6,000 | |||
| By revaluation A/c | 7,200 | 4,800 | |||||
| By premium A/c | 6,000 | 4,000 | |||||
| By workmen’s C.F. | 1,800 | 1,200 | |||||
| By Cash A/c | 25,000 | ||||||
| To Balance c/d | 34,000 | 26,000 | 15,000 | ||||
| 34,000 | 26,000 | 25,000 | 34,000 | 26,000 | 25,000 |
Balance Sheet
| Liabilities |
Amount | Assets | Amount | ||
|---|---|---|---|---|---|
| Workmen’s compensation Claim Payable A/c | 2,000 | Cash | 34,000 | ||
| Creditors | 10,000 | Plant & Machinery | 10,000 | ||
| Capital Accounts | Land & building | 18,000 | |||
| A | 34,000 | Debtors | 12,000 | ||
| B | 26,000 | Less provision For debts | 3,000 | 10,000 | |
| C | 15,000 | 75,000 | Stock | 16,000 | |
| 87,000 | 87,000 | ||||
WORKING NOTES :
Calculation of proportionate capital of C
Let total Share of the firm = 1
| Share of profit given to C | = | 1 |
| 5 |
| Combined share of A and B | = | 1 | - | 1 |
| 5 | ||||
| = | 4 | |||
| 5 |
Combined capitals of A and B after making allotments (34000+26000) = Rs 60,000
| C's Share | = | Rs. 60,000 | x | 5 | X | 1 |
| 4 | 5 | |||||
| = | Rs 15,000 |
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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