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Question 69 Chapter 5 of Class 12 Part – 1 Usha Publication
69. (Adjustment of the capital to be made by Cash ) the balance sheet of X & Y who share profits and losses in the ratio 2:1 at 31-3-2019 is as follows :
| Liabilities | Rs. | Assets | Rs. |
| Bills payable | 1,000 | Cash in hand ( Cash A/c) | 3,200 |
| Workmen’s compensation reserve | 3,200 | Trade debtors | |
| X’s capital A/c | 6,000 | Less: provision | 2,500 |
| Y’s capital A/c | 4,000 | Stock | 5,500 |
| Investments | 3,000 | ||
| 14,200 | 14,200 |
Z was admitted for 1/5th share on the following terms :
(a) That unaccounted accrued income of Rs.400 be accounted for
(b) That the market value of Investments is taken as Rs.4,500.
(c) That a claim on account of Workmen's Compensation is estimated as Rs. 1,400.
(d) That a Provision for a claim against damages to be kept for Rs. 1.000.
(e) That total capital of the new firm is agreed upon Rs.18,000.
(f) That ‘Z’ should bring the necessary amount for his share of capital and Rs1,500 for his share of goodwill.
(g) That the capital of other partners are also adjusted on the basis of their new profit sharing ratio. Adjustments should be made through cash. Prepare capital A/c & balance sheet.
We are providing a solution of Question 69 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 69 to 70 Chapter no. 5 class 12 of Usha publication. To check the direct solution of question no. 69 from the following video by using time stamps of the video.
Revaluation account
| Particulars |
Amount | Particulars | Amount | ||
|---|---|---|---|---|---|
| To claim for damages | 1,000 | By Accrued income | 400 | ||
| By investments | 1,500 | ||||
| To Profit on revaluation transferred to capital A/c |
|||||
| X | 600 | ||||
| Y | 300 | 900 | |||
| 1.900 | 1.900 | ||||
Partners’ Capital Account
| Particulars | X | Y | Z | Particulars | X | Y | Z |
|---|---|---|---|---|---|---|---|
| To Cash A/c | 600 | By Balance b/d | 6,000 | 4,000 | |||
| By revaluation A/c | 600 | 300 | |||||
| By premium ( S.F. ratio 2:1) A/c |
1,000 | 500 | |||||
| By workmen’s C.F. | 1,200 | 600 | |||||
| By Cash A/c | 800 | 3,600 | |||||
| To Balance c/d | 9,600 | 4,800 | 3,600 | ||||
| 9,600 | 5,400 | 3,600 | 9,600 | 5,400 | 3,600 |
Balance Sheet
| Liabilities |
Amount | Assets | Amount | ||
|---|---|---|---|---|---|
| Provision for Claim for damages | 1,000 | Cash in hand | 8,500 | ||
| Bills payable | 1,000 | Trade Debtors | 3,000 | ||
| Workmen's compensation Claim Payable |
1,400 | Less provision | 500 | 2,500 | |
| Capital Accounts | Investments | 4,500 | |||
| X’s capital | 9,600 | Accrued income | 400 | ||
| Y’s capital | 4,800 | Stock | 5,500 | ||
| Z’s capital | 3,600 | 18,000 | |||
| 21,400 | 21,400 | ||||
WORKING NOTES :
1. Calculation of new profit share ratio
Old ratio of X & Y = 2:1
Let total Share of the firm = 1
| Share of profit of Z | = | 1 |
| 5 |
| Remaining share (Joint share of X and Y) | = | 1 | - | 1 |
| 5 | ||||
| = | 4 | |||
| 5 |
| X‘s new share | = | 4 | x | 2 |
| 5 | 3 | |||
| = | 8 | |||
| 15 |
| Y’s new share | = | 4 | x | 1 |
| 5 | 3 | |||
| = | 4 | |||
| 15 |
| Z’s new share | = | 3 |
| 15 |
New profit sharing ratio = 8 : 4 : 3
| X | = | Rs. 18,000 | x | 8 |
| 15 | ||||
| = | Rs 9,600 |
| Y | = | Rs. 18,000 | x | 4 |
| 15 | ||||
| = | Rs 3,600 |
| Z | = | Rs. 18,000 | x | 3 |
| 15 | ||||
| = | Rs 4,800 |
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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