Q.No.90 | Chapter 5 – Admission of Partner | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

 

 

 

The solution of Question 90 Chapter 5 of +2-A: -

Revaluation Account

Particular		Amount	Particular		Amount
Machinery		45,000	Land and Building		70,000
Profit transferred to
Shikhar’s Capital A/c	17,500
Rohit’s Capital A/c	7,500	25,000
		70,000			70,000

 

Partners’ Capital Account

Parti culars	Shikhar	Rohit	Kavi	Partic ulars	Shikhar	Rohit	Kavi
			-	By Balance B/d	8,00,000	3,50,000	-
				By General Reserve	70,000	30,000	-
				By Workmen’s Compensation Fund	35,000	15,000	-
				By Cash A/c	-	-	4,30,000
				By Premium for Goodwill	17,500	7,500	-
To Balance c/d	9,40,000	4,10,000	4,30,000	By Premium for Goodwill	17,500	7,500	-
	9,40,000	4,10,000	4,30,000		9,40,000	4,10,000	4,30,000
To Cash A/c	37,000	23,000	-	By Balance B/d	9,40,000	4,10,000	4,30,000
				By A’s Current A/c	60,550	-	-
To Balance c/d	9,03,000	3,87,000	4,30,000
	9,40,000	4,10,000	4,30,000		9,40,000	4,10,000	4,30,000

 

Balance Sheet

Liabilities		Amount	Assets		Amount
Liability for Workmen’s	(70,000 – 1,200)	50,000	Land and Building		4,20,000
Compensation Creditors		1,50,000	Machinery	35,000
Capital A/cs:			Less: Depreciation @10%	600	34,400
Shikhar	9,03,000		Debtors	2,20,000
Rohit	3,87,000		Less: Prov. for Bad Debts	20,000	2,00,000
Kavi	4,30,000	17,20,000	Stock		3,50,000
			Cash		5,45,000
		19,20,000			19,20,000

 

Working Note:-

Old Ratio of Shikhar and Rohit = 3 : 2
Kavi’s = 1/4
Let the total share of the business = 1

Remaining share	=	1	-	1
				4

=	4 - 1
	4

=	3
		4

To Calculate to New Ratio distribute the remaining share in the old ratio of old partners’

New Ratio = Combined share of A and B x Old Ratio

Shikhar’s New Ratio	=	7	X	3
		10		4

=	12
		40

Rohit’s New Ratio	=	3	X	3
		10		4

=	9
		10

Kavi’s New Ratio	=	1	X	10
		4		10

=	10
		40

New Profit sharing Ratio between Shikhar , Rohit and Kavi = 21 : 9 : 10

Sacrificing Ratio = old Ratio – New Ratio

Shikhar’s Sacrificing Ratio	=	7	-	21
		10		40

=	28 - 2 1
	40

=	7
		40

Rohit’s Sacrificing Ratio	=	3	-	9
		10		40

=	12 - 9
	40

=	3
		40

Sacrifice Ratio of Shikhar and Rohit = 7 : 3 

Distribution of Workmen’s Compensation Fund

Shikhar's Share of Goodwill	=	50,000	X	7
				10
	=	35,000

Rohit's Share of Goodwill	=	50,000	X	3
				10
	=	15,000

Distribution of General Reserve

Shikhar's Share of Goodwill	=	1,00,000	X	7
				10
	=	70,000

 

Rohit's Share of Goodwill	=	1,00,000	X	3
				10
	=	30,000

Adjustment of Capital

Total Capital of Firm	=	Capital Brought in by Kavi X Reciprocal of his Share
Capital bought by Kavi	=	4,30,000

Total capital of Firm	=	4,30,000	X	4
				1
	=	17,20,000

Distribution of General Reserve

Shikhar’s New Capital	=	17,20,000	X	21
				40
	=	9,03,000

Rohit's Share of Goodwill	=	17,20,000	X	9
				40
	=	3,87,000

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

 

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