Loading Tutorstips...
✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
X and Y share profits in the ratio of 5 : 3. Their Balance Sheet as at 31st March, 2024 showed: Creditors ₹15,000, Employees’ Provident Fund ₹10,000, Workmen Compensation Reserve ₹5,800, Capitals – X ₹70,000, Y ₹31,000; and assets – Cash at Bank ₹5,000, Debtors ₹20,000 less Provision ₹600 (₹19,400), Stock ₹25,000, Fixed Assets ₹80,000, Profit & Loss A/c (Dr.) ₹2,400. Z is admitted for a 1/8th share on 1st April, 2024, bringing ₹20,000 capital and ₹12,000 goodwill in cash. Z acquires his share from X. Revaluations: (a) EPF liability increased by ₹5,000; (b) all debtors good; (c) stock includes ₹3,000 obsolete items; (d) creditors to be paid ₹1,000 more; (e) fixed assets revalued at ₹70,000. Prepare the necessary accounts and the new Balance Sheet, and calculate the new ratio.
Revaluation Account
| Particulars (Dr.) | ₹ | Particulars (Cr.) | ₹ |
|---|---|---|---|
| To Stock A/c | 3,000 | By Provision for Doubtful Debts A/c | 600 |
| To Creditors A/c | 1,000 | By Loss (X 11,500; Y 6,900) | 18,400 |
| To Fixed Assets A/c | 10,000 | ||
| To Employees’ Provident Fund A/c | 5,000 | ||
| Total | 19,000 | Total | 19,000 |
Partners’ Capital Accounts
| Particulars (Dr.) | X | Y | Z | Particulars (Cr.) | X | Y | Z |
|---|---|---|---|---|---|---|---|
| To Revaluation A/c (Loss) | 11,500 | 6,900 | – | By Balance b/d | 70,000 | 31,000 | – |
| To Profit & Loss A/c | 1,500 | 900 | – | By Workmen Compensation Reserve | 3,625 | 2,175 | – |
| To Balance c/d | 72,625 | 25,375 | 20,000 | By Cash A/c (Capital) | – | – | 20,000 |
| By Premium for Goodwill A/c | 12,000 | – | – | ||||
| Total | 85,625 | 33,175 | 20,000 | Total | 85,625 | 33,175 | 20,000 |
Balance Sheet after Z’s admission
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Creditors (15,000 + 1,000) | 16,000 | Cash at Bank (5,000 + 20,000 + 12,000) | 37,000 |
| Employees’ Provident Fund (10,000 + 5,000) | 15,000 | Sundry Debtors | 20,000 |
| Capitals: X 72,625; Y 25,375; Z 20,000 | 1,18,000 | Stock (25,000 – 3,000) | 22,000 |
| Fixed Assets (80,000 – 10,000) | 70,000 | ||
| Total | 1,49,000 | Total | 1,49,000 |
Working Notes: WCR (no claim) shared in 5 : 3 (X ₹3,625; Y ₹2,175). Z’s premium of ₹12,000 goes entirely to X, as Z takes his whole share from X. New ratio: X = 5/8 – 1/8 = 4/8; Y = 3/8; Z = 1/8 → 4 : 3 : 1.
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.
This guide covers "T.S. Grewal Class 12 Chapter 4 Q.62 - Admission of a Partner", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Admission of a Partner.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
You can take our custom-built interactive practice quiz directly on this page to test your understanding of "T.S. Grewal Class 12 Chapter 4 Q.62 - Admission of a Partner" instantly.