Loading Tutorstips...
✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Rajesh and Ravi share profits in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2024 showed: Creditors ₹38,500, Outstanding Rent ₹4,000, Capitals – Rajesh ₹29,000, Ravi ₹15,000; and assets – Cash ₹2,000, Stock ₹15,000, Prepaid Insurance ₹1,500, Debtors ₹9,400 less Provision ₹400 (₹9,000), Machinery ₹19,000, Building ₹35,000, Furniture ₹5,000. Raman is admitted with a capital of ₹16,000; the new ratio is 5 : 3 : 2. Raman cannot bring goodwill in cash, so goodwill is valued on the basis of his share and capital. Revaluations: (a) Stock down 5%; (b) Provision for Doubtful Debts ₹500; (c) Furniture down 10%; (d) Building valued at ₹40,000. Prepare the necessary Ledger Accounts and the Balance Sheet.
Revaluation Account
| Particulars (Dr.) | ₹ | Particulars (Cr.) | ₹ |
|---|---|---|---|
| To Stock A/c | 750 | By Building A/c | 5,000 |
| To Provision for Doubtful Debts A/c | 100 | ||
| To Furniture A/c | 500 | ||
| To Profit (Rajesh 2,190; Ravi 1,460) | 3,650 | ||
| Total | 5,000 | Total | 5,000 |
Partners’ Capital Accounts
| Particulars (Dr.) | Rajesh | Ravi | Raman | Particulars (Cr.) | Rajesh | Ravi | Raman |
|---|---|---|---|---|---|---|---|
| To Rajesh’s / Ravi’s Capital (Goodwill) | – | – | 3,270 | By Balance b/d | 29,000 | 15,000 | – |
| To Balance c/d | 32,825 | 18,095 | 12,730 | By Cash A/c (Capital) | – | – | 16,000 |
| By Revaluation A/c | 2,190 | 1,460 | – | ||||
| By Raman’s Capital (Goodwill) | 1,635 | 1,635 | – | ||||
| Total | 32,825 | 18,095 | 16,000 | Total | 32,825 | 18,095 | 16,000 |
Balance Sheet after Raman’s admission
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Creditors | 38,500 | Cash (2,000 + 16,000) | 18,000 |
| Outstanding Rent | 4,000 | Stock (15,000 – 750) | 14,250 |
| Capitals: Rajesh 32,825; Ravi 18,095; Raman 12,730 | 63,650 | Prepaid Insurance | 1,500 |
| Debtors (9,400 – 500) | 8,900 | ||
| Machinery | 19,000 | ||
| Building (35,000 + 5,000) | 40,000 | ||
| Furniture (5,000 – 500) | 4,500 | ||
| Total | 1,06,150 | Total | 1,06,150 |
Working Note: Capital before goodwill = ₹31,190 + ₹16,460 + ₹16,000 = ₹63,650. Capitalised value (on Raman’s share) = ₹16,000 × 10/2 = ₹80,000. Goodwill = ₹16,350; Raman’s share = ₹16,350 × 2/10 = ₹3,270, credited to Rajesh and Ravi equally (₹1,635 each).
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.63 - 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.63 - Admission of a Partner" instantly.