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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
On 31st March, 2019, the Balance Sheet of A and B (sharing profits 3 : 2) showed: Creditors ₹30,000, Investment Fluctuation Fund ₹12,000, General Reserve ₹25,000, Capitals – A ₹1,60,000, B ₹1,40,000; and assets – Cash at Bank ₹20,000, Debtors ₹85,000 less Provision ₹5,000 (₹80,000), Stock ₹1,30,000, Investments ₹60,000, Furniture ₹77,000. On 1st April, 2019, C is admitted for a 1/5th share: (i) C brings ₹1,00,000 capital and ₹50,000 premium; (ii) outstanding salaries ₹2,000 to be provided; (iii) market value of investments ₹50,000; (iv) a debtor whose ₹18,000 was written off paid ₹12,000 in full settlement. Prepare the Revaluation Account, Partners’ Capital Accounts and the Balance Sheet. (CBSE 2020)
Revaluation Account
| Particulars (Dr.) | ₹ | Particulars (Cr.) | ₹ |
|---|---|---|---|
| To Outstanding Salaries A/c | 2,000 | By Bad Debts Recovered A/c | 12,000 |
| To Profit (A 6,000; B 4,000) | 10,000 | ||
| Total | 12,000 | Total | 12,000 |
Partners’ Capital Accounts
| Particulars (Dr.) | A | B | C | Particulars (Cr.) | A | B | C |
|---|---|---|---|---|---|---|---|
| To Balance c/d | 2,12,200 | 1,74,800 | 1,00,000 | By Balance b/d | 1,60,000 | 1,40,000 | – |
| By Revaluation A/c | 6,000 | 4,000 | – | ||||
| By Investment Fluctuation Fund | 1,200 | 800 | – | ||||
| By General Reserve A/c | 15,000 | 10,000 | – | ||||
| By Bank A/c (Capital) | – | – | 1,00,000 | ||||
| By Premium for Goodwill A/c | 30,000 | 20,000 | – | ||||
| Total | 2,12,200 | 1,74,800 | 1,00,000 | Total | 2,12,200 | 1,74,800 | 1,00,000 |
Balance Sheet after C’s admission
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Creditors | 30,000 | Cash (20,000 + 1,00,000 + 50,000 + 12,000) | 1,82,000 |
| Outstanding Salaries | 2,000 | Debtors (85,000 – 5,000) | 80,000 |
| Capitals: A 2,12,200; B 1,74,800; C 1,00,000 | 4,87,000 | Stock | 1,30,000 |
| Investments | 50,000 | ||
| Furniture | 77,000 | ||
| Total | 5,19,000 | Total | 5,19,000 |
Working Note: Investments fall of ₹10,000 is set off against the IFF; the balance ₹2,000 is distributed in 3 : 2 (A ₹1,200; B ₹800). General Reserve and premium are shared in 3 : 2.
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.64 - Admission of a Partner", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Admission of a Partner.
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