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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Divya, Yasmin and Fatima share profits in 11 : 7 : 2. Their Balance Sheet on 31st March, 2018 showed: Sundry Creditors ₹70,000, Public Deposits ₹1,19,000, Reserve Fund ₹90,000, Outstanding Expenses ₹10,000, Capitals – Divya ₹5,10,000, Yasmin ₹3,00,000, Fatima ₹5,00,000; and assets – Factory Building ₹7,35,000, Plant and Machinery ₹1,80,000, Furniture ₹2,60,000, Stock ₹1,45,000, Debtors ₹1,50,000 less Provision ₹30,000 (₹1,20,000), Cash at Bank ₹1,59,000. Aditya is admitted for a 1/5th share with capital ₹4,50,000 and his share of goodwill: (a) Furniture of ₹2,40,000 taken over by the old partners equally; (b) an unrecorded creditor of ₹7,000; (c) goodwill at 2.5 years’ purchase of the average profit of the last two years (2016-17 ₹2,00,000; 2017-18 ₹6,00,000); (d) Yasmin brings ₹50,000 as fresh capital; (e) Plant and Machinery revalued to ₹2,00,000, outstanding expenses reduced to ₹9,000. Prepare the Revaluation Account, Partners’ Capital Accounts and the Balance Sheet.
Revaluation Account
| Particulars (Dr.) | ₹ | Particulars (Cr.) | ₹ |
|---|---|---|---|
| To Sundry Creditors A/c (unrecorded) | 7,000 | By Plant and Machinery A/c | 20,000 |
| To Profit (Divya 7,700; Yasmin 4,900; Fatima 1,400) | 14,000 | By Outstanding Expenses A/c | 1,000 |
| Total | 21,000 | Total | 21,000 |
Partners’ Capital Accounts
| Particulars (Dr.) | Divya | Yasmin | Fatima | Aditya | Particulars (Cr.) | Divya | Yasmin | Fatima | Aditya |
|---|---|---|---|---|---|---|---|---|---|
| To Furniture A/c | 80,000 | 80,000 | 80,000 | – | By Balance b/d | 5,10,000 | 3,00,000 | 5,00,000 | – |
| To Balance c/d | 5,97,200 | 3,76,400 | 4,50,400 | 4,50,000 | By Bank A/c (Capital / fresh) | – | 50,000 | – | 4,50,000 |
| By Premium for Goodwill A/c | 1,10,000 | 70,000 | 20,000 | – | |||||
| By Reserve Fund A/c | 49,500 | 31,500 | 9,000 | – | |||||
| By Revaluation A/c | 7,700 | 4,900 | 1,400 | – | |||||
| Total | 6,77,200 | 4,56,400 | 5,30,400 | 4,50,000 | Total | 6,77,200 | 4,56,400 | 5,30,400 | 4,50,000 |
Balance Sheet as at 1st April, 2018
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Sundry Creditors (70,000 + 7,000) | 77,000 | Factory Building | 7,35,000 |
| Public Deposits | 1,19,000 | Plant and Machinery | 2,00,000 |
| Outstanding Expenses | 9,000 | Furniture (2,60,000 – 2,40,000) | 20,000 |
| Capitals: Divya 5,97,200; Yasmin 3,76,400; Fatima 4,50,400; Aditya 4,50,000 | 18,74,000 | Stock | 1,45,000 |
| Debtors (1,50,000 – 30,000) | 1,20,000 | ||
| Cash at Bank (1,59,000 + 2,00,000 + 50,000 + 4,50,000) | 8,59,000 | ||
| Total | 20,79,000 | Total | 20,79,000 |
Working Note: Average profit (last two years) = (₹2,00,000 + ₹6,00,000)/2 = ₹4,00,000; Goodwill = ₹4,00,000 × 2.5 = ₹10,00,000; Aditya’s share = ₹2,00,000, credited to old partners in 11 : 7 : 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.65 - 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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