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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
A and B are partners; the net profit is divided 1/2 to A, 1/3 to B and 1/6 to a Reserve. They admit C on 1st April, 2024 when the Balance Sheet showed: Capitals – A ₹50,000, B ₹40,000; Reserve ₹10,000; Creditors ₹20,000; Outstanding Expenses ₹5,000; and assets – Building ₹50,000, Plant and Machinery ₹30,000, Stock ₹18,000, Debtors ₹22,000, Bank ₹5,000. Adjustments: (a) C brings ₹25,000 capital; (b) C brings ₹5,000 for a 1/5th share of goodwill; (c) stock undervalued by 10%; (d) creditors include a ₹4,000 liability settled at ₹3,200; (e) ₹2,000 (X) is bad and 50% of ₹4,000 (Y, insolvent) is doubtful. Prepare the Revaluation Account, Partners’ Capital Accounts and the Balance Sheet.
Revaluation Account
| Particulars (Dr.) | ₹ | Particulars (Cr.) | ₹ |
|---|---|---|---|
| To Bad Debts A/c | 2,000 | By Stock A/c | 2,000 |
| To Provision for Doubtful Debts A/c | 2,000 | By Creditors A/c (4,000 – 3,200) | 800 |
| By Loss (A 720; B 480) | 1,200 | ||
| Total | 4,000 | Total | 4,000 |
Partners’ Capital Accounts
| Particulars (Dr.) | A | B | C | Particulars (Cr.) | A | B | C |
|---|---|---|---|---|---|---|---|
| To Revaluation A/c (Loss) | 720 | 480 | – | By Balance b/d | 50,000 | 40,000 | – |
| To Balance c/d | 58,280 | 45,520 | 25,000 | By Reserve A/c | 6,000 | 4,000 | – |
| By Bank A/c (Capital) | – | – | 25,000 | ||||
| By Premium for Goodwill A/c | 3,000 | 2,000 | – | ||||
| Total | 59,000 | 46,000 | 25,000 | Total | 59,000 | 46,000 | 25,000 |
Balance Sheet after C’s admission
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Capitals: A 58,280; B 45,520; C 25,000 | 1,28,800 | Building | 50,000 |
| Creditors (20,000 – 800) | 19,200 | Plant and Machinery | 30,000 |
| Outstanding Expenses | 5,000 | Stock (18,000 × 100/90) | 20,000 |
| Debtors (22,000 – 2,000 – 2,000) | 18,000 | ||
| Bank (5,000 + 30,000) | 35,000 | ||
| Total | 1,53,000 | Total | 1,53,000 |
Working Note: Old ratio A : B = 1/2 : 1/3 = 3 : 2. Reserve ₹10,000 and premium ₹5,000 are shared 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.66 - 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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