T.S. Grewal Class 12 Chapter 4 Q.67 - Admission of a Partner

Question 67

Deepika and Rajshree share profits in 3 : 2. Their Balance Sheet on 31st March, 2025 showed: Sundry Creditors ₹16,000, Public Deposits ₹61,000, Bank Overdraft ₹6,000, Outstanding Liabilities ₹2,000, Capitals – Deepika ₹48,000, Rajshree ₹40,000; and assets – Cash in Hand ₹1,200, Cash at Bank ₹2,800, Stock ₹32,000, Prepaid Insurance ₹1,000, Debtors ₹28,800 less Provision ₹800 (₹28,000), Plant and Machinery ₹48,000, Land and Building ₹50,000, Furniture ₹10,000. Anshu is admitted; new ratio 5 : 3 : 2; Anshu brings ₹32,000 capital but no goodwill (valued on his share and capital). Revaluations: Plant and Machinery ₹60,000, Stock ₹40,000, Provision for Doubtful Debts ₹4,000, Land and Building up 20%, Furniture down 10%, and outstanding salary ₹8,000 to be recorded. Prepare the Revaluation Account, Partners’ Capital Accounts and the Balance Sheet.

Solution

Revaluation Account

Particulars (Dr.)	₹	Particulars (Cr.)	₹
To Provision for Doubtful Debts A/c (4,000 – 800)	3,200	By Plant and Machinery A/c	12,000
To Furniture A/c	1,000	By Stock A/c	8,000
To Outstanding Salary A/c	8,000	By Land and Building A/c	10,000
To Profit (Deepika 10,680; Rajshree 7,120)	17,800
Total	30,000	Total	30,000

Partners’ Capital Accounts

Particulars (Dr.)	Deepika	Rajshree	Anshu	Particulars (Cr.)	Deepika	Rajshree	Anshu
To Balance c/d	60,900	49,340	32,000	By Balance b/d	48,000	40,000	–
				By Revaluation A/c	10,680	7,120	–
				By Cash A/c (Capital)	–	–	32,000
				By Anshu’s Current A/c (Goodwill)	2,220	2,220	–
Total	60,900	49,340	32,000	Total	60,900	49,340	32,000

Balance Sheet after Anshu’s admission

Liabilities	₹	Assets	₹
Outstanding Salaries	8,000	Cash in Hand	1,200
Sundry Creditors	16,000	Cash at Bank (2,800 + 32,000 – 6,000)	28,800
Public Deposits	61,000	Stock	40,000
Outstanding Liabilities	2,000	Prepaid Insurance	1,000
Capitals: Deepika 60,900; Rajshree 49,340; Anshu 32,000	1,42,240	Debtors (28,800 – 4,000)	24,800
		Plant and Machinery	60,000
		Land and Building	60,000
		Furniture	9,000
		Anshu’s Current A/c	4,440
Total	2,29,240	Total	2,29,240

Working Note: Capital before goodwill = ₹58,680 + ₹47,120 + ₹32,000 = ₹1,37,800. Capitalised value = ₹32,000 × 10/2 = ₹1,60,000; Goodwill = ₹22,200; Anshu’s share = ₹4,440 (through his Current Account), credited equally. The bank overdraft of ₹6,000 is cleared from Anshu’s capital, and Anshu’s Current Account (Dr.) appears on the assets side.