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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
X and Y share profits in 3 : 2. Their Balance Sheet as at 31st March, 2022 showed: Creditors ₹56,000, General Reserve ₹14,000, Capitals – X ₹1,19,000, Y ₹1,12,000; and assets – Plant and Machinery ₹70,000, Buildings ₹98,000, Stock ₹21,000, Debtors ₹42,000 less Provision ₹7,000 (₹35,000), Cash ₹77,000. Z is admitted for a 1/6th share: (i) Z brings ₹56,000 capital but nothing for goodwill; (ii) goodwill valued at ₹84,000; (iii) Plant and Machinery undervalued by ₹14,000, Building to ₹1,09,000; (iv) all debtors good; (v) capitals of X and Y adjusted on the basis of Z’s share through Current Accounts. Prepare the Revaluation Account and Partners’ Capital Accounts. (CBSE Sample Paper 2023)
Revaluation Account
| Particulars (Dr.) | ₹ | Particulars (Cr.) | ₹ |
|---|---|---|---|
| To Profit (X 19,200; Y 12,800) | 32,000 | By Plant and Machinery A/c | 14,000 |
| By Building A/c | 11,000 | ||
| By Provision for Doubtful Debts A/c | 7,000 | ||
| Total | 32,000 | Total | 32,000 |
Partners’ Capital Accounts
| Particulars (Dr.) | X | Y | Z | Particulars (Cr.) | X | Y | Z |
|---|---|---|---|---|---|---|---|
| To Y’s Current A/c | – | 24,000 | – | By Balance b/d | 1,19,000 | 1,12,000 | – |
| To Balance c/d | 1,68,000 | 1,12,000 | 56,000 | By Revaluation A/c | 19,200 | 12,800 | – |
| By General Reserve A/c | 8,400 | 5,600 | – | ||||
| By Cash A/c (Capital) | – | – | 56,000 | ||||
| By Z’s Current A/c (Goodwill) | 8,400 | 5,600 | – | ||||
| By X’s Current A/c (Capital adj.) | 13,000 | – | – | ||||
| Total | 1,68,000 | 1,36,000 | 56,000 | Total | 1,68,000 | 1,36,000 | 56,000 |
Working Notes: Z’s goodwill = ₹84,000 × 1/6 = ₹14,000, adjusted through Z’s Current Account and credited to X and Y in 3 : 2 (X ₹8,400; Y ₹5,600). New total capital = ₹56,000 × 6 = ₹3,36,000 → X ₹1,68,000, Y ₹1,12,000, Z ₹56,000; the differences are adjusted through Current Accounts (X brings in ₹13,000; Y withdraws ₹24,000).
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.69 - 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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