Question 101 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 101 Chapter 5 of +2-A

Question 101 Chapter 5 of +2-A

101. Kalpana and Kanika were partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2019, they admitted Karuna as a new partner for 1/5th share in the profits of the firm. The Balance Sheet of Kalpana and Kanika as on 1st April, 2019 was as follows:

Liabilities     Assets    
Capital A/cs:     Land and Building   2,10,000
Kalpana 4,80,000   Plant   2,70,000
Kanika 2,10,000 6,90,000 Stock   2,10,000
General Reserve   60,000 Debtors 1,32,000  
Workmen’s Compensation Fund   1,00,000 Less: Provision 12,000  
Creditors   90,000 Cash   1,30,000
    9,40,000     9,40,000

It was agreed that:
(a)the value of Land and Building will be appreciated by 20%.
(b) the value of plant be increased by 60,000.
(c) Karuna will bring 80,000 for her share of goodwill premium.
(d) the liabilities of Workmen’s Compensation Fund were determined at 60,000.
(e) Karuna will bring in cash as capital to the extent of 1/5th share of the total capital of the new firm. Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm

 

 

The solution of Question 101 Chapter 5 of +2-A: –

 

Revaluation Account
Particular
Amount Particular Amount
      Land and Building A/c   42,000
      Plant A/c   60,000
Profit on Revaluation          
Kalpana’s Capital A/c 61,200        
Kanika’s Capital A/c 40,800 1,02,000      
    1,02,000     1,02,000

 

Partners’ Capital Account
Parti
culars
Kalpana Kanika Karuna

Partic
ulars

Kalpana Kanika Karuna
        By Balance B/d 4,80,000 2,10,000
        By Cash 2,43,000
        By General Reserve 36,000 24,000
        By Workmen’s Compensation Fund 24,000 16,000

        By Premium for Goodwill 48,000 32,000
        By Revaluation 61,200 40,800
To Balance c/d 6,49,200 3,22,800 2,43,000        
  6,49,200 3,22,800 2,43,000   6,49,200 3,22,800 2,43,000

 

Balance Sheet
Liabilities
Amount Assets Amount
Creditors   90,000 Cash in Hand   4,53,000
Liability for Workmen Compensation   60,000 Debtors 1,32,000  
Capital:     Less: Provision for debtors 12,000 1,20,000
Kalpana 6,49,200   Stock   2,10,000
Kanika 3,22,800   Land and Building   2,52,000
Karuna 2,43,000 12,15,000 Plant   3,30,000
           
    13,65,000     13,65,000

 

Working Note:-

Karuna is admitted for 1/5th share

Let the total share of the business = 1

Remaining share = 1 1
5
  = 5 – 1
5
  = 4
  5

To Calculate to New Ratio distribute the remaining share in the old ratio of old partners’

New Ratio = Combined share of Kalpana and Kanika X Old Ratio


Kalpana’s Share = 4 X 3
5 5
  = 12
  25

 

Kanika’s Share = 4 X 2
5 5
  = 8
  25

New Profit sharing Ratio = 12 : 8 : 5

Calculation of Sacrificing Ratio

Kalpana’s Share = 3 12
5 15
  = 15 -12
25
  = 3
  25

 

Kanika = 2 8
5 25
  = 10- 8
25
  = 2
  25

 

Sacrificing Ratio = 3 : 2

Calculate of Karuna’s Capital

 

Adjusted Capital of Kalpana = 6,49,200
Adjusted Capital of Kanika = 3,22,800
Total Adjusted Capital = 9,72,000 (6,49,200+3,22,800)

Karuna’s Capital = Total Adjusted Capital X Karna’s Profit Share X Reciprocal of combined new Share of Old Partner

Karuna’s Share of Goodwill = 9,72,000 x 1 x 5
5 4
  = 2,43,000        

 

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

  • Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
  • Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
  • Chapter No. 3 – Goodwill: Nature and Valuation
  • Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
  • Chapter No. 5 – Admission of a Partner
  • Chapter No. 6 – Retirement/Death of a Partner
  • Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

  • Chapter No. 1 – Financial Statements of a Company
  • Chapter No. 2 – Financial Statement Analysis 
  • Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
  • Chapter No. 4 – Accounting Ratios
  • Chapter No. 5 – Cash Flow Statement

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 101 Chapter 5 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.