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Question 22 Chapter 4 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 22 Chapter 4 of +2-A
Question No.22 Chapter No.4 - T.S. Grewal +2 Book 2019-Solution

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Question 22 Chapter 4 of +2-A

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22. Ashish, Aakash and Amit are partners sharing profits and losses equally. The Balance Sheet as at 31st March, 2019 was as follows:

Liabilities  Assets 
Sundry Creditors  75,000Cash in Hand  24,000
General Reserve 90,000Cash at Bank 1,40,000
Capital A/c  Sundry Debtors80,000
Ashish3,00,000 Stock 1,40,000
Aakash3,00,000 Land and Building4,00,000
Amit2,75,0008,75,000 Machinery2,50,000
   Advertisement Suspense6,000
  10,40,000  10,40,000

The partners decided to share profits in the ratio of 2 : 2 : 1 w.e.f. 1st April, 2019. They also decided that:

  1. Value of stock to be reduced to 1,25,000.
  2. Value of machinery to be decreased by 10%.
  3. Land and Building to be appreciated by 62,000.
  4. Provision for Doubtful Debts to be made @ 5% on Sundry Debtors.
  5. Aakash was to carry out reconstitution of the firm at a remuneration of 10,000.
    Pass necessary Journal entries to give effect to the above.

The solution of Question 22 Chapter 4 of +2-A

In the Books of _______________
DateParticulars
L.F.DebitCredit
2019     
April 1General Reserve A/c*1Dr 90,000 
 To Ashish’s Capital A/c   30,000
 To Akash’s Capital A/c   30,000
 To Amit’s Capital A/c   30,000
 (Being General Reserve Distributed among partners)    
 Ashish’s Capital A/cDr 2,000 
 Akash’s Capital A/cDr 2,000 
 Amit’s Capital A/cDr 2,000 
 To Advertisement Suspense A/c*2   6,000
 (Being Advertisement Suspense adjusted)    
 Revaluation A/cDr 54,000 
 To Stock A/c   15,000
 To Machinery A/c   25,000
 To Provision for Doubtful Debts A/c   4,000
 To Akash’s Capital A/c   10,000
 (Being Increase in the value of the assets and decrease in the values of liabilities are transferred to revaluation a/c)    
 Land & Building A/cDr 62,000 
 To Revaluation A/c   66,000
 Being Increase in the value of the assets and decrease in the values of liabilities are transferred to revaluation a/c)    
 Revaluation A/c*3Dr 8,000 
 To Ashish’s Capital A/c   2,666
 To Akash’s Capital A/c   2,666
 To Amit’s Capital A/c   2,666
 (Being Profit on revaluation of assets and liabilities are Distributed among partners)    

Working Note : 

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WN *1 Calculation of Adjustment of General Reserve: –

Amount to be Credited to Ashish’s Capital=90,000X1
3
 =30,000  

 

Amount to be Credited to Akash’s Capital=90,000X1
3
 =30,000  

 

Amount to be Credited to Amit’s Capital=90,000X1
3
 =30,000  

 

WN *2 Calculation of Adjustment of Advertisement Suspense: –

 

Amount to be Credited to Ashish’s Capital=6,000X1
3
 =2,000  

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Amount to be Debited to Akash’s Capital=6,000X1
3
 =2,000  

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Amount to be Credited to Ashish’s Capital=6,000X1
3
 =2,000  

 

WN *3 Calculation of Adjustment of General Reserve: –

Amount to be Credited to Ashish’s Capital=8,000X1
3
 =2,666  

 

Amount to be Debited to Akash’s Capital=8,000X1
3
 =2,666  

 

Amount to be Credited to Amit’s Capital=8,000X1
3
 =2,666  

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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
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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