Question 24 Chapter 4 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 24 Chapter 4 of +2-A

Question 24 Chapter 4 of +2-A

24. A, B and C are sharing profits and losses in the ratio of 2 : 2 : 1. They decided to share profit w.e.f. 1st April, 2019 in the ratio of 5 : 3 : 2. They also decided not to change the values of assets and liabilities in the books of account. The book values and revised values of assets and liabilities as on the date of change were as follows:

  Book values Revised values
Machinery  2,50,000 3,00,000
Computers 2,00,000  1,75,000 
Sundry Creditors  90,000 75,000
Outstanding Expenses 15,000 25,000

Pass an adjustment entry

 

The solution of Question 24 Chapter 4 of +2-A

 

In the Books of _______________
Date Particulars
L.F. Debit Credit
2019          
April 1 A’s Capital A/c Dr   10,000  
  To B’s Capital A/c*1       50,000
  (Being adjustment make for the revaluation of assets and liabilities)        

 

 

Working Note : 

Old Ratio of X, & Y = 2 : 2 : 1 
New Ratio of X, & Y = 5 : 3 : 2

Calculate the Sacrificing or Gaining Ratio of Partners
Sacrificing or Gaining Ratio = Old Ratio – New Ratio

A’s Share Sacrificing/Gaining = 2  – 5
5 10
  = 20 – 25
  50
  = 5  (Sacrificing)
  50

 

B’s Share Sacrificing/Gaining = 2  – 2
5 10
  = 20 – 15
  50
  = 5 Sacrifice
  50
C’s Share Sacrificing/Gaining = 1  – 2
5 10
  = 10- 10
  50
  = Nil

 

Calculation of Profit or Loss on Revaluation

Revaluation A/c
Particulars
Amount Particulars
Amount
To Computers A/c 25,000 By Machinery A/c 50,000
To Outstanding expenses A/c 10,000 By Creditors A/c 15,000
To Profit on Revaluation 30,000    
  65,000     65,000

 

WN *1 Adjustment of Profit on revaluation of in the sacrificing and gaining share: –

Amount to be Credited to A’s Capital = 30,000 X 1
10
  = 3,000    

 

Amount to be Debited to B’s Capital = 30,000 X 1
10
  = 3,000    

 

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 24 Chapter 4 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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