# Question 25 Chapter 4 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question No.25 Chapter No.4 - T.S. Grewal +2 Book 2019-Solution

Question 25 Chapter 4 of +2-A

25. X, Y and Z are partners sharing profits and losses in the ratio of 7 : 5 : 4. Their Balance Sheet as at 31st March, 2019 stood as:

 Liabilities Assets Capital A/c Sundry Assets 7,00,000 X 2,10,000 Y 1,50,000 Z 1,20,000 4,80,000 General Reserve 65,000 Profit and Loss A/c 25,000 Creditors 1,30,000 7,00,000 7,00,000

Partners decided that with effect from 1st April, 2019, they will share profits and losses in the ratio of 3 : 2 : 1. For this purpose, goodwill of the firm was valued at 1,50,000. The partners neither want to record the goodwill nor want to distribute the General Reserve and profits. Pass a Journal entry to record the change and prepare Balance Sheet of the constituted firm.

## The solution of Question 25 Chapter 4 of +2-A

 In the Books of _______________ Date Particulars L.F. Debit Credit 2019 April 1 X’s Capital A/c Dr 15,000 Y’s Capital A/c Dr 5,000 To Z’s Capital A/c*1 20,000 (Being adjustment make for the revaluation of assets and liabilities)

 Balance Sheetas on 01st April, 2019 Particulars Amount Particulars Amount Capital A/c*1 Sunday Assets 7,00,000 X 1,95,000 Y 1,45,000 Z 1,40,000 4,80,000 20,000 General Reserve 25,000 Profit and Loss A/c 1,30,000 7,00,000 7,00,000

Working Note :

 Old Ratio of X, & Y = 7 : 5 : 4 New Ratio of X, & Y = 3 : 2 : 1

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

 X’s Share Sacrificing/Gaining = 7 – 3 16 6
 = 21 – 24 48
 = -3 (Gain) 48

 Y’s Share Sacrificing/Gaining = 5 – 2 16 6
 = 15 – 16 48
 = -1 (Gain) 48
 Z’s Share Sacrificing/Gaining = 4 – 1 16 6
 = 12 – 8 48
 = 4 (Sacrifice) 48

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: –

 Total Amount for Adjustment = General Reserve+ P/L A/c+ Goodwill = 65,000+ 25,000+ 1,50,000 = Rs 2,40,000

 Amount to be Debited to X’s Capital = 2,40,000 X 3 48 = 15,000

 Amount to be Debited to Y’s Capital = 2,40,000 X 1 48 = 5,000

 Amount to be Debited to Z’s Capital = 2,40,000 X 4 48 = 20,000

WN *2 Balance of all partners’ Capital Account

 Partners’ Capital Accountsfor the year ended 31st March, 2019 Particulars X Y Z Particulars X Y Z To Z’s Capital A/c 15,000 5,000 – By Balance B/d 2,10,000 1,50,000 1,20,000 By X’s Capital A/c *1 – – 15,000 By Y’s Capital A/c *1 – – 5,000 To Balance c/d 1,95,000 1,45,000 1,40,000 2,10,000 1,50,000 1,40,000 2,10,000 1,50,000 1,40,000

### 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)

• 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

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