Question 25 Chapter 4 of +2-Part-1
25. (Journal/ Capital a/c/ Balance sheet) X and Y are partners sharing profits in 4:3 ratio. The balance sheet as on 31st March 2018 was as follows:
| Liabilities | Amount | Assets | Amount | |
| Reserves | 21,000 | Fixed assets | 75,000 | |
| Sundry creditors | 14,000 | Sundry Debtors | 60,000 | |
| Capital A/c | Cash in hand | 10,000 | ||
| X | 1,20,000 | Stock | 70,000 | |
| Y | 60,000 | 1,80,000 | ||
| 2,15,000 | 2,15,000 | |||
They decided that with effect from 1st April 2018, they will share profits and losses in the ratio of 2:1. For this purpose, they decided that:
- Fixed assets to be depreciated by 10%.
- A provision of 6% is made on debtors for doubtful debts.
- Stock is valued at Rs.95,000.
- An amount of Rs.1,850 included in creditors is not likely to be claimed.
Partners decide to record the revised values in the books. However, they do not want to disturb the reserve. You are required to pass the journal entries, prepare the capital accounts of partners and the revised balance sheet.
The solution of Question 25 Chapter 4 of +2 Part-1: –
| Old Ratio of X & Y | = | 4: 3 |
| New Ratio of X & Y | = | 2: 1 |
Calculate the Sacrificing or Gaining Ratio of Partners
Sacrificing or Gaining Ratio = Old Ratio – New Ratio
| X’s Sacrificing/Gaining Share | = | 4 | – | 2 |
| 7 | 3 |
| = | 12 – 14 | |
| 21 |
| = | -2 | (Gain) | |
| 21 |
| Y’s Sacrificing/Gaining Share | = | 3 | – | 1 |
| 7 | 3 |
| = | 9 – 7 | |
| 21 |
| = | 2 | (Sacrifice) | |
| 21 |
| Journal | |||||
| Date | Particulars |
L.F. | Debit | Credit | |
| (i) | Revaluation a/c | Dr. | 11,100 | ||
| To Provision for doubtful debts a/c | 7,500 | ||||
| To Fixed assets a/c | 3,600 | ||||
| (Being assets revalued in the books) | |||||
| (ii) | Stock a/c | Dr. | 25,000 | ||
| Sundry Creditors a/c | Dr. | 1,850 | |||
| To Revaluation a/c | 26,850 | ||||
| (Being revaluation of assets and liabilities recoded in the books) | |||||
| (iii) | Revaluation a/c | Dr. | 15750 | ||
| To X’s Capital a/c (Rs.15,750*4/7) | 9000 | ||||
| To Y’s Capital a/c (Rs.15,750*3/7) | 6750 | ||||
| (Being profit on revaluation distributed among partner in old profit-sharing ratio i.e., 4 : 3) | |||||
| (iv) | X’s Capital a/c (21,000*2/21) | Dr. | 2,000 | ||
| To Y’s Capital a/c | 2,000 | ||||
| (Being adjustment in the capital for reserve due to change in profit ratio) | |||||
| Partners’ Capital Accounts |
|||||||
| Particular |
X | Y | Particular | X | Y | ||
| To Y’s Capital a/c | 2,000 | – | By Balance B/d | 1,20,000 | 60,000 | ||
| By Revaluation a/c | 9,000 | 6,750 | |||||
| By X’s Capital A/c | – | 2,000 | |||||
| To Balance c/d | 1,27,000 | 68,750 | |||||
| 1,29,000 | 68,750 | 1,29,000 | 68,750 | ||||
| Balance Sheets |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Capital A/c | Fixed Assets | 67,500 | |||
| X | 1,27,000 | Sundry Debtors: | 60,000 | ||
| Y | 68,750 | 1,98,750 | Less: Provision for D/D | 3,600 | 56,400 |
| Reserve | 21,000 | Stock | 95,000 | ||
| Sundry Creditors | 12,150 | Cash in hand | 10,000 | ||
| 2,28,900 | 2,28,900 | ||||
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Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)
Chapter No. 2 – Partnership Accounts – I (Introduction)
Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
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- Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
- Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
- Chapter No. 3 – Partnership Accounts – II (Goodwill)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
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