Question 25 Chapter 4 of +2 Part-1 – USHA Publication 12 Class Parat – 1

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:

1. Fixed assets to be depreciated by 10%.
2. A provision of 6% is made on debtors for doubtful debts.
3. Stock is valued at Rs.95,000.
4. 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 Share Sacrificing/Gaining	=	4	–	2
		7		3

	=	12 – 14
		21

	=	-2	(Gaining)
		21

Y’s Share Sacrificing/Gaining	=	3	–	1
		7		3

	=	9 – 7
		21

	=	2	(Sacrifice)
		21

In the Books of _______________
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)
(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)
(iii)	Revaluation a/c	Dr.		1,380
	To X’s Capital a/c (Rs.15,750*4/7)				1,600
	To Y’s Capital a/c (Rs.15,750*3/7)				700
	(Being profit on revaluation distributed in 4:3 ratio)
(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 Revaluation 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	17,400		Sundry Debtors:	60,000
Y	10,700	37,000	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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Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Chapter No. 1 – Accounting Not for Profit Organisations

Chapter No. 2 – Partnership Accounts – I

Chapter No. 3 – Partnership Accounts – II (Introduction)

Chapter No. 4 – Partnership Accounts – III (Goodwill: Nature and Valuation)

Chapter No. 5 – Partnership Accounts – IV (Reconstitution of Partnership)

Chapter No. 6 – Partnership Accounts – V (Admission of A Partner)

Chapter No. 7 – Partnership Accounts – VI (Retirement and Death of A Partner)

Chapter No. 8 – Company Accounts (Share Capital)

Chapter No. 9 – Company Accounts (Issue of Debentures)

Chapter No. 10 – Company Accounts (Redemption of Debentures)

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Chapter No. 1 – Financial Statements of a Company (Balance Sheet Only)

Chapter No. 2 – Techniques of Financial Statement Analysis

Chapter No. 3 – Ratio Analysis 

Chapter No. 4 – Cash Flow Statement

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