
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.
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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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