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Question 27 Chapter 4 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 27 Chapter 4 of +2-A
Question No.27 Chapter No.4 - T.S. Grewal +2 Book 2019-Solution

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Question 27 Chapter 4 of +2-A

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27. A and B are partners sharing profits in the ratio of 4 : 3. Their Balance Sheet as at 31st March, 2019 stood as:

Liabilities  Assets 
Sundry Creditors  28,000Cash 20,000
Reserve  42,000Sundry Debtors1,20,000
Capital A/c  Stock 1,40,000
A2,40,000 Fixed Assets  1,50,000
B1,20,0003,60,000   
  4,30,000  2,75,000

They decided that with effect from 1st April, 2019, they will share profits and losses in the ratio of 2:1 For this purpose they decided that:

  1. Fixed Assets are to be reduced by 10%.
  2. A Provision for Doubtful Debts of 6% be made on Sundry Debtors.
    Stock be valued at 1,90,000.
  3. An amount of 3,700 included in Creditors is not likely to be claimed .
    Partners decided to record the revised values in the books. However, they do not want to disturb the Reserve. You are required to pass Journal entries, prepare Capital Accounts of Partners and the revised Balance Sheet

The solution of Question 27 Chapter 4 of +2-A

In the Books of _______________
DateParticulars
L.F.DebitCredit
2019     
 A’s Capital A/cDr 4,000 
 To B’s Capital A/c*3    4,000
 (Being adjustment make for the revaluation of assets and liabilities)    

 

Revaluation A/c
Particulars
Amount ParticularsAmount
To Fixed Assets A/c 15,000By Stock A/c50,000
To Provision for Doubtful Debts A/c 1, 20, 000 × 6 7,200By Creditors A/c3,700
To Profit on Revaluation*2 31,500  
A18,000   
B13,500   
  53,700 53,700

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Partners’ Capital Accounts
for the year ended 31st March, 2019
Particulars
ABParticulars
AB
To B’s Capital A/c4,000 By Balance B/d2,40,0001,20,000
   By Revaluation A/c18,00013,500
   By A’s Capital A/c4,000
To Balance c/d
2,54,000
1,37,500
   
 2,58,000 1,37,500
  2,58,000
1,37,500

 

Balance Sheet
as on 01st April, 2019
Particulars
Amount Particulars
Amount
Sunday Creditors28,000 Cash 20,000
 3,70024,300Sundry Debtors1,20,000 
General Reserve 42,000Less: Provision for Doubtful Debts.7, 2001,12,800
Capital A/c 44,000Stock 1,90,000
A2,54,00020,000Fixed Assets (1,50,000– 15,000) 1,35,000
B1,37,500    
  4,57,800   4,57,800

 

Working Note : 

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

A’s Share Sacrificing/Gaining=4 –2
73

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 =12 – 14
 21
 =-3 (Gain)
 21

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B’s Share Sacrificing/Gaining=3 –1
73
 =9 – 7
 21
 =2(Sacrifice)
 21

WN *1 Adjustment of General Reserve: –

Amount to be Debited to A’s Capital=42,000X2
21
 =4,000  

 

Amount to be Credited to B’s Capital=42,000X2
 1
 =4,000  

WN *2 Adjustment of Profit on revaluation : –

 

Amount to be Credited to A’s Capital=31,500X4
7
 =18,000  

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Amount to be Credited to B’s Capital=31,500X3
7
 =13,500  

 

 

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

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Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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