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Question 30 Chapter 4 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 30 Chapter 4 of +2-A
Question No.30 Chapter No.4 - T.S. Grewal +2 Book 2019-Solution

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Question 30 Chapter 4 of +2-A

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30. Ram, Mohan, Sohan and Hari were partners in a firm sharing profits in the ratio of 4 : 3 : 2 : 1. On 1st April, 2016, their Balance Sheet was as follows:

Liabilities  Assets 
Capital A/cs:  Fixed Assets9,00,000
Ram4,00,000 Current Assets5,20,000
Mohan4,50,000   
Sohan2,50,000   
Hari2,00,000 13,00,000   
Workmen Compensation Reserve 1,20,000    
     
  14,20,000   14,20,000

From the above date, the partners decided to share the future profits in the ratio of 1 : 2 : 3 : 4. For this purpose the goodwill of the firm was valued at 1,80,000. The partners also agreed for the following:

  1. The Claim for workmen compensation has been estimated at 1,50,000.
  2. Adjust the capitals of the partners according to the new profit-sharing ratio by opening Partners’ Current Accounts.
    Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm.

The solution of Question 30 Chapter 4 of +2-A

Revaluation A/c
Particulars
Amount Particulars
Amount
To Provision for Workmen Compensation Claim A/c 30,000By Profit on Revaluation*1  30,000
   Ram’s Capital A/c12,000 
   Mohan’s Capital A/c9,000 
   Sohan’s Capital A/c6,000 
   Hari’s Capital A/c3,000 
  30,000  30,000

 

Partners’ Capital Accounts
for the year ended 31st March, 2019

Particulars

Ram Mohan Sohan Hari
To Revaluation A/c12,0009,0006,0003,000
To Ram’s Capita A/c *2  13,50040,500
To Mohan’s Capital A/c *2  4,50013,500
To Current A/c’s (B. fig)3,15,0002,05,000  
To Balance c/d
1,27,000
2,54,000
3,81,000
5,08,000
 4,54,000 4,68,000
4,05,000
5,65,000

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Partners’ Capital Accounts
for the year ended 31st March, 2019

Particulars

Ram Mohan Sohan Hari
By Balance B/d4,00,0004,50,0002,50,0002,00,000
By Sohan’s Capital A/C*213,50013,500  
By Hari’s Capital A/c*240,50040,500  
By Current A/c (B. fig)  1,55,0003,65,000
     
 4,54,000 4,68,000
4,05,000
5,65,000

 

Balance Sheet
as on 1st April, 2019
Particulars
Amount Particulars
Amount
Provision of Claim against WCF 1,50,000Fixed Assets 9,00,000
Capital A/c  Current Assets 5,20,000
Ram58,500 Current A/c  
Mohan55,500 Ram3,15,000 
Sohan58,500 Mohan2,05,0005,20,000
Hari55,50012,70,000   
Current A/c     
Sohan1,55,000    
Hari3,65,0005,20,000   
  19,40,000   19,40,000

Working Note : 

WN *1 Calculation of Total Combined Capital in New Profit Sharing Ratio: –

Amount of Ram’s Capital=30,000X4
10
 =12,000  

 

Amount of Mohan’s Capital=30,000X3
10
 =9,000  

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Amount of Sohan’s Capital=30,000X2
10
 =6,000  

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Amount of Hari’s Capital=30,000X1
10
 =3,000  

 

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

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

Ram’s Share Sacrificing/Gaining=4 –1
1010
 =4 – 1
 10
 =3 (Sacrifice)
 10

 

Mohan’s Share Sacrificing/Gaining=3 –2
1010
 =3 – 2
 10

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 =1(Sacrifice)
 10

 

Sohan’s Share Sacrificing/Gaining=2 –3
1010
 =2 – 3
 10
 =(-1)(Gain)
 10

 

Hari’s Share Sacrificing/Gaining=1 –4
1010
 =1 – 4
 10
 =(-3)(Gain)
 10
  1. Sohan will compensate Ram and Mohan in the ratio 3 : 1
  2. Hari will compensate Ram and Mohan in the ratio of 3 : 1

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DateParticulars
L.F.DebitCredit
 Sohan’s Capital A/cDr 18,000 
 Hari’s Capital A/cDr 54,000 
 To Ram’s Capital A/c*1   18,000
 To Mohan’s Capital A/c*1   54,000
 (Being Sohan and Hari compensate ram and Mohan)    

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WN *2 Calculation of Adjusted Capital

Partner’s New Capital=Total of Debit side of Capital A/c– Total of Debit side of Capital A/c
Ram’s New Capital=4,54,000– 12,000
 =4,42,000 
Mohan’s New Capital=4,68,000– 9,000
 =4,59,000 
Sohan’s New Capital=2,50,000– 24,000
 =2,26,000 
Hari’s New Capital=2,00,000– 57,000
 =1,43,000 
Total Combined Capital=12,70,000
 

WN *3 Calculation of Total Combined Capital in New Profit Sharing Ratio: –

Amount of Ram’s New Capital=12,70,000X1
10
 =1,27,000  

 

Amount of Mohan’s New Capital=12,70,000X2
10
 =2,54,000  

 

Amount of Sohan’s New Capital=12,70,000X3
10
 =3,81,000  

 

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Amount of Hari’s New Capital=12,70,000X4
10
 =5,08,000  

 

 

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)

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

 

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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