Advertisement

Question 37 Chapter 3 of Class 12 Part – 1 VK Publication

Question 37 Chapter 3 of Class 12 Part - 1 VK Publication
Question 37 Chapter 3 of Class 12 Part - 1 VK Publication

Advertisement

Question 37 Chapter 3 of Class 12 Part – 1

Advertisement

37. P, Qand Rare in partnership sharing profits and losses in the ratio of 5:4:3. On 31st March, 2018, their Balance Sheet was as follows:

LiabilitiesRs.AssetsRs.
Sundry Creditors50,000Cash at bank40,000
Outstanding Expenses5,000Sundry Debtors2,10,000
General Reserve75,000Stock3,00,000
Capital Accounts: Furniture60,000
P 4,00,000 Plant and Machinery4,20,000
Q 3,00,000   
R 2,00,0009,00,000  
 10,30,000 10,30,000

It was decided that with effect from 1st April, 2018 the profit-sharing ratio will be 4:3:2. For this purpose, the following revaluations were made:
(i) Furniture to be taken at 80% of its value.
(ii) Stock to be appreciated by 20%.
(iii) Plant and Machinery be valued at Rs. 4,00,000.
(iv) Create provision for doubtful debts for Rs. 10,000 on debtors.
(v) Outstanding expenses to be increased by Rs.3,000.
Partners agreed that altered values are not to be recorded in the books and they also do not want to distribute the general reserve.
You are required to pass a single Journal entry to give effect to the above. Also prepare the revised Balance Sheet of the firm.

The solution of Question 37 Chapter 3 of Class 12 Part – 1: –

Journal Entry

Date

Particulars

L . FDr. ₹Cr. ₹
2018P’s Capital A/cDr. 2,500 
April 1To R’s Capital A/c   2,500
 ( Being proportionate share of General Reserve and profit on revaluation adjusted between partners)    

Balance Sheet

Advertisement-X

(as at 1st April 2018)

Liabilities

Amount

AssetsAmount
Creditors 50,000Cash At Bank40,000
Outstanding Expenses 5,000Sundry Debtors2,10,000
General Reserve 75,000Stock3,00,000
Capitals A/c’s:  Furniture60,000
P3,97,500 Plant and Machinery4,20,000
Q3,00,000   
R2,02,5009,00,000  
  10,30,000 10,30,000

Working Note:

1. Statement Showing Profit on Revaluation and General Reserve

ParticularsAmountAmount
Loss due to decrease in the value of furniture12,000 
Loss due to decrease in the value of plant and machinery20,000 
Loss due to Provision for doubtful Debts10,000 
Loss due to increase in Outstanding Expenses3,000(45,000)
Profit due to increase in the value of stock60,00060,000
Profit on revaluation 15,000
Add: General Reserve 75,000
  90,000

2.Partner Capital Account 

ParticularsAB

C

ParticulasABC
To R’s Capital A/c2,500By Balance b/d4,00,0003,00,0002,00,000
To Balance c/d3,97,5003,00,0002,02,500By R’s Capital A/c2,500
 4,00,0003,00,0002,02,500 4,00,0003,00,0002,02,500

3. Old Ratio of P,Q and R = 5:4:3
New Ratio of P,Q and R = 4:3:2
Sacrificing ratio = old share – new share
P = 5/12-4/9=(15-16)/36=(-1)/36 (Gain)
Q = 4/12-3/9=(12-12)/36=0/36 (Nil)
R = 3/12-2/9=(9-8)/36=1/36 (Sacrifice)
Amount to be adjusted = 90,000 x 1/36= Rs. 2,500

Thanks, Please Like and share with your friends  

Advertisement-X

Comment if you have any questions.

Also, Check out the solved question of previous Chapters: –

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

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

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

Advertisement-Y

Advertisement

Advertisement

error: Content is protected !!