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Question 35 Chapter 3 of Class 12 Part – 1
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38. L and G are partners sharing profits and losses in the ratio of4:3. Their Balance Sheet as at 31st March, 2018 stood as follows:
Liabilities | Rs. | Assets | Rs. |
Sundry Creditors | 28,000 | Cash | 20,000 |
General Reserve | 42,000 | Sundry Debtors | 1,20,000 |
Capital A/cs: | Stock | 1,40,000 | |
L 2,40,000 | Fixed Assets | 1,50,000 | |
G 1,20,000 | 3,60,000 | ||
4,30,000 | 4,30,000 |
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:
(i) Fixed assets are to be depreciated by 10%.
(ii) A provision of 6% to be made on debtors for doubtful debts.
(iii) Stock be valued at Rs. 1,90,000.
(iv) An amount of Rs. 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 reserves. You are required to pass journal entries, and prepare capital accounts of the partners and the revised Balance Sheet
The solution of Question 38 Chapter 3 of Class 12 Part – 1: –
Journal Entry
Date | Particulars | L . F | Dr. ₹ | Cr. ₹ | |
2018 | L’s Capital A/c | Dr. | 4,000 | ||
April 1 | To G’s Capital A/c | 4,000 | |||
( Being proportionate share of General Reserve adjusted between partners) | |||||
Revaluation A/c | Dr. | 22,200 | |||
To Fixed Assets A/c | 15,000 | ||||
To Provision for Doubtful Debts A/c | 7,200 | ||||
( Being fixed assets decreased and provision for doubtful debts provided) | |||||
Stock A/c | Dr. | 50,000 | |||
Creditors A/c | Dr. | 3,700 | |||
To Revaluation A/c | 53,700 | ||||
( Being stock increased and creditors decreased) | |||||
Revaluation A/c | Dr. | 31,500 | |||
To L’s Capital A/c | 18,000 | ||||
To G’s Capital A/c | 13,500 | ||||
( Being profit on revaluation transferred to partners’ capital accounts) |
Partner Capital Account
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Particulars | L | G | Particulas | L | G |
To G’s Capital A/c | 4,000 | – | By Balance b/d | 2,40,000 | 1,20,000 |
To Balance c/d | 2,54,000 | 1,37,500 | By Revaluation A/C | 18,000 | 13,500 |
By L’s Capital A/c | – | 4,000 | |||
2,58,000 | 1,37,500 | 2,58,000 | 1,37,500 |
Balance Sheet of R,S and T
(as at 1st April 2015)
Liabilities | Amount | Assets | Amount | |
Creditors | 24,300 | Cash | 20,000 | |
General Reserves | 42,000 | Debtors | 1,1,800 | |
To Profit transferred to: | Stock | 1,90,000 | ||
L’s capital A/c | 2,54,000 | Fixed Assets | 1,35,000 | |
G’s capital A/c | 1,37,500 | 3,91,500 | ||
4,57,800 | 4,57,800 |
Working Notes:
1. 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
L = 4/7-2/3=(12-14)/21=(-2)/21 (Gain)
G = 3/7-1/3=(9-7)/21=2/21 (Sacrifice)
2. Adjustment of General Reserve = 42,000 x 2/21= Rs. 4,000
Revaluation Account
Particulars | Amount | Particulars | Amount |
To fixed assets A/c | 15,000 | By Stock A/c | 50,000 |
To Provision for Doubtful Debts A/c | 7,200 | By Creditors A/c | 3,700 |
To Profit Transferred to | |||
L’s Capital A/c 18,000 | |||
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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 (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- 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
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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