Question 38 Chapter 3 of Class 12 Part – 1 VK Publication

Question 38 Chapter 3 of Class 12 Part - 1 VK Publication
Question 38 Chapter 3 of Class 12 Part - 1 VK Publication


Question 35 Chapter 3 of Class 12 Part – 1


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:

Sundry Creditors28,000Cash20,000
General Reserve42,000Sundry Debtors1,20,000
Capital A/cs: Stock1,40,000
L 2,40,000 Fixed Assets1,50,000
G 1,20,0003,60,000  
 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



L . FDr. ₹Cr. ₹
2018L’s Capital A/cDr. 4,000 
April 1To G’s Capital A/c   4,000
 ( Being proportionate share of General Reserve adjusted between partners)    
 Revaluation A/cDr. 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/cDr. 50,000 
 Creditors A/cDr. 3,700 
 To Revaluation A/c   53,700
 ( Being stock increased and creditors decreased)    
 Revaluation A/cDr. 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 




To G’s Capital A/c4,000By Balance b/d2,40,0001,20,000
To Balance c/d2,54,0001,37,500By Revaluation A/C18,00013,500
   By L’s Capital A/c4,000
 2,58,0001,37,500 2,58,0001,37,500

Balance Sheet of R,S and T

(as at 1st April 2015)



Creditors 24,300Cash20,000
General Reserves 42,000Debtors1,1,800
To Profit transferred to:  Stock1,90,000
L’s capital A/c2,54,000 Fixed Assets1,35,000
G’s capital A/c1,37,5003,91,500  
  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



To fixed assets A/c15,000By Stock A/c50,000
To Provision for Doubtful Debts A/c7,200By Creditors A/c3,700
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

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

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Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms



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