Question 39 Chapter 6 - Unimax Class 12 Part 1 - 2021

Question 39 Chapter 6 – Unimax Class 12 Part 1 – 2021

Table of Contents

The solution of Question 39 Chapter 6 – Unimax Class 12 Part 1: –

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

39. Lal, Bal and Pal were partners, sharing profitsin the ratio of 2:2:1 respectively. Their summarized balance sheet was as follows:

Liabilities	Amount	Assets	Amount
Capital a/c		Goodwill	40,000
Lal	1,40,000	Fixed assets	1,80,000
Bal	1,00,000	Debtors	70,000
Pal	60,000	Stock	90,000
Current Liabilities	92,000	Cash at Bank	12,000

Pal retired and his interest in respect of Goodwill and capital valued at ₹80000 was purchased by Lal and Bal by bringing in cash in the proportion in which they share profits. Bsl’s son Dev was admitted to a partnership on the following terms:

Dev would bring ₹ 100000 in the business for one-fourth share in profits, to be surrendered by Bal.
Goodwill is to be written off and fixed assets to be revalued at ₹240000 immediately before his admission to partnership.
Capitals of Lal and Bal to be adjusted according to new profit sharing ratio taking Dev’s
capital as base.

Prepare capital a/c, Bank a/c, Balance sheet of the reconstituted firm.

The solution of Question 39 Chapter 6 – Unimax Class 12 Part 1: –

Revaluation account

Particulars		Rs.	Particulars	Rs.
To profit on revaluation			By fixed assets a/c	60,000
Lal	30,000
Bal	30,000	60,000


		60,000		60,000

Partners Capital accounts

Particulars	Lal	Bal	Pal	Dev	Particulars	Arthur	Baldwin	Curtis
To Pal	10,000	10,000			By balance b/d	1,40,000	1,00,000	60000
To bank a/c			80,000		By Lal			10000
To goodwill a/c	20,000	20,000			By Bal			10000
To bank a/c		40,000			By bank	40,000	40,000
To balance c/d	2,00,000			1,00,000	By profit on rev.	30,000	30,000
					By bank a/c				1,00,000
					By bank a/c	20,000

	2,30,000	1,70,000	80,000	1,00,000		2,30,000	1,70,000	80,000	1,00,000

Balance sheet

Liabilities		Amount	Assets	Amount
Capitals			Fixed assets	240000
Lal	2,00,000		Debtors	70000
Bal	1,00,000		Stock	90000
Pal	1,00,000	4,00,000	Bank	12000
Current liabilities		92,000	Cash (80000+100000+20000-80000 -40000)	80000

		4,92,000		4,92,000

WORKING NOTE:

1) Pal’s interest includes ₹80000 (₹60000 for capital and ₹20000for goodwill which is to be paid by Lal and Bal in 1:1) and paid by bringing cash ₹80000by Lal and Bal in 1:1Arthur =5/8 – 4/9= 45/72-32/72 = 13/72.
2) Revaluation and goodwill has been written off after retirement.
3) Total capital of firm =100000×4/1.
4) Dev’s capital base=₹ 400000 to be divided in ratio 2:1:1.