Question 41 Chapter 5 of +2 Part-1 - USHA Publication 12 Class Part

Question 41 Chapter 5 of +2-Part-1

41. (Goodwill withdraw by Old Partner) The Balance sheet of A and B who are partners in a firm sharing profits and losses in the ratio 2:1 is as under :

Liabilities		Rs	Assets	Rs
Bills Payable		5,000	Cash	200
Creditors		60,900	Bank	1,000
Capitals			Sundry debtors	9,700
A	30,000		Stock	20,000
B	20,000	50,000	Plant	5,000
			Machinery	30,000
			Building	50,000
		1,15,900		1,15,900

They decided to admit C on the following terms :

C will receive size 1/3 share in the future profits and will contribute Rs. 15,000 as capital and Rs. 6,000 as goodwill.
Stock, plant, and machinery are to be depreciated by 10%.
A reserve for doubtful debts at %% be created on the sundry debtors.
The value of buildings is increased by 20%.
The old partners have withdrawn the amounts received as goodwill from C.
Prepare Re-valuation Account(profit and loss adjustment account ). Partners capital accounts and the balance sheet of the new firm.

The Content covered in this article:

The solution of Question 41 Chapter 5 of +2 Part-1: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

The solution of Question 41 Chapter 5 of +2 Part-1: –

Revaluation Account
Particular		Amount	Particular	Amount
To Stock		2,000	By Buildings	10,000
To Plant		500
To Machinery		3,000
To Provision for doubtful debts		485
To Profit on revaluation transferred to Capital accounts
– A	2,677
– B	1,388	4,065
		10,000		10,000

A’s capital accounts
Particular	Amount	Particular	Amount
To Bank Account	2,000	By Balance b/d	30,000
		By Premium Account	4,000
		By Revaluation Account	2,667
To Balance c/d	32,677
	36,677		36,677

B’s capital accounts
Particular	Amount	Particular	Amount
To Bank Account	2,000	By Balance b/d	20,000
		By Premium Account	2,000
		By Revaluation Account	1,338
To Balance c/d	23,338
	23,338		23,338

C’s capital accounts
Particular	Amount	Particular	Amount
	=	By Balance b/d	15,000
To Balance c/d	15,000
	23,338		23,338

Bank accounts
Particular	Amount	Particular	Amount
To Balance b/d	1,000	By A’s Capital Account	20,000
To C’s Capital Account	15,000	By B’s Capital Account	2,000
To Premium Account	6,000
		By Balance c/d	16,000
	22,000		22,000

Premium accounts
Particular	Amount	Particular	Amount
To A’s Capital Account	4,000	By Bank Account	6,000
To B’s Capital Account	2,000

	6,000		6,000

Balance Sheet
Liabilities		Amount	Assets		Amount
Bills Payable		5,000	Cash		200
Creditors		60,900	Bank		16,000
Capital			Sundry debtors	9,700
A	32,677		Less provision for Doubtful debts	485	9,215
B	21,338		Stock		18,000
C	15,000	69,015	Plant		4,500
			Machinery		27,000
			Building		60,000
		1,34,915			1,34,915