Question 41 Chapter 5 of +2- 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 RsAssetsRs
Bills Payable 5,000Cash200
Creditors 60,900Bank1,000
Capitals  Sundry debtors9,700
A30,000 Stock20,000
B20,00050,000Plant5,000
   Machinery30,000
   Building50,000
  1,15,900 1,15,900

They decided to admit C on the following terms :

  1. 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.
  2. Stock, plant, and machinery are to be depreciated by 10%.
  3. A reserve for doubtful debts at %% be created on the sundry debtors.
  4. The value of buildings is increased by 20%.
  5. The old partners have withdrawn the amounts received as goodwill from C.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 solution of Question 41 Chapter 5 of +2 Part-1: – 

Revaluation Account
Particular
AmountParticularAmount
To Stock 2,000By 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 1,3884,065   
  10,000  10,000
A’s capital accounts
Particular
AmountParticularAmount
To Bank Account 2,000By 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
AmountParticularAmount
To Bank Account 2,000By 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
AmountParticularAmount
  =By Balance b/d 15,000
To Balance c/d 15,000   
  23,338  23,338
Bank accounts
Particular
AmountParticularAmount
To Balance b/d 1,000By A’s Capital Account 20,000
To C’s Capital Account 15,000By B’s Capital Account 2,000
To Premium Account 6,000   
   By Balance c/d 16,000
  22,000  22,000
Premium accounts
Particular
AmountParticularAmount
To A’s Capital Account 4,000By Bank Account 6,000
To B’s Capital Account 2,000   
      
  6,000  6,000
Balance Sheet
Liabilities
AmountAssetsAmount
Bills Payable 5,000Cash 200
Creditors 60,900Bank 16,000
Capital  Sundry debtors9,700 
A32,677 Less provision for
Doubtful debts
4859,215
B21,338 Stock 18,000
C15,00069,015Plant 4,500
   Machinery 27,000
   Building 60,000
  1,34,915  1,34,915

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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

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 41 Chapter 5 of +2 Part-1 - USHA Publication 12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

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