Question 42 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 42 Chapter 5 of +2- Part-

Question 42 Chapter 5 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

42. Revaluation A/c/Partner‘s Cap A/c/B/S) Thr following is the balance sheet of Gupta and mathur. They share profit and losses in the proportion of three fourth and one fourth :

Liabilities   Rs Assets Rs
Creditors   70,000 Business premises 50,000
Bills Payable   5,000 Fixtures 2,000
General Reserve   8,000 Stock 40,000
Capital Account     Book Debts 32,000
Gupta 60,000   Bills receivable 6,000
Mathur 32,000 92,000 Cash at bank 40,000
      Cash in hand 5,000
    1,75,000   1,75,000

They admit Aggarwal into partnership on the following terms:
(i)That Aggarwal brings Rs. 20,000 as his capital for the fifth share in future profits.
(ii) That Goodwill of the firm is valued at Rs. 40,000.
(iii) That the value of business premises be appreciated by 20%.
(iv) That the stock and fixtures be reduced by 10% each and a 5% reserve for doubtful debts be created on book debts.
Prepare revaluation account, partner’s capital accounts, and also the opening balance sheet of the new firm.

The solution of Question 42 Chapter 5 of +2 Part-1: – 

Revaluation Account
Particular
Amount Particular Amount
To Stock ( Decrease 10% of 40,000)   4,000 By Business Premise
( Increase 20% of 50,000)
  10,000
To Fixtures ( Decrease 10% of 20,000)   200      
To Provision for doubtful debts
(5% of 32,000)
  1,600      
To Profit on revaluation transferred to Capital accounts          
– Gupta 3,150        
– Mathur 1,050 4,200      
    10,000     10,000
Partners’ Capital Account
Particulars Gupta Mathur Aggarwal Particulars Gupta Mathur Aggarwal
        By Balance b/d 60,000 32,000
        By General Resources 6,000 2,000
        By Bank A/c 20,000
        By Aggarwal’s A/c 6,000 2,000
        By Revaluation A/c
(Profit)
3,150 1,150  
To Balance c/d 75,150 37,050 20,000        
  75,150 37,050 20,000   75,150 37,050 20,000

Entry for Goodwill

Aggarwal’s Current A/c Dr. 8,000  
To Gupta’s Capital A/c     6,000
To Mathur’s Capital A/c     2,000

NOTE: (Sacrificing ratio remains same as the old ratio in the absence of any information specific)

Balance Sheet
Liabilities
Amount Assets Amount
Sundry Creditors   70,000 Business premises (50,000+10,000)   60,000
Bills Payable   5,000 Fixtures(2,000-200)   7,500
Capital     Stock(40,000-4,000)   36,000
Gupta 75,150   Book Debts 32,000  
Mathur 37,050   Less provision 1,600 30,400
Aggarwal 20,000 1,32,200 Aggarwal’s Current A/c   8,000
      Bills receivable   6,000
      Cash at bank   60,000
      Cash in hand   5,000
    2,07,200     2,07,200

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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 42 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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