Question 42 Chapter 5 of +2- Part-

Question 42 Chapter 5 of +2-Part-1

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 RsAssetsRs
Creditors 70,000Business premises50,000
Bills Payable 5,000Fixtures2,000
General Reserve 8,000Stock40,000
Capital Account  Book Debts32,000
Gupta60,000 Bills receivable6,000
Mathur32,00092,000Cash at bank40,000
   Cash in hand5,000
  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
To Stock ( Decrease 10% of 40,000) 4,000By Business Premise
( Increase 20% of 50,000)
To Fixtures ( Decrease 10% of 20,000) 200   
To Provision for doubtful debts
(5% of 32,000)
To Profit on revaluation transferred to Capital accounts     
– Gupta3,150    
– Mathur1,0504,200   
  10,000  10,000
Partners’ Capital Account
    By Balance b/d60,00032,000
    By General Resources6,0002,000
    By Bank A/c20,000
    By Aggarwal’s A/c6,0002,000
    By Revaluation A/c
To Balance c/d 75,15037,05020,000    
 75,15037,05020,000 75,15037,05020,000

Entry for Goodwill

Aggarwal’s Current A/cDr.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
Sundry Creditors 70,000Business premises (50,000+10,000) 60,000
Bills Payable 5,000Fixtures(2,000-200) 7,500
Capital  Stock(40,000-4,000) 36,000
Gupta75,150 Book Debts32,000 
Mathur37,050 Less provision1,60030,400
Aggarwal20,0001,32,200Aggarwal’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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