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
Particular
AmountParticularAmount
To Stock ( Decrease 10% of 40,000) 4,000By 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     
– Gupta3,150    
– Mathur1,0504,200   
  10,000  10,000
Partners’ Capital Account
ParticularsGuptaMathurAggarwalParticularsGuptaMathurAggarwal
    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
(Profit)
3,1501,150 
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
Liabilities
AmountAssetsAmount
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

Thanks, Please Like and share with your friends  

Comment if you have any questions.

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

Leave a Reply

About us

About us, we are here to improve your knowledge in all financial & Business related topics and to get better carrier opportunities. The author has about 10-year Experience in tuition Business. It is very difficult to teach a large number of students with a personal touch or in a classroom. 

Animation's Resource websites

All Icons and images used on my website were downloaded from the following website please go and download free:-

close