Question 43 Chapter 5 – Unimax Class 12 Part 1 – 2021

Question 43 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 43 Chapter 5 – Unimax Class 12 Part 1 – 2021

Free Accounting book Solution - Class 11 and Class 12

43. A and B are partners sharing profits in the ratio of 2 : 3. On 1st January, 2021 they admitted C into partnership. C agreed to contribute Rs. 50000 as hi capital. A, B and C agree to share profits and losses in the ratio of 2 : 3 : 3 respectively. The balance Sheet of A and B as on 31st December, 2020 was as under :

Liabilities Amount Assets Amount
Sundry Creditors 50,000 Cash at Bank 6250
Capital Accounts   Stock in Hand 50,000
A 62500 Sundry Debtors 31250
B 37500 Plant 25000
    Premises 37500
  1,50,000   1,50,000

They agreed to revalue the assets as under :
Stock on hand Rs. 45000 ; Plant Rs. 18000 ; Premises Rs. 50000 ; a provision of 5% for doubtful debts is to be made. C agrees to transfer to Rs. 15000 to A’s and B’s capital accounts for goodwill from his capital account in 2 : 3.
Pass necessary journal entries, prepare revaluation A/c, capital accounts of A, B and C and a revised Balance Sheet.

The solution of Question 43 Chapter 5 – Unimax Class 12 Part 1

Particulars Rs. Particulars   Rs.
To Stock A/c 5000 By Premises A/c   12500
To Plant A/c 7000 By Loss on Revaluation A/c    
To Provision on doubtful debts A/c   A ( 2/5 X 1063) 425  
(5/100 X 31250) 1563 B ( 3/5 X 1063) ( 2 : 3 ) 638 1063
         
  13563     13563

  Capital Accounts

Particulars M N R Particulars M N    R
To Loss on revaluation A/c 425 638 By Balance b/d 62500 37500
To A’s Capital A/c 6000 By Bank A/c 50000
To B’s Capital A/c 9000 By C’s Capital A/c 6000 9000
To Balance b/d 68075 45862 35000        
               
               
  68500 46500 50000   68500 46500 50000

  Balance Sheet

Particulars   Rs. Particulars   Rs.
Sundry Creditors   50000 Plant   18000
Capital Accounts     Premises   50000
A : 68075   Cash at Bank   56250
B : 45862   Stock in hand   45000
C : 35000 148937 Debtors 31250  
      Less Provision for sacrifice debts 1563 29687
           
    198937     198937

Journal

Date Particulars   L.F. Debit Credit
  Revaluation a/c Dr.   13563  
      To Stock a/c       5000
      To Plant a/c       7000
      To Provision for bad debts a/c       1563
  (Being decrease in the value of assets)        
  Premises a/c Dr.   12500  
      To Revaluation A/c       12500
  (Being increase in the value of asset)        
  A’s Capital a/c Dr.   425  
  B’s Capital a/c Dr.   638  
      To Revaluation A/c       1063
  (Being net loss on revaluation transferred to old partners capital a/c in old ratio)        
  Bank a/c     50000  
      To C’s capital a/c       50000
  (Being capital introduced by new partners in cash)        

 

Date Particulars   L.F. Debit Credit
  C’s capital a/c Dr.   15000  
      To A’s Capital A/c       6000
      To B’s Capital A/c       9000
  (Being amount transferred from C’s capital a/c to A and B’s capital a/c on account of goodwill)        

Working Note
Old Share – New share
A’s sacrifice = Old share – new share
                    = 2/5 – 2/8
                    = 6/40
B’s sacrifice = 3/5 – 3/8
                   = 9/40
S.R. = 6 : 9 = 2 : 3
M and N will share goodwill = 2 : 3 = 6000 : 9000

 

What is Partnership – Meaning and its Types

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

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

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