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

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

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)