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Question 44 Chapter 5 – Unimax Class 12 Part 1 – 2021
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44. A and B are partners sharing profits and losses in the ratio of 3 : 2. On 1st January, 2021 they admitted C into the partnership. He paid Rs. 50000 as his capital but nothing for goodwill which was valued at Rs. 40000 for the firm. He acquired 1/5th share in the profits equally both partners. It was also decided that :
(1) Land and Building be written up by Rs. 20000.
(2) Stock be written down by Rs. 3200.
(3) A provision for Rs. 1000 be created for doubtful debts ; and
(4) An amount of Rs. 1200 included in sundry creditors be written back as it is no longer payable.
| Liabilities | Amount | Assets | Amount |
| Sundry Creditors | 31200 | Land and Building | 60,000 |
| General Reserve | 20000 | Plant and Machinery | 70,000 |
| Capital | Stock | 36000 | |
| A | 80,000 | Sundry Debtors | 20000 |
| B | 60,000 | Cash at Bank | 4000 |
| Cash in Hand | 1200 | ||
| 191200 | 191200 |
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm.
The solution of Question 44 Chapter 5 – Unimax Class 12 Part 1
Revaluation A/c
| Particulars | Rs. | Particulars | Rs. | |
| To Stock A/c | 3200 | By Land and Building | 20000 | |
| To Provision for doubtful debts | 1000 | By Sundry Creditors | 1200 | |
| To Profit on revaluation a/c | ||||
| A (3 : 2) | 10200 | |||
| B | 6800 | 17000 | ||
| 21200 | 21200 |
Capital Accounts
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| Particulars | M | N | R | Particulars | M | N | R |
| To A’s Capital A/c | _ | _ | 4000 | By Balance b/d | 80000 | 60000 | _ |
| To B’s Capital A/c | _ | _ | 4000 | By Cash A/c | _ | _ | 50000 |
| To Balance c/d | 106200 | 78800 | 42000 | By C’s Capital A/c | 4000 | – | |
| By Profit on Revaluation a/c | 10200 | 6800 | – | ||||
| By General reserve a/c ( 3 : 2 ) | 12000 | 8000 | _ | ||||
| 106200 | 78800 | 50000 | 106200 | 78800 | 50000 |
Balance Sheet
| Liabilities | Rs. | Assets | Rs. | ||
| Sundry Creditors | 30000 | Land and Building | 80000 | ||
| Capital Accounts | Plant and Machinery | 70000 | |||
| A : | 106200 | Stock | 32800 | ||
| B : | 78800 | Cash at bank | 4000 | ||
| C : | 42000 | 227000 | Cash in hand | 51200 | |
| Sundry debtors | 20000 | ||||
| Less provision for doubtful debts | 1000 | 19000 | |||
| 257000 | 257000 |
Working Note
A’s sacrifice = 1/2 X 1/5
= 1/10
B’s sacrifice = 1/2 X 1/5
= 1/10
S.R. = 1 : 1
A and B’s share of goodwill = 1 : 1 ( Rs. 8000)
= 4000 : 4000
What is Partnership – Meaning and Its 4 Types
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
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- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication