Question 44 Chapter 5 – Unimax Class 12 Part 1 – 2021

Question 44 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 44 Chapter 5 – Unimax Class 12 Part 1 – 2021

Free Accounting book Solution - Class 11 and Class 12

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

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 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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