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Question 45 A Chapter 5 of +2-Part-1
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45 A. (HOTS/MEMORANDUM revaluation Account) A and B are carrying on business in partnership as chemists sharing profits and losses in the ratio of 2:3 respectively. Their balance sheet as at 31st March, 2017 was as under:
| Liabilities | Rs | Assets | Rs | |
| Sundry Creditors | 24,870 | Cash in Hand | 1,420 | |
| Capital accounts | Cash at Bank | 23,850 | ||
| A | 68,100 | Sundry Debtors | 11,000 | |
| B | 68,100 | 1,36,200 | Stock | 36,000 |
| Furniture | 8,800 | |||
| Building | 80,000 | |||
| 1,61,070 | 1,61,070 |
On that date they admitted C into partnership and gave him one-third share in future profits on the following terms:
(a) Stock and furniture are to be reduced in value by 12(1/2) %.
(b) Buildings are to be appreciated by Rs. 15,000.
(c) A provision of 5% is to be created on sundry debtors for doubtful debts.
(d) C is to bring in Rs. 60,000 as his capital and Rs. 40,000 as goodwill, which sum is to remain the business.
(e) The values of assets and liabilities other than cash are not to be altered.
Draft journal entries to record the above arrangement and show the opening balance sheet of the new firm.
We are providing a solution of Question 45A Chapter 5 of +2 Part-1 in two formats. one is in Video format and another is in article format. Check out both formats as follows:
1. Check out the Solution of this question in Video Format:-
The video consists solution of question numbers from 45 to 45A Chapter no. 5 class 12 of Usha publication. To check the direct solution of question no. 45A from the flowing video by using time stamps of the video.
2. Check out the Solution of this question in Article Format:-
The solution of Question 45 A Chapter 5 of +2 Part-1: –
| Journal | |||||
| Date | Particulars | L.F. | Debit | Credit | |
| 2019 | |||||
| Bank A/c | Dr. | 1,00,000 | |||
| To C’s Capital A/c | . | 60,000 | |||
| To Premium A/c | 40,000 | ||||
| (Being the amount brought in by C as his capital & goodwill ) | |||||
| Premium A/c | Dr. | 40,000 | |||
| To A’s Capital A/c | 16,000 | ||||
| To B’s Capital A/c | 24,000 | ||||
| (Being goodwill transferred to old partners capital A/c in Sacrificing Ratio 2:3) ) | |||||
| Memorandum Revaluation A/c | Dr. | 8,050 | |||
| To A’s Capital A/c | 3,540 | ||||
| To B’s Capital A/c | 5,310 | ||||
| (Being profit on revaluation transferred to old partners in old profit sharing ratio) | |||||
| A’s Capital A/c | Dr. | 2,360 | |||
| B’s Capital A/c | Dr. | 3,540 | |||
| C’s Capital A/c | Dr. | 2,950 | |||
| To Memorandum Revaluation A/c | 8,050 | ||||
| (Being assets revalued) | |||||
| MEMORANDUM Revaluation Account | |||
| Particulars | Amount | Particulars | Amount |
| To Stock A/c | 4,500 | By Buildings A/c | 15,000 |
| To Furniture A/c | 1,100 | ||
| To Provision for doubtful debts | 550 | ||
| To Profit on revaluation transferred to Capital accounts | |||
| A | 3,400 | ||
| B | 5,310 | ||
| 15,000 | 15,000 | ||
| To Building A/c | 15,000 | By Stock A/c | 4,500 |
| By Furniture A/c | 1,100 | ||
| By Provision for doubtful debts | 550 | ||
| By Profit on revaluation transferred to Capital accounts | |||
| A | 3,400 | ||
| B | 5,310 | ||
| C | 2,950 | ||
| 15,000 | 15,000 | ||
| Balance Sheet | |||||
| Liabilities | Amount | Assets | Amount | ||
| Sundry Creditors | 24,870 | Cash in Hand | 1,420 | ||
| Capital accounts | FurnituCash at Bank (23,800+1,00,000) | 1,23,850 | |||
| A | 85,280 | Sundry Debtors | 11,000 | ||
| B | 93,870 | Stock | 36,000 | ||
| C | 57,050 | 2,36,200 | Furniture | 8,800 | |
| Building | 80,000 | ||||
| 2,61,070 | 2,61,070 | ||||
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Working Notes:
CALCULATION OF NEW RATIO
Old Ratio of A&B = 2:3
Let Total profit be = 1
| New Partner C’s share = | = | 1 |
| 3 |
| Remaining Share = | = | 1 | – | 1 |
| 3 | ||||
| = | 2 | |||
| 3 |
| A’s New Share | = | 2 | x | 2 |
| 5 | 3 | |||
| = | 4 | |||
| 15 |
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| B’s New Share | = | 3 | – | 2 |
| 5 | 3 | |||
| = | 6 | |||
| 15 |
NEW RATIO OF A: B: C
= 4 : 6 : 5
(ii) Sacrifice ratio = Old ratio –New ratio
| A’s sacrifice | = | 2 | – | 4 |
| 5 | 15 | |||
| = | 2 | |||
| 15 |
| B’s sacrifice | = | 3 | – | 6 |
| 5 | 15 | |||
| = | 3 | |||
| 15 |
Sacrificing ratio is same as old (2:3)
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Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
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