Question 47 Chapter 5 of +2-Part-1
47. ( Necessary Adjusting Entries) The Balance sheet of Ram and Shyam who share profits in proportion to capital as at 31st March 2019 is as follows:
| Liabilities | Rs | Assets | Rs | |
| Creditors | 19,000 | Freehold Premises | 20,000 | |
| Bills payable | 16,000 | Plant & Machinery | 13,500 | |
| Capital accounts | Furniture & Fittings | 1,750 | ||
| Ram | 30,000 | Motor lorries | 1,350 | |
| Shyam | 25,000 | 55,000 | Stock | 14,100 |
| Current accounts | Bills Receivables | 10,800 | ||
| Ram | 2000 | Debtors | 27,500 | |
| Shyam | 1,800 | 3,800 | Bank | 1,590 |
| Cash | 3,210 | |||
| 93,800 | 93,800 |
On 1st April 2019. They admitted Arjun into partnership on the following terms:
(a) Arjun to bring in Rs. 20,000 as capital and Rs. 6,600 for goodwill. He is to receive one-fourth share of the profits.
(b) Reserve is to be raised equal to 2 percent on debtors as provision for probable bad debts
(c) Value of stock to be written down by 5 percent.
(d) Freehold premises are to be valued at Rs. 22,406; plant and machinery Rs. 11,800: Fixture and Fittings Rs. 1,540 and Motor lorries Rs. 800.
You are required to make the necessary adjusting tries in the firm. Also, give the Balance Sheet of the new firm and give the proportions in which the partners will share profits, the proportions of Ram and Shyam being as formerly.
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The solution of Question 47 Chapter 5 of +2 Part-1: –
| Journal | |||||
| Date | Particulars |
L.F. | Debit | Credit | |
| 1 | Bank A/c | Dr. | 26,600 | ||
| To Arjun’s Capital A/c | . | 20,000 | |||
| To Premium for Goodwill A/c | 6,600 | ||||
| (Being cash brought in by new partner as his capital & goodwill ) | |||||
| 2 | Premium A/c | Dr. | 6,600 | ||
| To Ram’s Current A/c | 3,600 | ||||
| To Shyam’s Current A/c | 3,000 | ||||
| (Being goodwill distributed in Sacrificing Ratio 6:5) ) | |||||
| 3 | Revaluation A/c | Dr. | 3,715 | ||
| To provisional for doubtful debts A/c(2% of 27,5000) | 550 | ||||
| To Stock A/c(5% of 14,100) (Decrease) | 705 | ||||
| To Plant & Machinery A/c (13500-11800)(Decrease) | 1,700 | ||||
| To Furniture & Fittings A/c (1750-1540)(Decrease) | 210 | ||||
| To Motor lorries A/c (1350-800) | 550 | ||||
| (Being assets revalued ) | |||||
| 4 | Freehold Premises A/c | Dr. | 2,406 | ||
| To Revaluation A/c | 2,406 | ||||
| (Being revaluation of assets) | |||||
| 5 | Ram’s Current A/c | Dr. | 714 | ||
| Shyam’s Current A/c | Dr. | 595 | |||
| To Revaluation A/c | 1,309 | ||||
| (Being loss on revaluation distributed) | |||||
| Partners’ Current Account |
|||||
| Particulars | Ram | Shyam | Particulars | Ram | Shyam |
| To Revaluation A/c (loss) | 714 | 595 | By Balance b/d | 2,000 | 1,800 |
| By Premium Account | 3,600 | 3,000 | |||
| To Balance c/d | 4,886 | 4,205 | |||
| 5,600 | 4,800 | 5,600 | 4,800 | ||
| Balance Sheet |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Sundry Creditors | 19,000 | Freehold Premises | 22,406 | ||
| Bills Payable | 16,000 | Plant and machinery | 11,800 | ||
| Capital accounts | Furniture & Fittings | 1,540 | |||
| Ram | 30,000 | Motor lorries | 800 | ||
| Shyam | 25,000 | Stock | 13,395 | ||
| Arjun | 20,000 | 75,000 | Bills Receivables | 10,800 | |
| Debtors | 27,500 | ||||
| Current accounts | Less: provision for D/D | 550 | 26,950 | ||
| Ram | 4,886 | Cash | 3,210 | ||
| Shyam | 4,205 | Bank (1590+26600) | 28,190 | ||
| 1,19,091 | 1,19,091 | ||||
Working Notes:
NET PROFIT SHARING RATIO
Old Ratio of Ram & Shyam = 6:5
Let Total profit of the firm be Rs. 1
| New Partner C’s share = | = | 1 |
| 4 |
| Joint Share of Ram & Shyam | = | 1 | – | 1 |
| 4 | ||||
| = | 3 | |||
| 4 |
| Ram’s New Share | = | 3 | x | 6 |
| 4 | 11 | |||
| = | 18 | |||
| 44 |
| Shyam’s New Share | = | 3 | x | 5 |
| 4 | 11 | |||
| = | 15 | |||
| 44 |
| Arjun’s Share | = | 11 |
| 44 |
NEW PROFIT SHARING RATIO = 18 : 15 : 11
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The solution to all questions of Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner) Class 12 Usha Publication – 2024 is shown as follows, click on the image of the question to get the solution.
Question 18 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1
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Question 47 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1
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Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum
Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)
Chapter No. 2 – Partnership Accounts – I (Introduction)
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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)
Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 1 Class 12 by Unimax Publication
- Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
- Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
- Chapter No. 3 – Partnership Accounts – II (Goodwill)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
- 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)
Check out Part 2 of both books.
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1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
2. Advanced Accountancy Part 2 Class 12 by Unimax Publication