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Question 47 Chapter 5 of +2-Part-1
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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.
We are providing a solution of Question 47 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 46 to 47 Chapter no. 5 class 12 of Usha publication. To check the direct solution of question no. 47 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 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 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 Capital A/c | 3,600 | ||||
| To Shyam’s Capital 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) | 750 | ||||
| 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’ Capital 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 | 550 | 26,950 | ||
| Ram | 4,886 | Cash | 3,210 | ||
| Shyam | 4,205 | Bank (1590+26600) | 28,190 | ||
| 1,19,091 | 1,19,091 | ||||
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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 | = | 6 | x | 3 |
| 11 | 4 | |||
| = | 18 | |||
| 44 |
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| Shyam’s New Share | = | 5 | x | 3 |
| 11 | 4 | |||
| = | 15 | |||
| 44 |
| Arjun’s Share | = | 15 |
| 44 |
NEW PROFIT SHARING RATIO = 18 : 15 : 11
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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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