Question 47 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 47 Chapter 5 – Unimax Class 12 Part 1 – 2021

Table of Contents

The solution of Question 47 Chapter 5 – Unimax Class 12 Part 1

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

47. The Balance Sheet of A and B as on 31st March, 2021 is given below. The profit sharing ratio is 2 : 1.

Liabilities	Amount	Assets	Amount
Sundry Creditors	8,000	Freehold Property	10000
General Reserve	12,000	Furniture	3,000
Capital Accounts		Stock	6,000
A	20000	Debtors	30000
B	15000	Cash	3000
		Profit and Loss A/c	3000
	55,000		55,000

C was admitted on the following terms :

(a)C will bring Rs. 10500 of which Rs. 4500 will be for goodwill.

(b)He will get 1/4th share of profits.

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(d)Increase stock by Rs. 1500.

(e)Depreciate furniture by Rs. 500.
Show Journal entries giving effect to the aforesaid arrangements and prepare opening Balance Sheet.

The solution of Question 47 Chapter 5 – Unimax Class 12 Part 1

Journal

Date	Particulars		L.F.	Debit	Credit
	Stock a/c	Dr.		1500
	To Revaluation A/c				1500
	(Being value of assets increased)
	Revaluation a/c	Dr.		1500
	To Furniture A/c				500
	To A’s Capital A/c				667
	To B’s Capital A/c				333
	(Being value of asset decreased and profit transferred to old partners’ capital a/c in old ratio)
	A’s Capital a/c	Dr.		2000
	B’s Capital a/c	Dr.		1000
	To Profit and Loss A/c				3000
	(Being net loss transferred to old partners’ capital a/c)

Date	Particulars		L.F.	Debit	Credit
	General Reserve a/c	Dr.		7200
	To A’s Capital A/c				4800
	To B’s Capital A/c				2400
	(Being reserve transferred to old partners in old profit showing ratio)
	Cash a/c	Dr.		10500
	To C’s Capital A/c				6000
	To Premium A/c				4500
	(Being Capital and goodwill brought in cash by new partner)
	Premium a/c	Dr.		4500
	To A’s Capital A/c				3000
	To B’s Capital A/c				1500
	(Being goodwill credited to old partner’s a/c)

Revaluation A/c

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Particulars		Rs.	Particulars	Rs.
To Furniture		500	By Stock	1500
To Profit on revaluation a/c
A (2 : 1)	667
A (2 : 1)	333

		1500		1500

Capital Accounts

Particulars	A	B	C	Particulars	A	B	C
To Profit and Loss a/c	2000	1000	_	By Balance b/d	20000	15000	_
To Balance c/d	26467	18233	6000	By Cash A/c	_	_	6000
				By Premium A/c	3000	12000	_
				By General Reserve A/c ( 2 : 1)	4800	2400	_
				By Profit on revaluation a/c	667	333	_

	28467	19233	6000		28467	19233	6000

Balance Sheet

Liabilities		Rs.	Assets		Rs.
Sundry Creditors		8000	Freehold Property		10000
Capital Accounts			Furniture		2500
A	26467		Cash		7500
B	18233		Debtors	30000
C	6000	50700	Less Provision for bad debts	4800	25200


		58700			58700

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Working Note
(1)Old Partner’s will sacrifice in old ratio if nothing is mentioned in deed it is assumed.
(2)40% of G.R. is to be kept as reserve for doubtful debts rest of 60% i.e. Rs. 7200 is distributed among old partners in old ratio i.e. 2 : 1 (S.R.)
A : B = 4800 : 2400
(3) Profit and Loss a/c on assets side is distributed among at partners as loss in old ratio
A : B = 2 : 1
= 2000 : 1000

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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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

The solution of Question 47 Chapter 5 – Unimax Class 12 Part 1

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)

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