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

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

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

Free Accounting book Solution - Class 11 and Class 12

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.

(c)40% of General reserve is to be kept as reserve for doubtful debts.

(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

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

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 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

Leave a Reply

Your email address will not be published.