Question 48 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 48 Chapter 5 of +2- Part-

Question 48 Chapter 5 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

48. (Revaluation A/c/Partner‘s Cap A/c/B/S) L and M share the profits of a business in the Ratio 5:3. They admit N into partnership for ¼ share in the profits to be contributed equally by L and M. On the date of admission the balance sheet of the firm was as follows:

Liabilities  Rs Assets Rs
L’s Capital 30,000 Machinery 26,000
M’s Capital 20,000 Furniture 18,000
Workmen’s Compensation fund 4,000 Stock 10,000
Bank Loan 12,000 Debtors 8,000
Creditors 2,000 Bank 6,000
  68,000   68,000

Terms of M’s admission were as follows:
(i) N will bring Rs. 25,000 as his capital.
(ii) Goodwill of the firm is to be valued at 4 years purchase of the average super-profits of last 3 years. Average profits of last 3 years were at Rs. 20,000, while the normal profits that can be earned with the capital employed are Rs. 12,000. No goodwill is to be raised in the books of the firm.
(iii) Furniture is to be appreciated by Rs. 6,000 and the value of a stock to be reduced by 20%
Prepare Revaluation Account, Partners Capital Accounts, and Balance Sheet of the new firm.

The solution of Question 48 Chapter 5 of +2 Part-1: – 

Revaluation Account
Particulars
Amount Particulars Amount
To Stock   2,000 By Furniture   6,000
To profit on Revaluation          
– L 5/8 2,500        
– M 3/8 1,500 4,000      
    6,000     6,000
Partners’ Capital Account
 
Particulars L M N Particulars L M N
        By Balance b/d 30,000 20,000  
        By Revaluation A/c 2,500 1,500  
        By Bank A/c     25,000
        By N’s Current A/c 4,000 4,000  
To Balance c/d 36,500 25,500 25,000        
  36,500 25,500 25,000   36,500 25,500 25,000
Balance Sheet
Liabilities
Amount Assets Amount
Workmen’s Compensation fund   4,000 Machinery   26,000
Bank Loan   12,000 Furniture   24,000
Creditors   2,000 Stock   8,000
L’s Capital 36,500   Debtors   8,000
M’s Capital 25,500   N’s Current A/c   8,000
N’s Capital 25,000 87,000 Bank(6000+25000)   31,000
    1,05,000     1,05,000

Working Notes:

Goodwill :

    Rs
Average Profits = 12,000
Normal Profits = 20,000
Super Profits = (Average – Normal)Profits    
  = 20,000 – 12,000
  = 8,000
Goodwill = Super Profit X Years of Purchase
  = 8,000 x 4
  = 32,000
N’s Share of Goodwill  = 32,000 X 1
4
         
  = 8,000    

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Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 48 Chapter 5 of +2 Part-1 - USHA Publication 12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

2 thoughts on “Question 48 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1”

    1. It is correct. Just in revaluation, there is a typing error.
      now this is removed and please check it out now. and comment us if there is any other error.

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