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Question 48 Chapter 5 of +2-Part-1
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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.
We are providing a solution of Question 48 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 48 to 50 Chapter no. 5 class 12 of Usha publication. To check the direct solution of question no. 48 from the following video by using time stamps of the video.
2. Check out the Solution of this question in Article Format:-
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 |
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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
- 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
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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The solution of this question is not right please correct it…
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.