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Question 48 Chapter 5 – Unimax Class 12 Part 1 – 2021
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48. A and B are partners in a firm sharing profits in the ratio of 3 : 2. On 1st January, 2021, the position of the business is as follows :
| Liabilities | Amount | Assets | Amount | |
| Sundry Creditors | 10,000 | Goodwill | 5000 | |
| General Reserve | 5,000 | Stock | 19000 | |
| Capital | Plant and Machinery | 25000 | ||
| A | 30000 | Debtors | 20000 | |
| B | 25000 | Less : Provision for Doubtful debts | 1000 | 19000 |
| Cash | 2000 | |||
| 70,000 | 70,000 |
On this date, C agrees to join the business on the following conditions :
(1)He will introduce Rs. 20000 as his capital and pay Rs. 10000 to the partners as premium for goodwill. The new profit sharing ratio is 2 : 1 : 1 for A, B and C respectively.
(2)A revaluation of the assets of the firm will be made by reducing plant and machinery to Rs. 22000 ; Stock is to be reduced by Rs. 2000 and create a provision for bad and doubtful debts at 6% on debtors.
Prepare revaluation A/c, Capital accounts and give the new Balance Sheet.
The solution of Question 48 Chapter 5 – Unimax Class 12 Part 1
Revaluation A/c
| Particulars | Rs. | Particulars | Rs. | |
| To Machinery A/c | 3000 | By Loss on Revaluation A/c | ||
| To Stock A/c | 2000 | A (3 : 2) | 3120 | |
| To Provisiaon for doubtful debts a/c | 200 | B | 2080 | 5200 |
| 5200 | 5200 |
Capital Accounts
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| Particulars | A | B | C | Particulars | A | B | C |
| To Loss on revaluation a/c | 3120 | 2080 | _ | By Balance b/d | 30000 | 25000 | _ |
| To goodwill a/c (3 :2) | 3000 | 2000 | _ | By Cash A/c | _ | _ | 20000 |
| To Balance c/d | 30880 | 28920 | 20000 | By Premium A/c | 4000 | 6000 | _ |
| By General Reserve A/c ( 3 : 2) | 3000 | 2000 | _ | ||||
| 37000 | 33000 | 20000 | 37000 | 33000 | 20000 |
Balance Sheet
| Liabilities | Rs. | Assets | Rs. | ||
| Sundry Creditors | 10000 | Stock | 17000 | ||
| Capital Accounts | Plant and Machinery | 22000 | |||
| A | 30880 | Cash | 32000 | ||
| B | 28920 | Debtors | 20000 | ||
| C | 20000 | 79800 | Less Provision | 1200 | 18800 |
| 89800 | 89800 |
Working Note
A’s Sacrifice = 3/5 – 2/4
= 2/20
B’s Sacrifice = 2/5 – 1/4
= 3/20
Sacrificing ratio = 2 : 3
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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- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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