Question 48 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 48 Chapter 5 – Unimax Class 12 Part 1 – 2021

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The solution of Question 48 Chapter 5 – Unimax Class 12 Part 1

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

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

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