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

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

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

Free Accounting book Solution - Class 11 and Class 12

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 

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 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

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