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Question 49 Chapter 5 of +2-Part-1
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49. (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 a 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 |
| Sundry Creditors | 20,000 | Cash | 14,000 |
| Capital A/c s | Debtors | 18,000 | |
| Vimal | 60,000 | Plant & Machinery | 50,000 |
| Nirmal | 32,000 | Stock | 40,000 |
| Profit and losses A/c | 10,000 | ||
| 1,22,000 | 1,22,000 |
On this day, Kailash agrees to join the business on the following terms and conditions:
(i)He will introduce Rs. 40,000 as his capital and pay Rs. 20,000 to the existing partners for his share of goodwill.
(ii) The new profit sharing ratio is 2:1:1 respectively for Vimal, Nirmal and Kailash.
(iii) A revaluation of assets will be made by reducing plant and machinery to Rs. 35,000 and bad and doubtful debts. Stock by 10%. Provision of Rs. 1,000 to be created for bad and doubtful debts
(iv) Goodwill account is not to be raised.
Pass journal entries for the above arrangement and give the balance sheet of the newly Constituted firm. Also specify the sacrifice ratio.
We are providing a solution of Question 49 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. 49 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 49 Chapter 5 of +2 Part-1: –
| Journal | |||||
| Date | Particulars | L.F. | Debit | Credit | |
| Revaluation A/c | Dr. | 20,000 | |||
| To Plant & Machinery A/c | . | 15,000 | |||
| To Stock A/c(10% of 140,000) | 4,000 | ||||
| To Provisional for doubtful debts A/c) | 1,000 | ||||
| (Being the decrease in the value of various assets on Kailash’s Admission ) | |||||
| Vimal’s Capital A/c | Dr. | 12,000 | |||
| Nirmal’s Capital A/c | Dr. | 8,000 | |||
| To Revaluation A/c | 20,000 | ||||
| (Being loss on the revaluation transferred to Capital’s of old partners in old ratio) | |||||
| Cash A/c | Dr. | 60,000 | |||
| To Kailash’s Capital A/c | 40,000 | ||||
| To Premium A/c | 20,000 | ||||
| (Being assets revalued ) | |||||
| Premium A/c | Dr. | 20,000 | |||
| To Vimal’s Capital A/c | 8,000 | ||||
| To Nirmal’s Capital A/c | 12,000 | ||||
| (Being amount of goodwill brought in by Kailash shared by old partners in old ratio) | |||||
| Cash Account | |||||
| Particulars | Amount | Particulars | Amount | ||
| To Balance b/d | 14,000 | By Balance b/d | 74,000 | ||
| To Kailash’s Capital A/C | 40,000 | ||||
| To Goodwill A/c | 20,000 | ||||
| 74,000 | 74,000 | ||||
| Vimal’s capital Account | |||||
| Particulars | Amount | Particulars | Amount | ||
| To Revaluation Account | 12,000 | By Balance b/d | 60,000 | ||
| To Balance c/d | 62,000 | By Profit & loss Account | 6,000 | ||
| By Premium Account | 8,000 | ||||
| 74,000 | 74,000 | ||||
| Nirmal capital Account | |||||
| Particulars | Amount | Particulars | Amount | ||
| To Revaluation Account | 8,000 | By Balance b/d | 32,000 | ||
| To Balance c/d | 40,000 | By Profit & loss Account | 4,000 | ||
| By Premium Account | 12,000 | ||||
| 48,000 | 48,000 | ||||
| Kailash’s capital Account | |||||
| Particulars | Amount | Particulars | Amount | ||
| To Balance c/d | 40,000 | By Bank Account | 40,000 | ||
| 40,000 | 40,000 | ||||
| Balance Sheet | |||||
| Liabilities | Amount | Assets | Amount | ||
| Sundry Creditors | 4,000 | Cash | 74,000 | ||
| Capital A/c s | 12,000 | Debtors | 18,000 | ||
| Vimal | 60,000 | Less provision For debts | 1,000 | 17,000 | |
| Nirmal | 40,000 | Stock (40000-4000) | 36,000 | ||
| Kailash | 40,000 | 1,40,000 | Plant & Machinery (50000 -15000) | 35,000 | |
| 1,62,000 | 1,62,000 | ||||
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Working Notes:
Calculation of sacrifice Ratio :
| Vimal’s sacrifice Ratio | = | 3 | – | 2 |
| 5 | 4 | |||
| = | 2 | |||
| 20 |
| Nirmal’s sacrifice Ratio | = | 2 | – | 1 |
| 5 | 4 | |||
| = | 3 | |||
| 20 |
Sacrifice made by Vimal & Nirmal at the admission of Kailash is in the ratio of 2:3
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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
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