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Question 50 Chapter 5 of +2-Part-1
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50. (Provision for a discount on Creditors ) the balance sheet of X& Y who are partners sharing profits in a ratio of 3:2 on 31st march,2019 is as under :
Liabilities | Rs | Assets | Rs | |
Creditors | 6,200 | Cash | 2,000 | |
Bills Payable | 3,300 | Stock | 7,700 | |
General Reserve | 5,000 | Debtors | 8,800 | |
Capital Account | Plant & Machinery | 18,000 | ||
X | 16,800 | Investments | 3,000 | |
Y | 13,200 | 30,000 | Goodwill | 5,000 |
44,500 | 44,500 |
On the above date, Z is admitted as a partner. X surrenders 1/6th of his share and Y 1/3rd of his share in favour of Z. Goodwill is worth Rs. 60,000. Z brings only 1/2 of his share of goodwill in cash and Rs. 15,000 as his capital. The following revaluations are made :
Stock, Plant, and Machinery are worth 10% less than the book value. The market value of investments is Rs. 12,000. Make a provision of 5% for bad and doubtful debts on debtors and a provision of 5% for a discount on Creditors.
Calculate the new ratio, and sacrificing ratio, and also pass journal entries to record the above arrangement. Also, prepare the Balance Sheet of the firm as newly constituted.
We are providing a solution of Question 50 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. 50 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 50 Chapter 5 of +2 Part-1: –
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CALCULATION OF SACRIFICING RATIO :
X’s sacrifice Ratio | = | 1 | x | 3 |
6 | 5 | |||
= | 3 | |||
30 |
Y’s sacrifice Ratio | = | 1 | x | 2 |
3 | 5 | |||
= | 2 | |||
15 |
SACRIFICING RATIO = 3 : 4
NEW PROFIT SHARING RATIO = OLD SHARE OF OLD PARTNERS
X’s new share | = | 3 | – | 3 |
5 | 30 | |||
= | 15 | |||
30 |
Y’s new share | = | 2 | – | 4 |
5 | 30 | |||
= | 8 | |||
30 |
Z’s new share | = | 3 | + | 2 |
30 | 30 | |||
= | 7 | |||
30 |
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NEW PROFIT SHARING RATIO = 15: 8: 7
Goodwill of the firm = Rs. 60,000
Share of Z = | 7 | x | 60,000 | = | Rs. 14,000 |
30 |
1 | Share of goodwill is brought in cash i.e., |
2 |
14,000 | x | 1 | = | Rs. 7,000 |
2 |
Journal | |||||
Date | Particulars | L.F. | Debit | Credit | |
i | Cash A/c | Dr. | 22,000 | ||
To Z’s Capital A/c | . | 15,000 | |||
To Premium A/c | 7,000 | ||||
(Being the cash brought in as capital & goodwill ) | |||||
ii | X’s Capital A/c | Dr. | 3,000 | ||
Y’s Capital A/c | Dr. | 2,000 | |||
To Goodwill A/c | 5,000 | ||||
(Being goodwill written off) | |||||
iii | Premium A/c | Dr. | 7,000 | ||
Z’s Current A/c | Dr. | 7,000 | |||
To X’s Capital A/c | 6,000 | ||||
To Y’s Capital A/c | 8,000 | ||||
(Being assets revalued ) | |||||
iv | Revaluation A/c | Dr. | 3,010 | ||
To Stock A/c(10% of 10,000) | 770 | ||||
To Plant & Machinery A/c | 1,800 | ||||
To provisional for doubtful debts A/c) | 410 | ||||
(Being assets revalued ) | |||||
v | Investment A/c | Dr. | 9,000 | ||
Reserve for a discount on creditors Capital A/c | Dr. | 310 | |||
To Revaluation A/c | 9,310 | ||||
(Being assets & liabilities revalued ) | |||||
vi | Revaluation A/c | Dr. | 6,300 | ||
To X’s Capital A/c | 3,780 | ||||
To Y’s Capital A/c | 2,520 | ||||
(Being profit on revaluation distributed ) | |||||
vii | General reserve A/c | Dr. | 5,000 | ||
To X’s Capital A/c | 3,000 | ||||
To Y’s Capital A/c | 2,000 | ||||
(Being GENERAL RESERVE distributed ) | |||||
Partners’ Capital Account | |||||||
Particulars | X | Y | Z | Particulars | X | Y | Z |
To Goodwill A/c | 3,000 | 2,000 | By Balance b/d | 16,800 | 13,200 | ||
By Cash A/c | 15,000 | ||||||
By Premium A/c | 3,000 | 4,000 | |||||
By Z’s Current A/c | 3,000 | 4,000 | |||||
By Revaluation A/c (Profit) | 3,780 | 2,520 | |||||
By General reserves | 3,000 | 2,000 | |||||
To Balance c/d | 26,580 | 23,720 | 15,000 | ||||
29,580 | 25,720 | 15,000 | 29,580 | 25,720 | 15,000 |
Balance Sheet | |||||
Liabilities | Amount | Assets | Amount | ||
Sundry Creditors | 6,200 | Cash(2000+22000) | 24,000 | ||
Less: Reserve for discount | 310 | 5,890 | Stock (7700-770) | 6,930 | |
Bills Payable | 3,300 | Debtors | 8,800 | ||
Capital Account | Less provision | 440 | 8,360 | ||
X | 26,580 | Plant & Machinery | 16,200 | ||
Y | 23,720 | Investments (3000+9000) | 12,000 | ||
Z | 15,000 | 65,300 | Z’s Current A/c | 7,000 | |
74,490 | 74,490 |
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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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There are so many calculations mistakes correct them ok
Thanks, a lot.
Please check it now.