Question 50 Chapter 5 – Unimax Class 12 Part 1 – 2021

Question 50 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 50 Chapter 5 – Unimax Class 12 Part 1 – 2021

Free Accounting book Solution - Class 11 and Class 12

50. The Balance Sheet of A and B carrying on business in partnership and sharing profits in proportion of 2/3rd and 1/3rd respectively, stood as follows :

Liabilities Amount Assets Amount
Creditors 8300 Cash 2000
Reserve 3500 Debtors 28,000
Capital Accounts   Furniture 8000
A : 51450 Stock 22000
B : 36750 Machinery 40000
       
  1,00,000   1,00,000

They admitted C into partnership giving him 1/5th share of profits on the following terms :
(a) The goodwill of the firm is to be valued at two years’ purchase of the average profits of the last three-years, which amounted to Rs. 20000, Rs. 15000 and Rs. 22000.
(b) C is to bring in cash his share of goodwill.
(c) C is to bring in capital in proportion to his profit sharing arrangements with other partners.
Give Journal entries prepare capital a/cs and opening Balance Sheet of the firm and also state their future profit sharing raito.

The solution of Question 50 Chapter 5 – Unimax Class 12 Part 1

Journal

Date Particulars   L.F. Debit Credit
  General Reserve a/c Dr.   3500  
      To A’s Capital A/c       2333
      To B’s Capital A/c       1167
  (Being reserve transferred to old partners in old profit showing ratio)        
  Cash a/c Dr.   32425  
      To C’s Capital A/c       24825
      To Premium A/c       7600
  (Being Capital and goodwill brought in cash by new partner)        
  Premium a/c Dr.   7600  
      To A’s Capital A/c       5067
      To B’s Capital A/c       2533
  (Being goodwill credited to old partner’s a/c)        

  Capital Accounts

Particulars A B C Particulars A B    C
To Balance c/d 48850 40450 24825 By Balance b/d 51450 36750
        By Cash A/c 24825
        By Premium A/c 5067 2533
        By G.R A/c 2333 1167
               
               
  58850 40450 24825   58850 40450 24825

  Balance Sheet

 Liabilities
  Rs.  Assets
Rs.
Sundry Creditors   8300 Cash 34425
Capital Accounts     Cash 22000
A 58850   Machinery 40000
B 40450   Debtors 28000
C 24825 124125 Furniture 8000
         
         
    132425   132425

Working Note

(A) Calculation of C’s share of G.W.

Average profit of last 3 years =15000 + 20000 + 22000/3
                      = Rs. 19000
Value of firm’s G.W. = 19000 X 2 = Rs. 38000
C’s share = 38000 X 1/5
              = Rs. 7600
(B) Calculation of Prop. Capital to brought by C.
For 4/5 share capital contributed = Rs. 99300
For 4/5 share capital contributed = Rs. 99300 X 5/4
For 4/5 share capital contributed = Rs. 99300 X 5/4 X 1/5
                                                      = Rs. 24825

 

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

Leave a Reply

Your email address will not be published.