Question 52 Chapter 5 of +2 Part-1 – USHA
52. (Hidden Goodwill)Deepika & Rajshree are partners in the firm sharing profits & losses in ratio 3:2. On 31st March 2019 their balance sheet was as under :
| Liabilities | Rs | Assets | Rs | ||
| Sundry creditors | 16,000 | Cash in hand | 1,200 | ||
| Public Deposits | 61,000 | Cash at Bank | 2,800 | ||
| Banks overdrafts | 6,000 | Stock | 32,000 | ||
| Outstanding liabilities | 2,000 | Prepaid insurance | 1,000 | ||
| Capital Accounts | Sundry debtors | 28,800 | |||
| Deepika | 48,000 | Less reserve for doubtful debts | 800 | 28,000 | |
| Rajshree | 40,000 | 88,000 | Plant and machinery | 48,000 | |
| Land & Building | 50,000 | ||||
| Furniture | 10,000 | ||||
| 1,73,000 | 1,73,000 |
On the above date, the partners decide to admit Anshu as a partner on the following
Terms :
(i) The new profit sharing ratio of Deepika Rajshree and Anshu will be 5: 3:2 respectively.
(ii) Anshu will bring Rs. 32,000 as his capital.
(iii)Anshu is unable to bring in cash his share of goodwill. They further decided to calculate goodwill on the basis of Anshu’s share in the profits and the capital contribution made by him to the firm.
(iv) Plant and machinery is to be valued at Rs. 60,000; stock at Rs. 40,000 and Reserve for doubtful debts is to be maintained at Rs. 4,000. Value of land and building has appreciated by 20% furniture has depreciated by 10%.
(v) There is an additional liability of Rs. 8,000 being outstanding salary payable to employees of the firm. This liability is not included in the outstanding liabilities stated in the above balance sheet. Partners decide to show this liability in the books of accounts of the reconstituted new firm.
Prepare revaluation account, partners’ capital accounts, and the balance sheet of Deepika, Rajshree, and Anshu.
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The solution of Question 52 Chapter 5 of +2 Part-1 – USHA: –
| Revaluation Account |
|||||
| Particulars |
Amount | Particulars | Amount | ||
| To Provision for doubtful debts | 3,200 | By Plant & Machinery | 12,000 | ||
| To Furniture A/c | 1,000 | By Stock | 8,000 | ||
| To Outstanding salary A/c | 8,000 | By Land & Building | 10,000 | ||
| To profit on Revaluation | |||||
| – Deepika 3/5 | 10,680 | ||||
| – Rajshree 2/5 | 7,120 | 17,800 | |||
| 30,000 | 30,000 | ||||
| Partners’ Capital Account | |||||||
| Particulars | Deepika | Rajshree | Anshu | Particulars | Deepika | Rajshree | Anshu |
| By Balance b/d | 48,000 | 40,000 | |||||
| By Bank A/c | 32,000 | ||||||
| By Anshu’s current A/c (profit) |
2,220 | 2,220 | |||||
| By Revaluation A/c | 10,680 | 7,120 | |||||
| To Balance c/d | 60,900 | 49,340 | 32,000 | ||||
| 60,900 | 49,340 | 32,000 | 60,900 | 49,340 | 32,000 | ||
| Balance Sheet |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Sundry Creditors | 16,000 | Cash in hand | 1,200 | ||
| Public Deposits | 61,000 | Cash at Bank | 34,800 | ||
| Banks overdrafts | 6,000 | Stock | 40,000 | ||
| Outstanding liabilities | 2,000 | Prepaid insurance | 1,000 | ||
| Outstanding salary | 8,000 | Sundry debtors | 28,800 | ||
| Capital Accounts | Less reserve for doubtful debts |
4,000 | 24,800 | ||
| Deepika | 60,900 | Plant and machinery | 60,000 | ||
| Rajshree | 49,340 | Land & Building | 60,000 | ||
| Anshu | 32,000 | 1,42,240 | Furniture | 9,000 | |
| Anshu current A/C | 4,440 | ||||
| 2,35,240 | 2,35,240 | ||||
WORKING NOTES :
(i) Calculation of Sacrificing ratio
| Deepika | : | Rajshree | : | Anshu | ||
| Old ratio | = | 3 | : | 2 | : | – |
| New ratio | = | 5 | : | 3 | : | 2 |
Partner’s sacrifice = old Share – new share
| Deepika’s sacrifice | = | 3 | – | 5 |
| 5 | 10 | |||
| = | 1 | |||
| 10 |
| Rajshree’s sacrifice | = | 2 | – | 3 |
| 5 | 10 | |||
| = | 1 | |||
| 10 |
SACRIFICING RATIO = 1 : 1
(ii) calculation of Goodwill
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Calculate total capital of firm after Anshu’s Admission:
= New Partners’ Capital X Reverse of his share
= 32,000 X 10/2 = ₹ 1,60,000
| Calculation of combined capital of all partners without share of goodwill but after all adjustments:- | ||
| Deepika | = | 58,680 |
| Rajshree | = | 47,120 |
| Anshu | = | 32,000 |
| = | 1,37,800 | |
Calculation of Goodwill:-
= Total Capital of firm – Combined Capital of firm
= ₹ 1,60,000 – ₹ 1,37,800
= ₹ 22,200
Anshu’s share of goodwill
= ₹ 22,200 x 2/10
= ₹ 4,440
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Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum
Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)
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)
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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)
Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 1 Class 12 by Unimax Publication
- Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
- Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
- Chapter No. 3 – Partnership Accounts – II (Goodwill)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
- 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)
Check out Part 2 of both books.
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1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
2. Advanced Accountancy Part 2 Class 12 by Unimax Publication