Question 52 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1

Q 52. CH 2 Usha 2 Book 2018 Solution min - Question 52 Chapter 5 of +2 Part-1 - USHA Publication 12 Class Part - 1

Question 52 Chapter 5 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

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    28,000
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.

The solution of Question 52 Chapter 5 of +2 Part-1: –

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 10,890 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
A 60,900   Plant and machinery   60,000
B 49,340   Land & Building   60,000
C 32,000 1,42,240 Furniture   9,000
      Anshu current A/C   4,440
    2,35,240     2,35,240

WORKING NOTES :

(i) 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)Good will

Total Capital of the firm = 32,000X 5 = Rs. 1,6000

Combined Capital:    
Deepika = 58,680
Rajshree = 47,120
Anshu = 32,000
  = 1,37,800
Less : Combined Capitals of partners : = 22,000

Anshu’s share = Rs. 4,440

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Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 52 Chapter 5 of +2 Part-1 - USHA Publication 12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

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