Question 52 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 52 Chapter 5 – Unimax Class 12 Part 1 – 2021

Table of Contents

The solution of Question 52 Chapter 5 – Unimax Class 12 Part 1

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

52. X, Y and Z are equal partners with capitals of Rs. 1500, Rs. 1750 and Rs. 2000 respectively. They agree to admit W into partnership upon payment in cash of Rs. 1500 for 1/4th share of the goodwill and Rs. 1800 as his capital, both sums to remain in the business. The creditors of the old firm amounts to Rs. 3000 and the assets, a part from cash, consist of Motors Rs. 1200, Furniture Rs. 400, Stock Rs. 2650, Debtors Rs. 3780. The Motors and Furniture were revalued at Rs. 950 and Rs. 380 respectively and the depreciation was written off.
Give Journal Entries to give effect to the above arrangements, and also show the initial Balance Sheet of the new firm.

The solution of Question 52 Chapter 5 – Unimax Class 12 Part 1

Journal

Date	Particulars		L.F.	Debit	Credit
	Revaluation a/c	Dr.		270
	To Motors A/c				250
	To Furniture A/c				20
	(Being value of assets decreased)
	X’s capital a/c	Dr.		90
	Y’s capital A/c	Dr.		90
	Z’s Capital A/c	Dr.		90
	To Revaluation a/c				400
	(Being net loss transferred to old partners)
	Cash A/c	Dr.		3300
	To W’s Capital a/c				1800
	To Premium A/c				1500
	(Being capital and goodwill brought by new partners)
	Premium A/c	Dr.		1500
	To X’s capital a/c				500
	To Y’s capital A/c				500
	To Z’s Capital A/c				500

Revaluation A/c

Particulars	Rs.	Particulars		Rs.
To Motors A/c	250	By Loss on revaluation
To Furniture A/c	20	X	90
		Y ( 1 : 1 : 1 )	90
		Z	90	270



	270			270

Capital Accounts

Particulars	X	Y	Z	W	Particulars	X	Y	Z	W
To Loss on revaluation	90	90	90		By Balance b/d	1500	1750	2000	_
To Balance c/d	1910	2160	2410	1800	By Cash A/c (1 : 1 : 1)	_	_	_	1800
					By Premium A/c	500	500	500	_



	2000	2250	2500	1800		2000	2250	2500	1800

Balance Sheet

Liabilities		Rs.	Assets	Rs.
Creditors		3000	Motors	950
Capital Accounts			Furniture	380
X	1910		Stock	2650
Y	2160		Debtors	3780
Z	2410		Cash (220 + 1500 + 1800)	3520
W	1800	8280


		11280		11280