Question 53 Chapter 5 – Unimax Class 12 Part 1 – 2021

Question 53 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 53 Chapter 5 – Unimax Class 12 Part 1 – 2021

Free Accounting book Solution - Class 11 and Class 12

53. The Balance Sheet of Krishan and Sudama, who share profits and losses in the ratio of 3 : 2, as on 31st December, 2021, is given below :

Liabilities Amount Assets Amount
Sundry Creditors 15,000 Plant and Machinery 30000
Bills Payable 2,750 Patents 5,000
Capital :   Furniture 21,000
Krishan 60000 Stock 26000
Sudama 40000 Sundry Debtors 15000
General Reserve 20250 Cash 6000
    Building 25000
    Goodwill 10000
  138000   138000

On the date of the Balance Sheet, Balram is admitted as a partner with 1/4th share in profits upon the following conditions :
(a) He is to contribute proportionate capital and his share of goodwill in cash.
(b) Goodwill is to be valued at 2 years’ purchase of 4 years’ average profits, which were Rs. 10000; Rs. 9000 ; Rs. 8000 and Rs. 13000 respectively.
(c) Plant and Machinery is to be written down to Rs. 25000 and Patents written up to Rs. 9000.
A provision of 5% on debtors is required. A liability of Rs. 500 included in sundry creditors is not likely to arise.
Pass Journal entries on Balram’s admission and give the Balance Sheet after admission.

The solution of Question 53 Chapter 5 – Unimax Class 12 Part 1

Journal

Date Particulars   L.F. Debit Credit
  Revaluation a/c Dr.   5750  
      To Plant and Machinery A/c       5000
      To Provision for bad debts A/c       750
  (Being value of assets decreases)        
  Patents a/c Dr.   4000  
  Sundry Creditors A/c Dr.   500  
      To Revaluation a/c       4500
  (Being value of asset decreased)        
  Krishan’s Capital a/c Dr.   750  
  Sudama’s Capital a/c Dr.   500  
      To revaluation a/c       1250
  General Reserve a/c Dr.   20250  
     To Krishns’s Capital a/c       12150
     To Sudama’s Capital a/c       8100
  (Being reserve transferred to old partners’ capital)        

 

Date Particulars   L.F. Debit Credit
  Krishna’s Capital a/c Dr.   6000  
  Sudama’s Capital A/c     4000  
      To Goodwill a/c       10000
  (Being old goodwill w/o)        
  Cash a/c Dr.   43000  
      To Balrama’s Capital A/c       38000
      To Premium A/c       5000
  (Being Capital and goodwill brought by new partner)        
  Premium a/c Dr.   5000  
      To Krishna’s Capital A/c       3000
      To Sudama’s Capital A/c       2000
  (Being goodwill transferred to old partner’s a/c)        

  Revaluation A/c

 Particulars
Rs.  Particulars
  Rs.
To Plant and Machinery A/c 5000 By Patents a/c   4000
To Provision for doubtful debts a/c (5% on 15000) 750 By Creditors a/c    
    By Loss on revaluation    
    Krishna (3 : 2) 750  
    Sudama 500 1250
         
         
  5750     5750

  Capital Accounts

Particulars A B C Particulars A B    C
To Goodwill a/c 6000 4000 By Balance b/d 60000 40000
To Loss on revaluation a/c 750 500   By Cash A/c 38000
To Balance c/d 68400 45600 38000 By Premium A/c 3000 2000
        By General Reserve A/c 12150 8100
               
               
  75150 50100 38000   75150 50100 38000

  Balance Sheet

 Liabilities
  Rs.  Assets
  Rs.
Sundry Creditors   14500 Plant and Machinery   25000
Capital Accounts     Patents   9000
Krishna 68400   Furniture   21000
Sudama 45600   Debtors 15000  
Balram 38000 152000 Less Provision for bad debts 750 14250
Bills Payable   2750 Stock   26000
      Cash (6000 + 5000 + 38000)   49000
      Building   25000
    169250     169250

Working Note

(A) Calculation of value of Balrama’s G.W. share :
4 years average profit =10000 + 9000 + 8000 + 13000/4
Total G.W. = 10000 X 2 = Rs. 20000
Balram’s Share = 1/4 X 20000 = Rs. 5000
(B) Calculation Balram’s Capital :
For 3/4 share capital contributed = Rs. 114000
For 1 share capital contributed = Rs. 114000 X 4/3
For 1/4 share capital contributed = Rs. 114000 X 4/3 X 1/4
                                                     = Rs. 38000

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

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