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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

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

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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 :

LiabilitiesAmountAssetsAmount
Sundry Creditors15,000Plant and Machinery30000
Bills Payable2,750Patents5,000
Capital : Furniture21,000
Krishan60000Stock26000
Sudama40000Sundry Debtors15000
General Reserve20250Cash6000
  Building25000
  Goodwill10000
 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

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

 

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

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  Revaluation A/c

 Particulars
Rs. Particulars
 Rs.
To Plant and Machinery A/c5000By Patents a/c 4000
To Provision for doubtful debts a/c (5% on 15000)750By Creditors a/c  
  By Loss on revaluation  
  Krishna (3 : 2)750 
  Sudama5001250
     
     
 5750  5750

  Capital Accounts

ParticularsABCParticularsAB   C
To Goodwill a/c60004000By Balance b/d6000040000
To Loss on revaluation a/c750500 By Cash A/c38000
To Balance c/d684004560038000By Premium A/c30002000
    By General Reserve A/c121508100
        
        
 751505010038000 751505010038000

  Balance Sheet

 Liabilities
 Rs. Assets
 Rs.
Sundry Creditors 14500Plant and Machinery 25000
Capital Accounts  Patents 9000
Krishna68400 Furniture 21000
Sudama45600 Debtors15000 
Balram38000152000Less Provision for bad debts75014250
Bills Payable 2750Stock 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 4 Types

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T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

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

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