Question 54 Chapter 5 of +2-Part-1
54. ( Investment taken over by old partner) A & B are sharing profits in the ratio of 5:30 admit C as a partner with 1/3 share in profits. He has to contribute Rs. 25,000 as his capital. The balance sheet of A & B before admission was as follows.
| Liabilities | Rs | Assets | Rs | ||
| Creditors | 21,000 | Goodwill | 10,000 | ||
| Bills Payable | 6,000 | Land & Building | 25,000 | ||
| Capital Account | Plant & Machinery | 30,000 | |||
| A | 50,000 | Stock | 15,000 | ||
| B | 35,000 | 85,000 | Sundry Debtors | 20,000 | |
| General Reserve | 16,000 | Less Provision for Bad Debts | 1,500 | 18,500 | |
| Investments | 20,000 | ||||
| Cash | 9,500 | ||||
| 1,28,000 | 1,28,000 |
Other terms agreed upon were :
(i) Goodwill of the firm to be valued at Rs. 21,000.
(ii) Land and buildings were to be valued at Rs. 35,000 and plant and machinery at Rs. 25,000.
(iii) The provision for bad debts was found to be in excess by Rs. 400.
(iv) A liability for Rs. 1,000 included in sundry creditors was not likely to arise.
(v)Rs. 12,000 of the investments are to be taken over by A and B in their profit-sharing ratios.
(vi) B is to withdraw Rs. 3,400 in cash
Give journal entries to record the above transactions and show the balance sheet of the firm after C’s admission
We are providing a solution of Question 54 Chapter 5 of +2 Part-1 in two formats. one is in Video format and another is in article format. Check out both formats as follows:
1. Check out the Solution of this question in Video Format:-
The video consists solution of question numbers from 53 to 54 Chapter no. 5 class 12 of Usha publication. To check the direct solution of question no. 54 from the following video by using time stamps of the video.
2. Check out the Solution of this question in Article Format:-
The solution to Question 54 Chapter 5 of +2 Part-1: –
| Journal | |||||
| Date | Particulars |
L.F. | Debit | Credit | |
| 1 | Cash A/c | Dr. | 25,000 | ||
| To C’s Capital A/c | 25,000 | ||||
| (Being the cash brought in as capital) | |||||
| 2 | C’s Current A/c | Dr. | 7,000 | ||
| To A’s Capital A/c | 4,375 | ||||
| To B’s Capital A/c | 2,625 | ||||
| (Being goodwill adjusted through Current A/c) | |||||
| 3 | Land & Building A/c | Dr. | 10,000 | ||
| Provisional for doubtful debts A/c) | Dr. | 400 | |||
| Sundry Creditors A/c | Dr. | 1,000 | |||
| To Revaluation A/c | 11,400 | ||||
| (Being revaluation of assets recorded in the books) | |||||
| 4 | Revaluation A/c | Dr. | 5,000 | ||
| To Plant & Machinery A/c | 5,000 | ||||
| (Being decrease in the value of asset recorded in the books) | |||||
| 5 | Revaluation A/c | Dr. | 6,400 | ||
| To A’s Capital A/c | 4,000 | ||||
| To B’s Capital A/c | 2,400 | ||||
| (Being profit on revaluation distributed ) | |||||
| 6 | B’s Capital A/c | Dr. | 3,400 | ||
| To Cash A/c | 3,400 | ||||
| (Being drawings of B) | |||||
| 7 | General reserve A/c | Dr. | 16,000 | ||
| To A’s Capital A/c | 10,000 | ||||
| To B’s Capital A/c | 6,000 | ||||
| (Being General Reserve distributed among old partners) | |||||
| 8 | A’s Capital A/c | Dr. | 6,250 | ||
| B’s Capital A/c | Dr. | 3,750 | |||
| To Goodwill A/c | 10,000 | ||||
| (Being goodwill written off) | |||||
| Partners’ Capital Account | |||||||
| Particulars | A | B | C | Particulars | A | B | C |
| To Cash A/c | 3,400 | By Balance b/d | 50,000 | 35,000 | |||
| To Investment A/c | 7,500 | 4,500 | By Cash A/c | 25,000 | |||
| To Goodwill A/c | 6,250 | 3,750 | By C’s Current A/c | 4,375 | 2,625 | ||
| By Revaluation A/c | 4,000 | 2,400 | |||||
| By General reserve | 10,000 | 6,000 | |||||
| To Balance c/d | 54,625 | 34,375 | 25,000 | ||||
| 68,375 | 46,025 | 25,000 | 68,375 | 46,025 | 25,000 | ||
| Balance Sheet |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Creditors | 20,000 | Land & Building | 35,000 | ||
| Bills Payable | 6,000 | Plant & Machinery | 25,000 | ||
| Capital Account | Stock | 15,000 | |||
| A | 54,625 | Sundry Debtors | 20,000 | ||
|
B |
34,375 | Less Provision for Bad Debts | 1,100 | 18,900 | |
| C | 25,000 | Investments | 8,000 | ||
| C’s current A/c | 7,000 | ||||
| Cash | 31,100 | ||||
| 1,40,000 | 1,40,000 | ||||
Thanks, Please Like and share with your friends
Comment if you have any questions.
End of Solution
Check Out the Solution of all questions of this chapter:
The solution to all questions of Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner) Class 12 Usha Publication – 2024 is shown as follows, click on the image of the question to get the solution.
Advertisement-X
Thanks for completing the chapter. If you understand the question or we have helped you with your homework, please share our website on your social media. We are delighted to help you out.
Thanks again.
End of Post
Download a PDF of Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner):
If you want to download a PDF of this chapter then you can do it. Check out our PDF file on our Store page.
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)
Advertisement-X
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.
In Class 12th the accountancy has 2 books i.e. Part 1 and Part 2. The Books related to the Part 1 are shown above. but If you want to know more about Part 2, you can check it out from the following links. We have provided the links to both books i.e. Accountancy Part 2 by Usha Publication and Advanced Accountancy Part 2 by Unimax Publication.
1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
2. Advanced Accountancy Part 2 Class 12 by Unimax Publication