Advertisement

Question 54 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 54 Chapter 5 of +2- Part-
Q-54. - CH-2 - Usha +2 Book 2018 - Solution

Advertisement

Question 54 Chapter 5 of +2-Part-1

Advertisement

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  RsAssets Rs
Creditors 21,000Goodwill 10,000
Bills Payable 6,000Land & Building  25,000
Capital Account  Plant & Machinery 30,000
A50,000 Stock 15,000
B35,00085,000Sundry Debtors20,000 
General Reserve 16,000Less Provision for Bad Debts1,50018,500
   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
DateParticulars
L.F.DebitCredit
      
1Cash A/cDr. 25,000 
 To C’s Capital A/c   25,000
 (Being the cash brought in as capital & goodwill )   
     
2C’s Capital A/cDr. 7,000 
 To A’s Capital A/c   4,375
 To B’s Capital A/c   2,625
 (Being goodwill adjusted in capital A/c of partners)   
      
3Land & Building A/cDr. 10,000 
 Provisional for doubtful debts A/c)Dr. 400 
 Sundry Debtors A/cDr. 1,000 
 To Revaluation A/c   11,400
 (Being revaluation of assets)    
      
4Revaluation A/cDr. 5,000 
 To Plant & Machinery A/c   5,000
 (Being assets revalued )    
      
5Revaluation A/cDr. 6,400 
 To A’s Capital A/c   4,000
 To B’s Capital A/c   2,400
 (Being profit on revaluation distributed )   
      
6B’s Capital A/cDr. 3,400 
 To Cash A/c   3,400
 (Being drawings of B)    
      
7General reserve A/cDr. 16,000 
 To A’s Capital A/c   10,000
 To B’s Capital A/c   6,000
 (Being GENERAL RESERVE distributed)    
      
8A’s Capital A/cDr. 6,250 
 B’s Capital A/cDr. 3,750 
 To Goodwill A/c   10,000
 (Being goodwill written off)    
     
Partners’ Capital Account 
ParticularsAB CParticularsABC
To Cash A/c 3,400 By Balance b/d50,00035,000 
To Investment A/c7,5004,500 By Bank A/c  25,000
To Goodwill A/c6,2503,750 By C’s Current A/c4,3752,625 
    By Revaluation A/c4,0002,400 
    By General reserve10,0006,000 
To Balance c/d 54,62534,37525,000    
 68,37546,02525,000 68,37546,02525,000
Balance Sheet
Liabilities
AmountAssetsAmount
Creditors 20,000Land & Building 35,000
Bills Payable 6,000Plant & Machinery 25,000
Capital Account  Stock 15,000
A54,625 Sundry Debtors20,000 

B

34,375 Less Provision for Bad Debts1,10018,900
C25,000 Investments 8,000
   C’s current A/c 7,000
   Cash 31,000
  1,40,000  1,40,000

Advertisement-X

Thanks, Please Like and share with your friends  

Comment if you have any questions.

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
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

Advertisement

Advertisement

error: Content is protected !!