Question 55 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 55 Chapter 5 of +2-Part-1

55. (Goodwill is not brought in Cash) The following was the balance sheet of Ajay, Vijay and Kamal as on 31-3-2018:

Liabilities		Rs	Assets	Rs
Creditors		11,000	Land & buildings	50,000
Bills Payable		6,000	Furniture	7,500
Capital Accounts			Stock	30,000
Ajay	40,000		Debtors	26,500
Vijay	33,500		Cash	1,000
Kamal	25,000	98,500	Input CGST	250
			Input SGST	250
		1,15,500		1,15,500

They share profits and losses in the ratio of 6: 5: 3. On 1-4-2015 they agreed to admit Subodh into partnership and give him a share of 10 paise in the rupee on the following terms:
(i) That Subodh should bring in Rs. 14,000 as capital.
(ii) That stock is depreciated by 10% and furniture by Rs. 900.
(iii) That a reserve of Rs. 1,300 be made for the outstanding repair bills. (iv) That the value of land and buildings be brought up to Rs. 65,000. (v) That Subodh does not contribute anything for goodwill which was valued Rs. 8,400 for the firm.
Pass necessary journal entries to record the above arrangements and prepare the new Balance Sheet of the firm.

The solution of Question 55 Chapter 5 of +2 Part-1: –

Journal
Date	Particulars		L.F.	Debit	Credit
1	Cash A/c	Dr.		14,000
	To Subodh’s Capital A/c				14,000
	(Being capital brought by new partner)
2	Revaluation A/c	Dr.		5,200
	To Stock A/c (10% of 30,000)				3,000
	To Furniture A/c				900
	To outstanding repairs A/c				1,300
	(Being assets and liabilities revalued)
3	Land & Building A/c	Dr.		15,000
	To Revaluation A/c				15,000
	(Being revaluation of assets)
4	Revaluation A/c	Dr.		9,800
	To Ajay’s Capital A/c				4,200
	To Vijay’s Capital A/c				3,500
	To Kamal’s Capital A/c				2,100
	(Being profit on revaluation distributed)
5	Subodh’s Current A/c	Dr.		840
	To Ajay’s Capital A/c				360
	To Vijay’s Capital A/c				300
	To Kamal’s Capital A/c				180
	(Being new partner’s share in goodwill adjusted in Sacrifice ratio 6:5:3)

Balance Sheet
Particulars		Amount	Particulars		Amount
To Stock A/c		3,000	By Land & Buildings A/c		15,000
To Furniture A/c		900
To O/S Repairs A/c		1,300
To Profit on revaluation transferred to Capital accounts
– Ajay’ capital A/c	4,200
– Vijay capital A/c	3,500
-Kamal capital A/c	2,100	9,800
		15,000			15,000

Partners’ Capital Account
Particulars	Ajay	Vijay	Kamal	Subodh	Particulars	Ajay	Vijay	Kamal	Subodh
					By Balance b/d	40,000	33,500	25,000
					By Bank A/c				14,000
					By C’s Current A/c	4,200	2,625	2,100
					By Subodh’s Current A/c	360	300	600
To Balance c/d	44,560	37,300	27,280	14,000
	44,560	37,300	27,280	14,000		44,560	37,300	27,280	14,000

Balance Sheet
Liabilities		Amount	Assets		Amount
Creditors		11,000	Land & Building		65,000
Bills Payable		6,000	Furniture		6,600
Outstanding repair expenses		4,225	Subodh’s current A/c		840
Capital Account			Stock		27,000
Ajay	44,560		Sundry Debtors		26,500
Vijay	34,375		Cash(1000+14,000)		16,340
Kamal	27,280		Input CGST		250
Subodh	14,000	1,20,215	Input CGST		250
		1,41,440			1,41,440

WORKING NOTES :

Total goodwill of the firm = Rs.8,400

 

New partner’s share =	=	1	X	8,400
		10
	=	840		Not brought in cash

Comment if you have any questions.

Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

• Chapter No. 1 – Accounting Not for Profit Organisations
• 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)
• 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)
• Chapter No. 8 – Company Accounts (Share Capital)
• Chapter No. 9 – Company Accounts (Issue of Debentures)
• Chapter No. 10 – Company Accounts (Redemption of Debentures)

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

• Chapter No. 1 – Financial Statements of a Company
• Chapter No. 2 – Financial Statement Analysis
• Chapter No. 3 –  Tools of Financial Statement Analysis- Comparative and Common Size
• Chapter No. 4 – Ratio Analysis
• Chapter No. 5 – Cash Flow Statement

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