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

Question 55 Chapter 5 of +2-Part-1

45. (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 Content covered in this article:

The solution of Question 55 Chapter 5 of +2 Part-1: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

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

Journal
Date	Particulars		L.F.	Debit	Credit
2019
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