Question 55 Chapter 5 of +2- 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  RsAssetsRs
Creditors 11,000Land & buildings50,000
Bills Payable 6,000Furniture7,500
Capital Accounts   Stock30,000
Ajay40,000 Debtors26,500
Vijay33,500 Cash1,000
Kamal25,00098,500Input CGST250
   Input SGST250
  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
DateParticulars
L.F.DebitCredit
2019     
1Cash A/cDr. 14,000 
 To Subodh’s Capital A/c   14,000
 (Being capital brought by new partner)   
     
2Revaluation A/cDr. 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)    
      
3Land & Building A/cDr. 15,000 
 To Revaluation A/c   15,000
 (Being revaluation of assets)    
      
4Revaluation A/cDr. 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)    
      
5Subodh’s Current A/cDr. 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
AmountParticularsAmount
To Stock A/c 3,000By 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 2,1009,800   
  15,000  15,000
Partners’ Capital Account  
ParticularsAjayVijayKamalSubodhParticularsAjayVijayKamal
Subodh
     By Balance b/d40,00033,50025,000 
     By Bank A/c   14,000
     By C’s Current A/c4,2002,6252,100 
     By Subodh’s Current A/c360300600 
To Balance c/d 44,56037,30027,28014,000     
 44,56037,30027,28014,000 44,56037,30027,28014,000
Balance Sheet
Liabilities
AmountAssetsAmount
Creditors 11,000Land & Building 65,000
Bills Payable 6,000Furniture 6,600
Outstanding repair expenses 4,225Subodh’s current A/c 840
Capital Account  Stock 27,000
Ajay44,560 Sundry Debtors 26,500
Vijay34,375 Cash(1000+14,000) 16,340
Kamal27,280 Input CGST 250
Subodh14,0001,20,215Input CGST 250
  1,41,440  1,41,440

WORKING NOTES :

Total goodwill of the firm = Rs.8,400

 

New partner’s share ==1X8,400
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

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 - Question 55 Chapter 5 of +2 Part-1 - USHA Publication 12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

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