# Question 57 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question No.57 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

Question 57 Chapter 5 of +2-A

57. X, Y and Z are partners sharing profits and losses in the ratio of 6 : 3 : 1. They admitted W into  partnership with effect from 1st April, 2019. New profit-sharing ratio between X, Y, Z and W was agreed to be 3 : 3 : 3 : 1. They also decide to record the effect of the following revaluations without affecting the book values of the assets and liabilities by passing an adjustment entry:

 Book Values ( ) Revised Values ( ) Plant and Machinery 3,50,000 3,40,000 Land and Building 5,00,000 5,50,000 Trade Creditors 1,00,000 90,000 Outstanding Expenses 85,000 1,00,000

## The solution of Question 57 Chapter 5 of +2-A: –

 Date Particulars L.F. Debit Credit Z’s Capital A/c Dr 7,000 W’s Capital A/c Dr 3,500 To X’s Capital A/c 10,500 (Being adjustment entry made)

Working Note: –

Calculation of Provision for Doubtful Debts
Provision is always created on the Closing balance of Debtors

 Gain/Loss = Land & Building + Trade Creditors – Plant & Machinery – Outstanding Expenses
 =50,000 + 10,000- 10,000 – 15,000 =35,000
 Total Provision For D/D = Closing balance of Debtors X Percentage of  Provision
 = 70,000 X 5% = 3,500
 New Provision For D/D = Total Provision – (Old Provision – Bad Debts)
 = 3,500 – (8,000-6,000) = 3,500 – 2,000 = 1,500
 Old Ratio of X, Y and Z = 6 : 3 : 1 New Ratio of X, Y, Z and W = 3 : 3 : 3 : 6

Sacrificing Share = Old Ratio – New Ratio

 X’s Sacrificing/Gaining Share = 6 – 3 10 10
 = 6 – 3 10
 = 3 Sacrifice 10

 Y’s Sacrificing/Gaining Share = 3 – 3 10 10
 = 3 – 3 10
 = 0 10

 Z’s Sacrificing/Gaining Share = 1 – 3 10 10
 = 1 – 3 10
 = -2 Gain 10

 W’s Sacrificing/Gaining Share = 1 10

 X will Get from Z & W = 35,000 X 3 10 = 10,500

 Z will pay to X = 35,000 X 2 10 = 7,000

 W will pay to X = 35,000 X 1 10 = 3,500

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
• Chapter No. 3 – Goodwill: Nature and Valuation
• Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 – Admission of a Partner
• Chapter No. 6 – Retirement/Death of a Partner
• Chapter No. 7 – Dissolution of a Partnership Firm

### T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

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

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