Question 57 Chapter 5 – Unimax Class 12 Part 1 – 2021
57. Gupta, Goel and Garg were partners sharing Profits and Losses in the ratio of 1/2, 1/3 and 1/6 respectively. Their Balance Sheet was as under on 31st December, 2020.
| Liabilities | Amount | Assets | Amount |
| Sundry Creditors | 3,000 | Cash | 2,000 |
| Capital : | Stock | 4,000 | |
| Gupta | 5,000 | Investment | 3,000 |
| Goel | 5,000 | Land | 10,000 |
| Garg | 6,000 | ||
| 19,000 | 19,000 |
On 1st January, 2021, they agreed to admit Mittal for 1/6th share in profits as a new partner on the following terms and conditions :
- Mittal will bring Rs. 6000 as Capital and Rs. 3000 for goodwill in cash.
- Investment were to decreased by Rs. 450 and Stock was to be decreased by Rs. 870.
- Existing parnters’ capital Accounts to be adjusted on the basis of Profit Sharing Ratio of new firm taking Mittal’s capital as base.
You are required to pass necessary Journal Entries and prepare Profit and Loss adjustment (Revaluation) Account, Capital Accounts and Balance Sheet of the firm.
The solution of Question 57 Chapter 5 – Unimax Class 12 Part 1: –
Journal
| Date | Particulars | L.F. | Debit | Credit | |
| Revaluation a/c | Dr. | 1320 | |||
| To Investment A/c | Dr. | 450 | |||
| To Stock A/c | 870 | ||||
| (Being value of assets decreased) | |||||
| Gupta’s Capital a/c | Dr. | 660 | |||
| Goel’s Capital a/c | 440 | ||||
| Garg’s Capital a/c | 220 | ||||
| To revaluation a/c | 1320 | ||||
| (Being loss transferred to old partner’s capital a/c | |||||
| Cash a/c | Dr. | 9000 | |||
| To Mittal’s capital a/c | 6000 | ||||
| To Premium a/c | 3000 | ||||
| (Being capital and goodwill brought by new partner) | |||||
| Premium a/c | Dr. | 3000 | |||
| To Gupta’s Capital a/c | 1500 | ||||
| To Goel’s Capital a/c | 1000 | ||||
| To Garg’s Capital a/c | 500 | ||||
| (Being goodwill credited to old partner’s capital a/c) | |||||
| Cash a/c | Dr. | 13600 | |||
| To Gupta’s Capital A/c | 9160 | ||||
| To Goel’s Capital a/c | 4440 | ||||
| (Being capital brought by old partners) | |||||
| Garg’s Capital A/c | Dr. | 1280 | |||
| To Cash A/c | 1280 | ||||
| (Being capital withdrawn by old partner) |
Revaluation A/c
| Particulars |
Rs. | Particulars |
Rs. | ||
| To Stock a/c | 870 | By Loss on revaluation | |||
| To Investments a/c | 450 | Gupta | 660 | ||
| Goel (3 : 2 : 1) | 440 | ||||
| Garg | 220 | 1320 | |||
| 1320 | 1320 |
Capital Accounts
| Particulars | Gupta | Goel | Garg | Mittal | Particulars | Gupta | Goel | Garg | Mittal |
| To Loss on revaluation | 660 | 440 | 220 | – | By Balance b/d | 5000 | 5000 | 6000 | – |
| To Balance c/d | 15000 | 10000 | 5000 | 6000 | By Cash A/c | – | – | – | 6000 |
| To Cash a/c | 1280 | By Premium A/c | 1500 | 1000 | 500 | – | |||
| By Cash A/c | 9160 | 4440 | – | – | |||||
| 15660 | 10440 | 6500 | 6000 | 15660 | 10440 | 6500 | 6000 |
Balance Sheet
| Liabilities |
Rs. | Assets |
Rs. | |
| Creditors | 3000 | Stock | 3130 | |
| Capital Accounts | Investments | 2550 | ||
| Gupta | 15000 | land | 10000 | |
| Goel | 10000 | Cash (2000 + 6000 + 3000 + 9160 +4440 -1280) | 23320 | |
| Garg | 5000 | |||
| Mittal | 6000 | 36000 | ||
| 39000 | 39000 |
Working Note:
(A) Calculation of new PSR
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Let Total Profit = 1
Mittal’s share = 1/6
Remaining share = 5/6
Gupta’s new share = 1/2 X 5/6 = 5/12
Goel’s new share = 1/3 X 5/6 = 5/18
Garg’s new share = 1/6 X 5/6 = 5/36
Mittal’s share = 1/6
New PSR = 15 : 10 : 5 : 6
(B) Calculation of old partners’ adjustment capital :
Total Capital of firm = 6000 X 6/1 = 36000
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Gupta’s adjusted capital = 36000 X 15/36 = Rs. 15000
Goel’s adjusted capital = 36000 X 10/36 = Rs. 10000
Garg’s adjusted capital = 36000 X 5/36 = Rs. 5000
Mittal’s capital = Rs. 6000
What is Partnership – Meaning and Its 4 Types
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. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication