Question 57 Chapter 5 – Unimax Class 12 Part 1 – 2021

question 57 -UNIMAX

Question 57 Chapter 5 – Unimax Class 12 Part 1 – 2021

Free Accounting book Solution - Class 11 and Class 12

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 :

  1. Mittal will bring Rs. 6000 as Capital and Rs. 3000 for goodwill in cash.
  2. Investment were to decreased by Rs. 450 and Stock was to be decreased by Rs. 870.
  3. 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  (Being capital withdrawn by old partner)        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

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

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 Types

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

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

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

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

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