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Question 58 Chapter 5 of +2-Part-1
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58. (Adjustment of capital on the basis of NPS) The following is the balance sheet of A , B & C sharing profits & losses in the ratio 6/25, 5/15 & 3/14 :
| Liabilities | Rs | Assets | Rs |
| Creditors | 9,000 | Land & Building | 24,000 |
| Bills payable | 3,000 | Furniture | 3,500 |
| Capital Accounts | Stock | 14,000 | |
| A | 19,000 | Debtors | 12,600 |
| B | 16,000 | Cash | 900 |
| C | 8,000 | ||
| 55,000 | 55,000 |
They agreed to take D into partnership and give him a share of 1/8th in the rupee on the following terms:
(a) that D should bring in Rs. 4,200 as goodwill and Rs. 7,000 as his capital.
(b) that furniture is depreciated by 12%.
(c) that stock is valued at 90%.
(d) that a reserve of 5% is created for doubtful debts.
(e) that the value of land and buildings have appreciated being brought up to Rs. 31,000.
(f)that after making the above adjustments the capital accounts of the old partners (who continue to share in the same proportion as before) be adjusted on the basis of the proportion of D’s capital to his share in the business i.e. actual cash to paid off to or brought in by the old partners, as the case may be.
Prepare cash account, Profit and loss adjustment account, and the balance sheet of the new firm.
We are providing a solution of Question 58 Chapter 5 of +2 Part-1 in two formats. one is in Video format and another is in article format. Check out both formats as follows:
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The video consists solution of question numbers from 58 Chapter no. 5 class 12 of Usha publication. To check the direct solution of question no. 58 from the following video by using time stamps of the video.
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2. Check out the Solution of this question in Article Format:-
The solution of Question 58 Chapter 5 of +2 Part-1: –
| Profit & Loss adjustment account | |||||
| Particulars | Amount | Particulars | Amount | ||
| To Furniture | 420 | By Land & Buildings A/c | 7,000 | ||
| To Stock | 1,400 | ||||
| To Provision for doubtful debts | 630 | ||||
| To Profit on revaluation transferred to Capital accounts | |||||
| A | 1,950 | ||||
| B | 1,625 | ||||
| C | 975 | 4,550 | |||
| 7,000 | 7,000 | ||||
| Cash account | |||||
| Particulars | Amount | Particulars | Amount | ||
| To Balance b/d | 900 | By A’s Capital A/C | 1,750 | ||
| To D’s Capital A/C | 7,000 | By B’s Capital A/C | 1,625 | ||
| To Premium for Goodwill A/c | 4,200 | By Balance c/d | 9,350 | ||
| To C’s Capital A/C | 625 | ||||
| 12,725 | 12,725 | ||||
| Balance Sheet | |||||
| Liabilities | Amount | Assets | Amount | ||
| Creditors | 9,000 | Cash | 9,350 | ||
| Bills Payable | 3,000 | Debtors | 12,600 | ||
| Less reserve for doubtful debts | 630 | 11,970 | |||
| Capital Account | Stock | 12,600 | |||
| A | 21,000 | Land & Building | 3,080 | ||
| B | 17,500 | Furniture | 31,000 | ||
| C | 10,500 | ||||
| D | 7,000 | 56,000 | |||
| 68,000 | 68,000 | ||||
WORKING NOTES :
D’s capital = Rs. 7,000
Total Capital on the basis of D’s Capital = Rs.7,000X 8 = Rs. 56,000
New ratio of A : B : C 😀 was 6 : 5: 3 : 2
| A’s new capital | = | 6 | X | 56,000 |
| 16 | ||||
| = | 21,000 |
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| B’s new capital | = | 5 | X | 56,000 |
| 16 | ||||
| = | 17,500 |
| C’s new capital | = | 3 | X | 56,000 |
| 16 | ||||
| = | 10,500 |
| D’s capital | = | 2 | X | 56,000 |
| 16 | ||||
| = | 7,000 |
| A’s capital account | |||||
| Particulars | Amount | Particulars | Amount | ||
| To Cash Account | 1,750 | By Balance b/d | 19,000 | ||
| To Balance c/d | 21,000 | By Revaluation Account | 1,950 | ||
| By Premium Account | 1,800 | ||||
| 22,750 | 22,750 | ||||
| B’s capital account | |||||
| Particulars | Amount | Particulars | Amount | ||
| To Cash Account | 1,625 | By Balance b/d | 16,000 | ||
| To Balance c/d | 17,500 | By Revaluation Account | 1,625 | ||
| By Premium Account | 1,500 | ||||
| 19,125 | 19,125 | ||||
| C’s capital account | |||||
| Particulars | Amount | Particulars | Amount | ||
| To Balance c/d | 10,500 | By Balance b/d | 8,000 | ||
| By Revaluation Account | 925 | ||||
| By Premium Account | 900 | ||||
| By Cash Account | 625 | ||||
| 10,500 | 10,500 | ||||
| D’s capital account | |||||
| Particulars | Amount | Particulars | Amount | ||
| To Balance c/d | 7,000 | By Bank Account | 7,000 | ||
Calculation of new profit share ratio
Assuming total profits of the firm = 1
| Share of profit acquired by D | = | 1 |
| 8 |
| Remaining share (Joint share of A, B & C) | = | 1 | – | 1 |
| 8 | ||||
| = | 7 | |||
| 8 |
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Old Ratio = 6 : 5 : 3
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| A’s new share | = | 7 | x | 6 |
| 8 | 14 | |||
| = | 6 | |||
| 16 |
| B‘s new share | = | 7 | x | 5 |
| 8 | 14 | |||
| = | 5 | |||
| 16 |
| C‘s new share | = | 7 | x | 3 |
| 8 | 14 | |||
| = | 3 | |||
| 16 |
| C’s share | = | 1 | or | 2 |
| 8 | 16 |
New profit sharing ratio = 6 : 5 : 3 : 2
Comment if you have any questions.
End of Solution
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Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum
Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)
Chapter No. 2 – Partnership Accounts – I (Introduction)
Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
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Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 1 Class 12 by Unimax Publication
- Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
- Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
- Chapter No. 3 – Partnership Accounts – II (Goodwill)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Check out Part 2 of both books.
In Class 12th the accountancy has 2 books i.e. Part 1 and Part 2. The Books related to the Part 1 are shown above. but If you want to know more about Part 2, you can check it out from the following links. We have provided the links to both books i.e. Accountancy Part 2 by Usha Publication and Advanced Accountancy Part 2 by Unimax Publication.
1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
2. Advanced Accountancy Part 2 Class 12 by Unimax Publication
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