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Question 59 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 59 Chapter 5 of +2- Part-
Q-59. - CH-2 - Usha +2 Book 2018 - Solution

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Question 59 Chapter 5 of +2-Part-1

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59. (Adjustment of the capital on the basis of NPS ) a & b sharing profit in the proportion of three fourth showed the following as their balance sheet on 31ST MARCH, 2018

Liabilities    Rs Assets Rs
Creditors   37,500 Cash at bank 22,500
General Reserve    4,000 Bills receivable 3,000
Capital Accounts     Debtors 16,000
A 30,000   Stock 20,000
B 16,000 46,000 Office Furniture 1,000
      Land & Building 25,000
    87,500   87,500

They admit C into the partnership on 1st April 2018 on the following terms:
1. That C pays Rs. 10,000 as his capital for a fifth share in the future profits.
2. That goodwill account is valued at Rs. 20,000.
3. That furniture is reduced by 10% and a reserve for doubtful debts be created at 5% on debtors.
4. That the value of land and building be appreciated by 20%.
5. That the capital accounts of all the partners be readjusted on the basis of their profit-sharing arrangements and additional amounts be debited or credited to their current accounts.
6. Interest payable is Rs. 2,000.
Open the necessary accounts to give effect to the above-mentioned items and also give the opening balance sheet of the new firm.

We are providing a solution of Question 59 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:

1. Check out the Solution of this question in Video Format:-

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The video consists solution of question numbers from 59 to 60 Chapter no. 5 class 12 of Usha publication. To check the direct solution of question no. 59 from the following video by using time stamps of the video.

2. Check out the Solution of this question in Article Format:-

The solution of Question 59 Chapter 5 of +2 Part-1: –

Revaluation account
Particulars
Amount Particulars Amount
To Stock A/c   100 By Land & Buildings A/c   5,000
To Reserve of doubtful debts   800      
To Interest payable A/c   2,000      
           
To Profit on revaluation transferred to Capital accounts        
A 3/4 1,575        
B 1/4 525 2,100      
    5,000     5o,000
Partners’ Capital Account 
Particulars A B  C Particulars A B C
To Current A/c 7,575 8,525   By Balance b/d 30,000 16,000  
        By Bank A/c     10,000
        By C’s Current A/c 3,000 1,000  
        By Revaluation A/c 1,575 525  
        By General reserve 3,000 1,000  
To Balance c/d 30,000 10,000 10,000        
  37,575 18,525 10,000   37,575 18,525 10,000

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Balance Sheet
Liabilities
Amount Assets Amount
Creditors   37,500     32,500
Capital Accounts       16,000  
A 30,000     800 15,200
B 10,000       3,000
C 10,000       20,000
Current Accounts         900
A 7,575       30,000
B 8,525 16,100     4,000
Outstanding interest   2,000      
    1,05,600     1,05,600

WORKING NOTES :

1. Calculation of new profit share ratio
Let total profits of the firm = Re 1

Share of profit acquired by C = 1
5
Remaining share (Joint share of A and B) = 1 1
5
         
  = 4    
  5    
A‘s new share = 3 x 4
4 5
         
  = 3    
  5    
B‘s new share = 1 x 4
4 5
         
  = 1    
  5    

New profit sharing ratio = 3: 1: 1
PARTNER’S CAPITALS IN THE NEW FIRM ARE = Rs. ( 30,000 : 10,000 : 10,000)

2. SACRIFICING RATIO

A = 3 3
4 5
         
  = 3    
  20    

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B = 1 1
4 5
         
  = 1    
  20    

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Sacrificing ratio = 1 : 1

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
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

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