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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:-
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 | ||
| 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 | ||||
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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 |
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| 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 |
| B | = | 1 | – | 1 |
| 4 | 5 | |||
| = | 1 | |||
| 20 |
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
- Chapter No. 1 – Accounting Not for Profit Organisations
- 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)
- 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)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
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