Advertisement
Question 60 Chapter 5 of +2-Part-1
Advertisement
60. (Adjustment of Capital on basis of New Partner’s Share) A, B and C trading in partnership and sharing profits and losses in the proportion of 1/2, 1/3 and 1/6 respectively desire to keep up a working partner when their Balance Sheet stood as follows:
Liabilities | Rs. | Assets | Rs. | |
Creditors | 50,000 | Cash in hand | 8,000 | |
Capital A/c | Debtors | 2,52,000 | ||
A | 5,70,000 | Stock | 2,90,000 | |
B | 3,20,000 | Machinery | 70,000 | |
C | 1,60,000 | 10,50,000 | Land & Building | 4,80,000 |
11,00,000 | 11,00,000 |
They agreed to admit D into partnership and give him a share of 10 paise in the following terms
(a) That D should bring in Rs. 30,000 as goodwill and Rs. 1,28,000 as his capital.
(b) That machinery is depreciated by 12%.
(c) That stock is depreciated by 10%.
(d) That a reserve of 5% be created for doubtful debts. (That the value of land and building be brought up to Rs. 6,00,000.
(e) That after making the above adjustments the capital accounts (who continue to share in the same proportions as before) be adjusted on the of the old partners’ basis of the proportion of D’s capital to his share in the business, (i.e. actual cash to be paid off or to be brought in by old partners, as the case may be.)
(g) Prepaid salaries is Rs. 20,000.
Pass journal entries to give effect to the above and prepare the balance sheet of the firm as newly constituted. Show your work regarding the determination of the new profit sharing ratio of the partners.
We are providing a solution of Question 60 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. 60 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 60 Chapter 5 of +2 Part-1: –
Revaluation account | |||||
Particulars | Amount | Particulars | Amount | ||
To machinery | 8,400 | By Land & Building | 1,20,000 | ||
To Stock | 29,000 | By Prepaid salaries | 20,000 | ||
To provisional for doubtful debts | 12,600 | ||||
To Profit on revaluation transferred to Capital accounts | |||||
A | 45,000 | ||||
B | 30,000 | ||||
C | 15,000 | 90,000 | |||
1,40,000 | 1,40,000 |
A’s capital account | |||||
Particulars | Amount | Particulars | Amount | ||
To Bank Account | 8,400 | By Balance b/d | 5,70,000 | ||
To Balance c/d | 29,000 | By Revaluation Account | 45,000 | ||
By Premium Account | 15,000 | ||||
1,40,000 | 1,40,000 |
A’s capital account | |||||
Particulars | Amount | Particulars | Amount | ||
To Bank Account | 54,000 | By Balance b/d | 5,70,000 | ||
To Balance c/d | 5,76,000 | By Revaluation Account | 45,000 | ||
By Premium Account | 15,000 | ||||
6,30,000 | 6,30,000 |
B’s capital account | |||||
Particulars | Amount | Particulars | Amount | ||
To Balance c/d | 3,84,000 | By Balance b/d | 3,20,000 | ||
By Revaluation Account | 30,000 | ||||
By Premium Account | 6,000 | ||||
By Bank Account | 24,000 | ||||
3,84,000 | 3,84,000 |
C’s capital account | |||||
Particulars | Amount | Particulars | Amount | ||
To Balance c/d | 1,92,000 | By Balance b/d | 1,60,000 | ||
By Revaluation Account | 5,000 | ||||
By Premium Account | 15,000 | ||||
By Bank Account | 12,000 | ||||
1,92,000 | 1,92,000 |
C’s capital account | |||||
Particulars | Amount | Particulars | Amount | ||
To Balance c/d | 1,28,000 | By Bank Account | 1,28,000 | ||
Advertisement-Y
Balance Sheet | |||||
Liabilities | Amount | Assets | Amount | ||
Creditors | 50,000 | Cash in hand | 8,000 | ||
Capital Accounts | Debtors | 2,52,000 | |||
A | 5,76,000 | Less reserve for doubtful debts | 12,600 | 2,39,000 | |
B | 3,84,000 | Cash at bank | 1,40,000 | ||
C | 1,92,000 | 12,50,000 | Prepaid salaries | 20,000 | |
D | Stock | 2,61,000 | |||
Machinery | 61,000 | ||||
Land & Building | 6,00,000 | ||||
13,00,000 | 13,00,000 |
Advertisement-X
WORKING NOTES :
1. Calculation of New profit sharing Ratio
D’s share | = | 1 |
10 |
Balance profit | = | 1 | – | 1 |
10 | ||||
= | 9 | |||
10 |
A‘s share | = | 9 | x | 3 |
10 | 6 | |||
= | 9 | |||
20 |
B‘s share | = | 9 | x | 2 |
10 | 6 | |||
= | 3 | |||
20 |
B‘s share | = | 9 | x | 1 |
10 | 6 | |||
= | 3 | |||
20 |
New profit sharing ratio = 9 : 6 : 3 : 2
2. The Total Capital on the basis of D’s Capital = Rs.1,28,000X 10 = Rs. 12,80,000
2. SACRIFICING RATIO
A’s capital | = | 12,80,000 | x | 9 |
20 | ||||
= | 5,76,000 |
B’s capital | = | 12,80,000 | x | 6 |
20 | ||||
= | 3,84,000 |
Advertisement-Y
C’s capital | = | 12,80,000 | x | 3 |
20 | ||||
= | 1,92,000 |
3. Calculation of cash at bank
C’s capital account | |||||
Particulars | Amount | Particulars | Amount | ||
To D’s capital A/c | 1,28,000 | By A’s capital Account | 54,000 | ||
To Premium Account | 30,000 | By Balance c/d | 1,40,000 | ||
To B’s capital A/c | 24,000 | ||||
To C’s capital A/c | 12,000 | ||||
1,94,000 | 1,94,000 |
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
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
1 Comment