Question 60 Chapter 5 - Unimax Class 12 Part 1

Question 60 Chapter 5 – Unimax Class 12 Part 1 – 2021

Table of Contents

The solution of Question 60 Chapter 5 – Unimax Class 12 Part 1: –

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

60. A and B are partners sharing profits ratio of 2 : 1. C is admitted into the firm for 1/4th share of profits. C bring Rs. 40000 in respect of his capital. The capitals of old partners after all adjustments is respect of goodwill, revaluation of assets and liabilities etc. have been worked out at Rs. 90000 for A and Rs. 30000 for B. It is agreed that partners’ capitals will be according to the new profit sharing ratio taking C’s Capital as base.Determine the new capitals of A and B and record the necessary Journal entries assuming that the partners whose capital fells short, brings in the amount of deficiency and the partners who has an excess, withdraws the excess amount.

The solution of Question 60 Chapter 5 – Unimax Class 12 Part 1: –

Journal

Date	Particulars		L.F.	Debit	Credit

	Cash A/c	Dr.		40000
	To C’s Capital A/c				40000
	(Being capital introduced by new partner in the business)

	A’s Capital a/c	Dr.		10000
	To Cash a/c				10000
	(Being Capital withdrawn by old partner from the business)

	Cash A/c	Dr.		10000
	To B’s Capital a/c				10000
	(Being capital introduced by old partner into the business)

Working Note:

Calculation of new PSR :

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Calculation of new PSR :
C’s Share = 1/4
Remaining share = 1 – 1/4 – 3/4
A’s new share = 2/3 X 3/4 = 2/4
B’s new share = 1/3 X 3/4 = 1/4
C’s share = 1/4
New PSR = A : B : C = 2 : 1 : 1
Calculation of Capital contribution by old partners :
Total capital of firm = 40000 X 4/1 = Rs. 160000
(Taking C’s capital as base)
(i) A’s required capital = 2/4 X 160000 = Rs. 80000
A’s actual capital = Rs. 90000
So A will withdrawn Rs. 10000 from business.
(ii) B’s required capital = 1/4 X 160000 = Rs. 40000
B’s actual capital = Rs. 30000
So B will introduce Rs. 10000 into business.
(iii) C’s required capital = 1/4 X 160000 = Rs. 40000

What is Partnership – Meaning and Its 4 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)

Chapter No. 1 – Financial Statements of a Company
Chapter No. 2 – Financial Statement Analysis
Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
Chapter No. 4 – Accounting Ratios
Chapter No. 5 – Cash Flow Statement

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

The solution of Question 60 Chapter 5 – Unimax Class 12 Part 1: –

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)

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