Question 61 Chapter 5 of +2- Part-

Question 61 Chapter 5 of +2-Part-1

61. ( Capital to be adjusted on basis of New Partner’s Share) A & B are partners in the firm sharing profit & losses in the ratio 3: 2. their balance sheet on 1st, January , 2018 was as follows :

Liabilities Rs.Assets Rs.
Sundry Creditors 15,000Pant 30,000
Capital A/c Patents 10,000
A                                30,000 Stock 20,000
B                                25,000 Debtors  18,000
 55,000Cash 2,000
General reserve   
 80,000 80,000

C is admitted as a partner on the above date on the following terms: (1) He will pay Rs. 10,000 as goodwill for one-fourth share in the profits of the firm.
(ii) The assets are to be valued as under . Plant at Rs. 32,000; Stock at Rs. 18,000; Debtors at book figure less a provision of 5per cent for doubtful debts.
(iii) It was found that creditors included a sum of Rs. 1,400 which was not to be paid. But it was also found that there was a liability for compensation to workers amounting to Rs. 2,000.
(iv) C was to introduce 20,000 as capital and the capitals of the other partners were to be adjusted in the new profit sharing ratio. For this purpose, current accounts were to be opened. Give journal entries to record the above and balance sheet after C’s admission (ledger accounts are not required).

The solution of Question 61 Chapter 5 of +2 Part-1: –

 Bank A/cDr. 30,000 
 To C’s capital A/c.  20,000
  To Premium A/c   10,000
 (Being amount brought in by C as his capital and share of goodwill)   
 Premium A/cDr. 10,000 
 To A’s Capital A/c.  6,000
 To B’s Capital A/c   4,000
 (Being amount of goodwill transferred to the capital amount of old partners in the ratio of their sacrifice i.e., 3:2)    
 Revaluation A/cDr. 4,900 
 To workmen’s compensation fund   2,000
 To Stock   900
 To provisional for doubtful debts A/c)   2,000
 (Being decrease in the value of various assets on C’s admission)    
 Plant A/cDr. 2,000 
 Sundry creditorsDr. 1,400 
 To profit & loss management A/c   3,400
 (Being the increase in the value of plant & decrease in the value of liabilities on C’s admission )    
 A’s Capital A/cDr. 900 
 B’s Capital A/cDr. 400 
 To profit & loss management A/c   1,500
 (Being the profit on revaluation transferred to capital A/c of the old partners in the old sharing ratio )    
 General reserveDr. 10,000 
 To A’s capital A/c   6,000
 To B’s Capital A/c   4,000
 (Being profit on revaluation distributed )    
 A’s capital A/cDr. 5,100 
 To A’s current A/c   5,100
 (Being GENERAL RESERVE distributed )    
 B’s capital A/cDr. 8,400 
 To B’s current A/c   8,400
 (Being excess of the capital A/c transferred to the current A/c    
Balance Sheet
Sundry Creditors 50,000Cash at bank 32,000
Workmen’s compensation fund  Debtors18,000 
Capital A/c s  Less reserve for doubtful debts90017,100
A5,100 Stock 18,000
B8,40013,500Patents 10,000
Current A/c  Plants 32,000
  1,09,100  1.90,100

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 - Question 61 Chapter 5 of +2 Part-1 - USHA Publication 12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

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