Question 61 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1

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	15,000	Pant	30,000
Capital A/c		Patents	10,000
A                                30,000		Stock	20,000
B                                25,000		Debtors	18,000
	55,000	Cash	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: –

Journal
Date	Particulars		L.F.	Debit	Credit
	Bank A/c	Dr.		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/c	Dr.		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/c	Dr.		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/c	Dr.		2,000
	Sundry creditors	Dr.		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/c	Dr.		900
	B’s Capital A/c	Dr.		600
	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 reserve	Dr.		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/c	Dr.		5,100
	To A’s current A/c				5,100
	(Being GENERAL RESERVE distributed )
	B’s capital A/c	Dr.		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
Liabilities		Amount	Assets		Amount
Sundry Creditors		13600			32,000
Workmen’s compensation fund			Debtors	18,000
Capital A/c s			Less reserve for doubtful debts	900	17,100
A	5,100		Stock		18,000
B	8,400	13,500	Patents		10,000
Current A/c			Plants		32,000
A	36,000
B	24,000
C	20,000	80,000
		1,09,100			1,09,100

Comment if you have any questions.

Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

• 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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