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

Question 61 Chapter 5 of +2- Part-

Question 61 Chapter 5 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

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

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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