Question 62 Chapter 5 of +2-Part-1
62. (Adjustment of the capital/goodwill/revaluation A/c/ partner’s capital A/c balance sheet) Raghu & Rishu are partners sharing profits in the ratio 3:2. their balance sheet as on 31st march , 2017 was as at follows :
| Liabilities | Rs. | Assets | Rs. |
| Creditors | 86,000 | Cash in hand | 77,000 |
| Employ provident fund | 10,000 | Debtors 42,000 | |
| Investment fluctuation fund | 4,000 | Less provision for doubtful debts 7,000 | 35,000 |
| Capitals | Investments | 21,000 | |
| Raghu 1,19,000 | Buildings | 98,000 | |
| Rishu 1,12,000 | 2,31,000 | Pant & machinery | 1,00,000 |
| 3,31,000 | 3,31,000 |
Rishabh was admitted on that date for th share of profit on the following terms:
(a) Rishabh will bring Rs. 50,000 as his share of capital.
(b) Goodwill of the firm’s valued at Rs. 42,000 and Rishabh will bring his share of goodwill in cash.
(c) Building were appreciated by 20%. Machinery is depreciated by Rs. 3,400. (d) All debtors were good.
(e) There was a liability of Rs. 10,800 included in creditors which was not likely to arise. .New profit sharing ratio will be 2 1:1.
(g) Capital of Raghu and Rishu will be adjusted on the basis of Rishabh’s share of capital and any excess or deficiency will be made by withdrawing or bringing in cash by the concerned partners as the case may be.
Prepare Revaluation Account, Partner’s Capital Accounts, and the Balance Sheet of the new firm.
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The solution of Question 62 Chapter 5 of +2 Part-1: –
| Revaluation account |
|||||
| Particulars |
Amount | Particulars | Amount | ||
| To Machinery A/c | 3,400 | By Building A/c | 19,600 | ||
| By sundry capitals A/c | 10,800 | ||||
| By provision for doubtful debts A/c | 7,000 | ||||
| To Profit on revaluation | |||||
| Raghu 3/5 | 20,400 | ||||
| Rishu 2/5 | 13,600 | 34,000 | |||
| 37,400 | 37,400 | ||||
| Partners’ Capital Account | |||||||
| Particulars | Raghu | Rishu | Rishabh | Particulars | Raghu | Rishu | Rishabh |
| To Cash | 46,000 | 83,500 | By Balance b/d | 1,19,000 | 1,12,000 | ||
| By Cash A/c | 50,000 | ||||||
| By investment fund A/c | 2,400 | 1,600 | |||||
| By Revaluation A/c (Profit) |
20,400 | 13,600 | |||||
| By Premium for Goodwill | 4,200 | 6,300 | |||||
| To Balance c/d | 1,00,000 | 50,000 | 50,000 | ||||
| 1,46,000 | 1,33,500 | 50,000 | 1,46,000 | 1,33,500 | 50,000 | ||
| Balance Sheet |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Creditors(86000-10800) | 75,200 | Cash at bank(77000+50000 +10500-46000-83500) |
8,000 | ||
| Employee’s provident fund | 10,000 | Debtors | 42,000 | ||
| Capital Accounts | Investment | 21,000 | |||
| Raghu | 1,00,000 | Building | 1,71,600 | ||
| Rishu | 50,000 | Plant & Machinery | 96,600 | ||
| Rishabh | 50,000 | 2,00,000 | |||
| 2,85,200 | 2,85,200 | ||||
WORKING NOTES :
1. Goodwill to be brought in by Rishabh
Total goodwill of the firm = Rs 42,000
| Rishabh’s share in goodwill | = | 42,000 | X | 1 |
| 4 | ||||
| = | 10,500 |
2. Sacrificing ratio :
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| Raghu | = | 3 | – | 2 |
| 5 | 4 | |||
| = | 2 | |||
| 20 |
| Rishu | = | 2 | – | 1 |
| 5 | 4 | |||
| = | 3 | |||
| 20 |
Sacrificing ratio = 2 : 3
3. The employee’s provided fund is in external liability hence will not be transferred to
capital A/c
| Raghu’s Share of Premium for Goodwill | = | 10,500 | x | 2 |
| 5 | ||||
| = | 4,200 |
| Rishu’s Share of Premium for Goodwill | = | 10,500 | x | 3 |
| 5 | ||||
| = | 6,300 |
Calculation of new Capital of of Raghu & Rishu on the basis of Rishabh share of capital :-
Total capital of firm = Rishabh capital X Reverse of share of Rishabh
| Total capital of firm | = | 50,000 | x | 4 |
| 1 | ||||
| = | 2,00,000 |
Now distributed the new capital among old partners in new ratio
| Raghu capital | = | 2,00,000 | x | 2 |
| 4 | ||||
| = | 1,00,000 |
| Rishu capital | = | 2,00,000 | x | 1 |
| 4 | ||||
| = | 50,000 |
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Comment if you have any questions.
End of Solution
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Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum
Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)
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)
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Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 1 Class 12 by Unimax Publication
- Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
- Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
- Chapter No. 3 – Partnership Accounts – II (Goodwill)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
- 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)
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1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
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