Question 62 Chapter 5 of +2- Part-

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. 
Creditors86,000Cash in hand77,000
Employ provident fund10,000Debtors                          42,000 
Investment fluctuation fund4,000Less provision for doubtful debts          7,00035,000
Capitals Investments 21,000
Raghu                          1,19,000 Buildings 98,000
Rishu                           1,12,0002,31,000Pant & 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.

The solution of Question 62 Chapter 5 of +2 Part-1: –

Revaluation account
Particulars
AmountParticularsAmount
To Machinery A/c 3,400By 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 3/520,400    
Rishu 2/513,60034,000   
  37,400  37,400
Partners’ Capital Account 
ParticularsRaghuRishu Rishabh ParticularsRaghuRishu Rishabh
To Cash46,00083,500 By Balance b/d1,19,0001,12,000 
    By Cash A/c  50,000
    By investment fund A/c2,4001,600 
    By Revaluation A/c
(Profit)
20,40013,600 
    By Goodwill4,2006,300 
To Balance c/d 1,00,00050,00050,000    
 1,46,0001,33,50050,000 1,46,0001,33,50050,000
Balance Sheet
Liabilities
AmountAssetsAmount
Creditors(86000-10800) 75,200Cash at bank(77000+50000
+10500-46000-83500)
 8,000
Employee’s provident fund 10,000Debtors 42,000
Capital Accounts  Investment 21,000
Raghu1,00,000 Building 1,71,600
Rishu50,000 Machinery 96,600
Rishabh50,0002,00,000   
      
  2,85,000  2,85,000

WORKING NOTES :

1. Goodwill to be brought in by Rishabh

Total goodwill of the firm = Rs 42,000

Rishabh’s share in goodwill=42,000X1
4
     
 =10,500  

2. Sacrificing ratio :

Raghu=32
54
     
 =2  
 20  
Rishu=21
54
     
 =3  
 20  

New profit sharing ratio = 2 : 3
3. employee’s provided fund is in external liability hence will not be transferred to
capital A/c

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 62 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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