Question 62 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 62 Chapter 5 of +2- Part-

Question 62 Chapter 5 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

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.

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 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   Machinery   96,600
Rishabh 50,000 2,00,000      
           
    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 = 42,000 X 1
4
         
  = 10,500    

2. Sacrificing ratio :

Raghu = 3 2
5 4
         
  = 2    
  20    
Rishu = 2 1
5 4
         
  = 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

Leave a Reply

Your email address will not be published. Required fields are marked *