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.
The Content covered in this article:
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
- 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
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
