Question 63 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 63 Chapter 5 of +2- Part-

Question 63 Chapter 5 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

63. (revaluation A/c/Partner’s Cap. A/c/B/S) A & B are partners sharing profits & losses in the ratio 3:2 . Their balance sheet on 31st march ,2015 stood as under :

Liabilities  Rs.  Assets   
Capitals    Machinery 66,00
70,000 Furniture 30,000
60,000 Investment 40,000
Bank Loan  18,000 Debtors 38,000  
Creditors 72,000 Less : provision      4,000 34,000
General reserve  20,000 Cash  24,000
    Stock   
  2,40,000   2,40,000

On this day they admitted C for 25% share in profits on the following terms :
(i) C brings capital proportionate to his share after all adjustments and Rs. 8,000 for goodwill, out of his share of Rs.14,000.
(ii) Depreciate furniture by 10%.
(iii) Half of investments were to be taken over by A and B in their profit sharing ratio and remaining valued at Rs. 26,000.
(iv) New profit sharing ratio will be 3: 3: 2.
Prepare Revaluation Account, Capital Accounts, and Balance Sheet after C’s admission.

The solution of Question 63 Chapter 5 of +2 Part-1: –

Revaluation account
Particulars
Amount Particulars Amount
To Furniture   3,000 By Building A/c   6,000
To Profit on revaluation          
A 3/5 1,800        
B 2/5 1,200 3,000      
    6,000     6,000
Partners’ Capital Account 
Particulars A B C Particulars A B C
To Cash 12,000 8,000   By Balance b/d 70,000 60,000  
        By Cash A/c     49,000
        By Premium A/c 12,600 1,400  
        By Revaluation A/c
(Profit)
1,800 1,200  
        By Goodwill 12,000 8,000  
To Balance c/d 84,400 62,600 49,000        
  96,400 70,600 49,000   96,400 70,600 49,000
Balance Sheet
Liabilities
Amount Assets Amount
Creditors   72,000 Machinery   66,000
Bank loan   18,000 Furniture   27,000
Capital Accounts     Investment   26,000
A 84,400   Stock   46,000
B 62,600   C’s Current Accounts   6,000
C 49,000 1,96,000 Debtors                                 38000               
      Less provision                     4000   34000
      Cash   81,000
    2,86,000     2,86,000

WORKING NOTES :

 Calculation of proportionate capital of C

Let total profits of the firm =  Re 1

Share of profit given to C = 2
8
Combined share of A and B = 1 2
8
         
  = 6    
    8    

Combined capital of A and B for 6/8 profit = Rs. (84,400+62,600) = Rs. 1,47,000

Raghu = Rs. 1,47,000 x 6
8
         
  = Rs 1,96,000    
C’s proportionate capital for 2/8 share = Rs. 1,86,000 x 2
8
         
  = Rs 49,000    

Goodwill Rs. 6,000 not brought in cash by C will be debited to current 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 63 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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