Question 63 Chapter 5 of +2-Part-1
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 | |
| A | 70,000 | Furniture | 30,000 |
| B | 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
- 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
