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Question 65 Chapter 5 – Unimax Class 12 Part 1 – 2021
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65. A and B share profits in the proportion of 3 : 1. Their Balance Sheet on 31st December, 2020 was as follows :
| Liabilities | Amount | Assets | Amount |
| Sundry Creditors | 41,500 | Cash at Bank | 26,500 |
| Capital : | B/R | 3,000 | |
| A | 30,000 | Debtors | 16,000 |
| B | 16,000 | Stock | 20,000 |
| Reserve Fund | 4,000 | Fixtures | 1,000 |
| Land and Building | 25,000 | ||
| 91,500 | 91,500 |
On 1st January, 2021, C was admitted into partnership for 1/4th share on the following terms :
- C will bring in proportionate capital.
- Building is to be appreciated by Rs. 7000 and fixture is to be depreciated by Rs. 300.
- The provision for debtors is to be created at the rate of 5%.
- The goodwill of the firm has been valued at Rs. 16400 but C is unable to bring his share of goodwill in cash.
Prepare Revaluation account, Partners’ Capital accounts and the Balance Sheet of the new firm after C’s admission.
The solution of Question 65 Chapter 5 – Unimax Class 12 Part 1: –
Revaluation A/c
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| Particulars | Rs. | Particulars | Rs. | ||
| To Provision for bad debts a/c | 800 | By Building a/c | 7000 | ||
| To Furniture a/c | 300 | ||||
| To Profit on revaluation | |||||
| A (3 : 1) | 4,425 | ||||
| B | 1,475 | 5,900 | |||
| 7,000 | 7000 |
Capital Accounts
| Particulars | A | B | C | Particulars | A | B | C |
| To A’s Capital a/c | – | – | 3,075 | By Balance b/d | 30,000 | 16,000 | – |
| To B’s Capital a/c | – | – | 1,025 | By Reserve Fund a/c | 3,000 | – | – |
| To Balance c/d | 40,500 | 19,500 | 15,900 | By Profit on rev. | 4,425 | – | – |
| By C’s Capital a/c | 3,075 | 1,500 | – | ||||
| By Cash | – | – | 20,000 | ||||
| 40,500 | 19,500 | 20,000 | 40,500 | 19,500 | 20,000 |
Balance Sheet
| Liabilities | Rs. | Assets | Rs. | ||
| Sundry Creditors | 41500 | Bills Receivable | 3000 | ||
| Capital Accounts | Debtors | 16000 | |||
| A | 40500 | Less : Provision | 800 | 15200 | |
| B | 19500 | Cash at Bank (26500 + 20000) | 46500 | ||
| C | 19500 | 75900 | Land and building | 32000 | |
| Stock | 20000 | ||||
| Fixtures | 700 | ||||
| 1,17,400 | 1,17,400 |
Working Note:
(A) Calculation of New partners’ capital :
Total Capital of firm = (A’s capital balance c/d + B’s capital balance c/d) X 4/3 (Reciprocal of combined share)
= (40500 + 19500) X 4/3
Total share of firm = 1
C’s share = 1/4
Combined share of A & B = 1 – 1/4 = 3/4 = 60000 X 4/3 = Rs. 80000
C’s share of capital = 80000 X 1/4= Rs. 20000
What is Partnership – Meaning and Its 4 Types
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T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication