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Question 67 Chapter 5 of +2-A
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67. The Balance Sheet of Madhu and Vidhi who are sharing profits in the ratio of 2 : 3 as at 31st March, 2016 is given below:
| Liabilities | Assets | |||
| Madhu’s Capital | 5,20,000 | Land and Building | 3,00,000 | |
| Vidhi’s Capital | 3,00,000 | Machinery | 2,80,000 | |
| General Reserve | 30,000 | Stock | 80,000 | |
| Bills Payable | 1,50,000 | Debtors | 3,00,000 | |
| Less: Provision | 10,000 | 2,90,000 | ||
| Bank | 50,000 | |||
| 10,00,000 | 10,00,000 |
Madhu and Vidhi decided to admit Gayatri as a new partner from 1st April, 2016 and their new profit-sharing ratio will be 2 : 3 : 5. Gayatri brought 4,00,000 as her capital and her share of goodwill premium in cash. (a) Goodwill of the firm was valued at 3,00,000. (b) Land and Building was found undervalued by 26,000. (c) Provision for doubtful debts was to be made equal to 5% of the debtors. (d) There was a claim of 6,000 on account of workmen compensation. Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm
The solution of Question 67 Chapter 5 of +2-A: –
| Revaluation Account | |||||
| Liabilities | Amount | Assets | Amount | ||
| Provision for Doubtful Debts | 5,000 | Land &Building | 26,000 | ||
| Claim against Workmen Compensation | 6,000 | ||||
| Capital: | |||||
| Revaluation Profit | |||||
| Madhu’s Capita | 6,000 | ||||
| Vidhi’s Capital | 9,000 | 15,000 | |||
| 26,000 | 26,000 | ||||
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| Partners’ Capital Account the year ended 31st March, 2019 | |||||||
| Parti culars | Madhu | Vidhi | Gayat | Partic | Madhu | Vidhi | Gayat |
| By Balance B/d | 5,20,000 | 3,00,000 | – | ||||
| By Cash A/c | – | – | 4,00,000 | ||||
| By General ReserveA/c | 12,000 | 18,000 | – | ||||
| By Premium for GoodwillA/c | 60,000 | 90,000 | – | ||||
| By RevaluationA/c | 6,000 | 9,000 | – | ||||
| To Balance c/d | 5,98,000 | 4,17,000 | 4,00,000 | ||||
| 5,98,000 | 4,17,000 | 4,00,000 | 5,98,000 | 4,17,000 | 4,00,000 | ||
| Balance Sheet | |||||
| Liabilities | Amount | Assets | Amount | ||
| Bills Payable | 1,50,000 | Bank | (50,000 + 4,00,000 + 1,50,000) | 6,00,000 | |
| Claim for Workmen Compensation | 6,000 | Sundry Debtors | 3,00,000 | ||
| Capital: | Less: Provision for Doubtful Debt | 15,000 | 2,85,000 | ||
| Madhu | 5,98,000 | Stock | 80,000 | ||
| Vidhi | 4,17,000 | Machinery | 2,80,000 | ||
| Gayatri | 4,00,000 | 14,15,000 | Land &Building | 3,26,000 | |
| 15,71,000 | 15,71,000 | ||||
Working Note:-
Calculation of Gayatri’s Share of Goodwill
| Gayatri’s share | = | 3,00,000 | X | 5 |
| 10 | ||||
| = | 1,50,000 |
New Ratio=Old Ratio – sacrifice Ratio
| Madhu | = | 2 | – | 2 |
| 5 | 10 |
| = | 4 – 2 | |
| 10 |
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| = | 2 | |
| 10 |
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| Vidhi | = | 3 | – | 3 |
| 5 | 10 |
| = | 6 – 3 | |
| 10 |
| = | 3 | |
| 10 |
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
