Question 67 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 67 Chapter 5 of +2-A

Question 67 Chapter 5 of +2-A

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

 

Partners’ Capital Account
the year ended 31st March, 2019

Parti
culars
Madhu Vidhi Gayat

Partic
ulars

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
  = 2
  10

 

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)

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

 

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2 Book 1 min - Question 67 Chapter 5 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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