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Question 68 Chapter 5 of +2-A
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68. Shyamlal and Sanjay were in partnership business sharing profits and losses in the ratio of 2 : 3 respectively. Their Balance Sheet as at 31st March, 2019 was:
| Liabilities | Assets | |||
| Sundry Creditors | 12,435 | Cash in Hand | 710 | |
| Capital A/cs: | Cash at Bank | 11,925 | ||
| Shyamlal | 34,050 | Sundry Debtors | 5,500 | |
| Sanjay | 34,050 | 68,100 | Stock | 18,000 |
| Furniture | 4,400 | |||
| Building | 40,000 | |||
| 80,535 | 80,535 |
On 1st April, 2019, they admitted Shanker into partnership for 1/3rd share in future profits on the following terms:
(a) Shanker is to bring in 30,000 as his capital and 20,000 as goodwill which is to remain in the business.
(b) Stock and Furniture are to be reduced in value by 10%.
(c) Building is to be appreciated by 15,000.
(d) Provision of 5% is to be made on Sundry Debtors for Doubtful Debts.
(e) Unaccounted Accrued Income of 2,400 to be provided for. A debtor, whose dues of 4,800 were written off as bad debts, paid 50% in full settlement
(f) Outstanding Rent amounted to 4,800. Show Profit and Loss Adjustment Account (Revaluation Account), Capital Accounts of Partners and opening Balance Sheet of the new firm.
The solution of Question 68 Chapter 5 of +2-A: –
| Revaluation Account | |||||
| Liabilities | Amount | Assets | Amount | ||
| Stock | 1,800 | By Building | 15,000 | ||
| Furniture | 440 | By Accrued Income | 2,400 | ||
| Provision for Doubtful Debts | 275 | By Bad Debts Recovered | 2,400 | ||
| Outstanding Rent | 4,800 | ||||
| Revaluation Profit | |||||
| Shyamlal Capital | 4,994 | ||||
| Sanjay Capital | 7,491 | 12,485 | |||
| 19,800 | 19,800 | ||||
| Partners’ Capital Account the year ended 31st March, 2019 | |||||||
| Parti culars | Shyam | Sanjay | Shan ker | Partic | Shyam lal | Sanjay | Shan ker |
| By Balance B/d | 34,050 | 34,050 | – | ||||
| By Cash A/c | – | – | 30,000 | ||||
| By Premium for GoodwillA/c | 8,000 | 12,000 | – | ||||
| By RevaluationA/c | 4,994 | 7,491 | – | ||||
| To Balance c/d | 47,044 | 53,541 | 30,000 | ||||
| 47,044 | 53,541 | 30,000 | 47,044 | 53,541 | 30,000 | ||
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| Balance Sheet | |||||
| Liabilities | Amount | Assets | Amount | ||
| Sundry Creditors | 12,435 | Cash in Hand | (710 + 50,000 + 2,400) | 53,110 | |
| Sundry Debtors | 5,500 | ||||
| Capital: | Less: Provision for Doubtful Debt | 275 | 5,225 | ||
| Shyamlal | 47,044 | Stock | (18,000 – 1,800) | 16,200 | |
| Sanjay | 53,541 | Building | (40,000 + 15,000) | 55,000 | |
| Sanja | 30,000 | 14,15,000 | Furniture | (4,400 – 440) | 3,960 |
| Outstanding Rent | 4,800 | Accrued Income | 2,400 | ||
| Cash at Bank | 11,925 | ||||
| 1,47,820 | 1,47,820 | ||||
Working Note:-
Sacrificing Ratio of Shyamlal And Sanjay= 2 : 3
Distribution of Premium for Goodwill (in sacrificing ratio)
| Shyamlal will get | = | 20,000 | X | 2 |
| 5 | ||||
| = | 8,000 |
| Sanjay will get | = | 20,000 | X | 3 |
| 5 | ||||
| = | 12,000 |
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Distribution of Profit from Profit and Loss Adjustment Account (in old ratio)
| Shyamlal will get | = | 12,485 | X | 2 |
| 5 | ||||
| = | 4,994 |
| Sanjay will get | = | 12,485 | X | 3 |
| 5 | ||||
| = | 7,491 |
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
