Question 68 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 68 Chapter 5 of +2-A

Question 68 Chapter 5 of +2-A

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
lal

Sanjay Shan
ker

Partic
ulars

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

 

 

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
   

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)

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 68 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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