Question 68 Chapter 5 of +2-Part-1
68. (Adjustment of the capital/goodwill/revaluation A/c/ partner’s capital A/c balance sheet) The following is the balance sheet as on 31st March , 2015 of A & B, who shares profit & losses in ratio 3:2
|Capital A/c||Plant & Machinery||10,000|
|A||10,000||Land & Buildings||8,000|
|General reserve||15,000||Less: provision 5,100||11,000|
|Workmen’s compensation fund||5,000||Stock||12,000|
They agreed to admit C into partnership on the following terms:
(i) Provision for doubtful debts would be increased by Rs. 2,000.
(ii) The value of land and building would be increased to Rs. 18,000.
(iii) The value of the stock would be increased by Rs. 4,000.
(iv) The liability against Workmen’s Compensation Fund is determined at Rs. 2,000.
(v) C brought in as his share of goodwill Rs.10,000 in cash.
(vi) C would bring further cash as would make his capital equal to 20% of the total capital of the new firm after the above revaluation and adjustments are carried out.
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the firm after C’s admission
The Content covered in this article:
The solution of Question 68 Chapter 5 of +2 Part-1: –
|To Provision for doubtful debts||2,000||By land & buildings||10,000|
|To Profit on revaluation |
transferred to capital A/c
|Partners’ Capital Account|
|To A’s capital A/c||6,000||By Balance b/d||10,000||10,000|
|To B’s Capital A/c||4,000||By General Res. A/c||9,000||6,000|
|By revaluation A/c||7,200||4,800|
|By premium A/c||6,000||4,000|
|By workmen’s C.F.||1,800||1,200|
|By Bank A/c||25,000|
|To Balance c/d||34,000||26,000||15,000|
|Balance Sheet |
|Workmen’s compensation fund||2,000||Cash (9000+25000)||34,000|
|Creditors||10,000||Plant & Machinery||10,000|
|Capital Accounts||Land & building||18,000|
|B||26,000||Less provision For debts||3,000||10,000|
WORKING NOTES :
Calculation of proportionate capital of C
Let total profits of the firm = Re 1
|Share of profit given to C||=||1|
|Combined share of A and B||=||1||–||1|
Combined capitals of A and B after making allotments (34000+26000) = Rs 60,000
Comment if you have any questions.
Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement