Question 68 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 68 Chapter 5 – Unimax Class 12 Part 1 – 2021

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The solution of Question 68 Chapter 5 – Unimax Class 12 Part 1: –

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

68. Ashok and Kishore were partners in a firm, sharing profits and losses in the ratio of 3 : 2 respectively. The following is Balance Sheet of the firm as on 31st March, 2021.

Liabilities	Amount	Assets		Amount
Creditors	30,000	Cash		2,000
Capital :		Bank		28,000
Ashok	60,000	Stock		15,000
Kishore	40,000	Plant		33,000
Bills Payable	20,000	Building		44,000
		Debtors	30,000
		Less : Provision	2,000	28,000

	1,50,000			1,50,000

They agreed to admit Vinod with effect from 1st April, 2021 with ¼ share in the profits on the following terms :

Vinod to bring in proportionate capital.
Buildings are to be appreciated by Rs. 6000 and plant is to be depreciated by Rs. 3000.
The provision for doubtful debts is to be raised to Rs. 3000.
The goodwill of the firm was valued at Rs. 30000 but Vinod is unable to bring his share of goodwill in cash.

Prepare the Revaluation Account, Partners’ capital Accounts and The Balance Sheet of the firm immediately after Vinod’s admission.

The solution of Question 68 Chapter 5 – Unimax Class 12 Part 1: –

Revaluation A/c

Particulars		Rs.	Particulars	Rs.
To Plant a/c		3,000	By Building a/c	6,000
To Provision for doubtful debts a/c		1,000
To Profit on revaluation
Ashok (3 : 2)	1,200
Kishore	800	2,000

		6,000		6,000

Capital Accounts

Particulars	Ashok	Kishore	Vinod	Particulars	Ashok	Kishore	Vinod
To Ashok’s Capital a/c	–	–	4,500	By Balance b/d	60,000	40,000	–
To Kishore’s Capital a/c	–	–	3,000	By Vinod’s capital	4,500	3,000	–
To Balance c/d	65,700	43,800	29,000	By Profit on rev.	12,000	800	–
				By Cash a/c	–	–	36,500

	65,700	43,800	36,500		65,700	43,800	36,500

Cash A/c

Particulars	Rs.	Particulars	Rs.
To Balance c/d	18,000	By Balance c/d	1,12,000
To B’s capital a/c	88,000
To Premium a/c	6,000

	1,12,000		16,000

Balance Sheet

Liabilities		Rs.	Assets		Rs.
Sundry Creditors		30,000	Cash (2000 + 36500)		38,500
Capital Accounts			Bank		28,000
Ashok	65,700		Debtors	30,000
Kishore	43,800		Less : Provision	3,000	27,000
Vinod	29,000	1,38,500	Stock		15,000
Bills Payable		20,000	Plant		30,000
			Building		50,000

		1,88,500			1,88,500

Working Note:

Calculation of new partners capital :
Total capital of firm = (Ashok’s balance c/d + Kishore’s balance c/d) X 4/3
= (65800 + 43800) X 4/3 = Rs. 146000
Vinod’s Capital = 146000 X 1/4 = Rs. 36500

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