Question 69 Chapter 5 of +2-A
69. A, B and C are partners sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Their Balance Sheet as at 31st March, 2019 is as follows:
| Liabilities | Assets | |||
| Capital A/cs: | Land and Building | 50,000 | ||
| A | 60,000 | Plant and Machinery | 40,000 | |
| B | 60,000 | Furniture | 30,000 | |
| C | 40,000 | 1,60,000 | Stock | 20,000 |
| Creditors | 30,000 | Debtors | 30,000 | |
| Bills Payable | 10,000 | Bills Receivable | 20,000 | |
| Bank | 10,000 | |||
| 80,535 | 80,535 |
D is admitted as a partner on 1st April, 2019 for equal share. His capital is to be 50,000. Following adjustments are agreed on D’s admission:
(a) Out of the Creditors, a sum of 10,000 is due to D, it will be adjusted against his capital. |
(b) Advertisement Expenses of 1,200 are to be carried forward as Prepaid Expenses.
(c) Expenses debited in the Profit and Loss Account includes a sum of 2,000 paid for B’s personal expenses.
(d) A Bill of Exchange of 4,000, which was previously discounted with the bank, was dishonoured on 31st March, 2019 but entry was not passed for dishonour.
(e) A Provision for Doubtful Debts @ 5% is to be created against Debtors.
(f) Expenses on Revaluation amounted to 2,100 is paid by A. Prepare necessary Ledger Accounts and Balance Sheet after D’s admissio
The solution of Question 69 Chapter 5 of +2-A: –
| Revaluation Account |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Provision for doubtful Debts | 1,700 | Prepaid Advt. Expense | 1,200 | ||
| A’s Capital (Rev. Exp. | 2,100 | B’s Capital (Personal Exp.) | 2,000 | ||
| Loss transferred to | |||||
| A Capita | 300 | ||||
| B Capita | 200 | ||||
| C Capita | 100 | 600 | |||
| 3,800 | 3,800 | ||||
| Partners’ Capital Account the year ended 31st March, 2019 |
||||
|
Particulars |
A |
B | C | D |
| Revaluation | – | 2,000 | – | – |
| Revaluation (Loss | 300 | 200 | 100 | – |
| To Balance c/d | 61,800 |
57,800 | 39,900 | 50,000 |
| 62,100 | 60,000 | 40,000 | 50,000 | |
|
Particulars |
A |
B | C | D |
| By Balance B/d | 60,000 | 60,000 | 40,000 | – |
| Creditors | – | – | – | 10,000 |
| Cash | – | – | – | 40,000 |
| Revaluation (Exp.) | 2,100 | – | – | – |
| 62,100 | 60,000 | 40,000 | 50,000 |
| Balance Sheet |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Sundry Creditors | 30,000 | Land and Building | 53,110 | ||
| Less: D’s Capital | 10,000 | 20,000 | Sundry Debtors | 30,000 | |
| Bill Payable | 10,000 | Add: B/R dishonor | 4,000 | ||
| Capital: | Less: Provision for Doubtful Debt | (1,700) | 32,300 | ||
| A | 61,800 | Plant and Machinery | 40,000 | ||
| B | 57,800 | Furniture | 30,000 | ||
| C | 39,900 | Prepaid Advt. Expenses | 1,200 | ||
| D | 50,000 | 2,09,500 | Stock | 20,000 | |
| Bills Receivable | 20,000 | ||||
| Bank | (10,000 + 40,000 – 4,000) | 46,000 | |||
| 2,39,500 | 2,39,500 | ||||
Working Note:-
Distribution of Loss on Revaluation
| A’s Capital will be debited by | = | 600 | X | 3 |
| 6 | ||||
| = | 300 |
| B’s Capital will be debited by | = | 600 | X | 2 |
| 6 | ||||
| = | 200 |
| C’s Capital will be debited by | = | 600 | X | 1 |
| 6 | ||||
| = | 100 |
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
