Question 69 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 69 Chapter 5 of +2-A

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)

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 69 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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