Question 70 Chapter 5 – Unimax Class 12 Part 1 – 2021

question 70 - UNIMAX

Question 70 Chapter 5 – Unimax Class 12 Part 1 – 2021

Free Accounting book Solution - Class 11 and Class 12

70. The following was the Balance Sheet of Alok, Vijay and Krishan as on 31st December, 2020 :

Liabilities Amount Assets   Amount
Sundry Creditors 16,000 Land and Building   50,000
Capital :   Furniture   7,500
Alok 40,000 Stock   38,000
Vijay 35,000 Debtors    15,500
Krishan 25,000 Bills Receivable   5,000
Bills Payable 6,000 Bank   4,500
    Cash   1500
         
  1,22,000     1,22,000

They share Profits and Losses in the ratio of 6 : 5 : 3. They agreed on 1st January, 2021 to admit Suresh in the partnership and give him 1/10th share in profits on the following terms :

  1. Suresh would bring in Rs. 28400 as his share of capital.
  2. Stock would be depreciated by Rs. 3000 and furniture by Rs. 900.
  3. A provision of Rs. 1300 be made for outstanding rapairs bill.
  4. The value of land and building be appreciated upto Rs. 65000.
  5. Goodwill of the firm is valued at Rs. 84000 before the admission of Suresh and he is unable to bring his share of assets in cash.

Pass necessary Journal Entries to record the above arrangements and prepare Revaluation account, Capital a/cs and the new Balance Sheet of the firm after Suresh’s admission.

The solution of Question 70 Chapter 5 – Unimax Class 12 Part 1: –

Journal

Date Particulars   L.F. Debit Credit
           
  Building a/c Dr.   15,000  
  To Revaluation A/c       15,000
  (Being value of assets increased)        
           
  Revaluation a/c Dr.   5,200  
  To Stock a/c       3,000
  To Furniture a/c       900
  To Outstanding repairs bill a/c       1,300
  (Being value of asset decreased)        
           
  Revaulation a/c Dr.   9,800  
  To Alok’s Capital A/c       4,200
  To Vijay’s Capital a/c       3,500
  To Krishan’s Capital a/c       2,100
  (Being profit distributed among old partners’ in old ratio)        
           
  Cash a/c Dr.   28,400  
  To Suresh’s Capital A/c       28,400
  (Being goodwill brought by new partner)        
           
  Suresh’s Capital a/c Dr.   8,400  
  To Alok’s Capital A/c       3,600
  To Vijay’s Capital a/c       3,000
  To Krishan’s Capital a/c       1,800
  (Being compensation paid to old partner’s as Suresh’s share of goodwill)        

Revaluation A/c

Particulars   Rs. Particulars Rs.
To Stock a/c   3,000 By Building a/c 15,000
To Furniture a/c   900    
To Provision for outstanding repairs bill   1,300    
To Profit on revaluation        
Alok ( 6 : 5 : 3 ) 4,200      
Vijay 3,500      
Krishan 2,100 9,800    
         
    15,000   15,000

Capital Accounts

Particulars Alok Vijay Krishan Suresh Particulars Alok Vijay Krishan Suresh
To Alok’s Cap. 3,600 By Balance b/d 40,000 35,000 25,000
To Vijay Cap. 3,000 By Cash a/c 28,400
To Vijay Cap. 1,800 By Suresh’s Cap. 3,600 3,000 1,800
To Balance c/d 47,800 41,500 28,900 20,000 By Profit on rev. 4,200 3,500 2,100
                   
  47,800 41,500 28,900 28,400   47,800 41,500 28,900 28,400

Balance Sheet

Liabilities   Rs. Assets   Rs.
Bills Payable   6,000 Land and Building   65,000
Capital Accounts     Furniture   6,600
Alok 47,800   Stock   35,000
Vijay 41,500   Debtors   15,500
Krishan 28,900   Bills Receivable   5,000
Suresh 20,000 1,38,200 Bank   4,500
Creditors   16,000 Cash (1500 + 28400)   29,900
Outstanding repairs bill   1,300      
           
           
           
    1,61,500     1,61,500

Working Note:

Suresh’s share of goodwill = 1/10 X 84000 = Rs. 8400

What is Partnership – Meaning and its Types

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

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)

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

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