Question 72 Chapter 5 - Unimax Class 12 Part 1

Question 72 Chapter 5 – Unimax Class 12 Part 1 – 2021

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The solution of Question 72 Chapter 5 – Unimax Class 12 Part 1: –

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

72. Aviral and Advitya are partners sharing profits and losses in ratio 3 : 2. Their Balance Sheet stood as under on 31st December, 2021 :

Liabilities	Amount	Assets		Amount
Creditors	38,500	Cash		2,000
Capital :		Stock		15,000
Aviral	29,000	Prepaid Insurance		1,500
Advitya	15,000	Debtors	9,400
Outstanding liabilities	4,000	Less : Provision	400	9,000
		Machinery		19,000
		Buildings		35,000
		Furniture		5,000

	86,500			86,500

Avnesh is admitted as a new partner introducing a capital of Rs. 16000. The new profit sharing ratio is 5 : 3 : 2. Avnesh is unable to bring in any cash for goodwill. So, it is decided to value of the goodwill on the basis of Avnesh’s share in the profits and the capital contributed by him. Following revaluations are made :

Stock to depreciate by 5%.
Provision for doubtful debts is to be Rs. 500.
Furniture to depreciate by 10%.
Buildings are valued at Rs. 40000.

Show the necessary ledger accounts and the Balance Sheet of the new firm.

The solution of Question 72 Chapter 5 – Unimax Class 12 Part 1: –

Revaluation A/c

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Particulars		Rs.	Particulars	Rs.
To Stock a/c		3,000	By Building a/c	5,000
To Provision for bad debts a/c		100
To Furniture a/c		500
To Profit on revaluation
Aviral (3 : 2)	2,190
Advitya	1,460	3,650


		5,000		5,000

Capital Accounts

Particulars	Aviral	Advitya	Avnesh	Particulars	Aviral	Advitya	Avnesh
To Aviral’s Capital a/c	–	–	1,635	By Balance b/d	29,000	15,000	–
To Advitya’s Capital a/c	–	–	1,635	By Avnesh’s capital	1,635	1,635	–
To Balance c/d	32,825	18,095	12,730	By Profit on rev.	2,190	1,460	–
				By Cash a/c	–	–	16,000

	32,825	18,095	16,000		32,825	18,095	16,000

Balance Sheet

Liabilities		Rs.	Assets		Rs.
Creditors		38,500	Cash (2000 + 16000)		18,000
Capital Accounts			Stock		14,250
Aviral	32,825		Debtors	9,400
Advitya	18,095		Less : Provision	500	8,900
Avnesh	12,730	63,650	Prepaid Insurance		1,500
Outstanding liabilites		4,000	Machinery		19,000
			Buildings		40,000
			Furniture		4,500

		1,06,150			1,06,150

Working Note:

Calculation of goodwill :
Total capital of firm = 10/2 X 16000 = Rs. 80000
Hidden G.W. = Total Capital of firm – (combined capital of old partners’ + profit on revaluation)
= Rs. 80000 – (29000 + 15000 + 3650 + 16000)
= Rs. 80000 – 63650 = Rs. 16350
Avnesh’s share = 2/10 X 16350 = Rs. 3270
Sacrificing ratio :
Aviral’s sacrifice = 3/5 – 5/10 = 1/10
Advitya’s sacrifice = 2/5 – 3/10 = 1/10
Sacrificing ratio = (1 : 1)

What is Partnership – Meaning and Its 4 Types

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

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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

The solution of Question 72 Chapter 5 – Unimax Class 12 Part 1: –

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)

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