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

question 72 -UNIMAX

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

Free Accounting book Solution - Class 11 and Class 12

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 :

  1. Stock to depreciate by 5%.
  2. Provision for doubtful debts is to be Rs. 500.
  3. Furniture to depreciate by 10%.
  4. 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

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 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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