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Question 75 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 75 Chapter 5 of +2-A
Question No.75 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

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Question 75 Chapter 5 of +2-A

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75. Divya, Yasmin and Fatima are partners in a firm, sharing profits and losses in 11 : 7 : 2 respectively. The Balance Sheet of the firm on 31st March, 2018 was as follows: BALANCE SHEET as at 31st March, 2018

Liabilities AmountAssets Amount
Sundry Creditors 70,000Factory Building 7,35,000
Public Deposits 1,19,000Plant and Machinery 1,80,000
Reserve Fund 90,000Furniture 2,60,000
Outstanding Expenses 10,000Stock 1,45,000
Capital A/cs:  Debtors1,50,000 
Divya5,10,000 Less: Provision-30,0001,20,000
Yasmin3,00,000 Cash at Bank 1,59,000
Fatima5,00,00013,10,000   
  15,99,000  15,99,000

On 1st April, 2018, Aditya is admitted as a partner for one-fifth share in the profits with a capital of 4,50,000 and necessary amount for his share of goodwill on the following terms:
(a) Furniture of 2,40,000 were to be taken over Divya, Yasmin and Fatima equally.
(b) A creditor of 7,000 not recorded in books to be taken into account.
(c) Goodwill of the firm is to be valued at 2.5 years’ purchase of average profits of last two years. The profit of the last three years were: 2015-16 − 6,00,000; 2016-17 − 2,00,000; 2017-18 − 6,00,000.
(d) At time of Aditya’s admission. Yasmin also brought in 50,000 as fresh capital.
(e) Plant and Machinery is re-valued to 2,00,000 and expenses outstanding were brought down to 9,000. Prepare Revaluation Account, Partners Capital Account and the Balance Sheet of the reconstituted firm.

 

The solution of Question 75 Chapter 5 of +2-A: –

Revaluation Account
Particular
AmountParticularAmount
To Sundry Creditors A/c 1,600By Plant and Machinery A/c 20,000
   By Outstanding Expenses A/c 1,000
To Profit Transferred to:     
Divya’s Capital A/c7,700    
Yasmin’s Capital A/c4,900    
Fatima’s Capital A/c1,40014,000   
      
  21,000  21,000

 

Partners’ Capital Account
the year ended 31st March, 2019

ParticularsDivyaYasminFatima
Aditya
To Furniture A/c80,00080,00080,000
To Revaluation (Loss300200100 
     
     
     
To Balance c/d 5,97,200
3,76,4004,50,4004,50,000
 6,77,2004,56,4005,30,4004,50,000

 

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Particulars

Divya
YasminFatima
Aditya
By Balance B/d5,10,0003,00,0005,00,000
By Bank A/c50,0004,50,000
By Premium for Goodwill A/c1,10,00070,00020,000
By Reserve Fund A/c49,50031,5009,000
By Revaluation A/c7,7004,9001,400
     
 6,77,2004,56,4005,30,4004,50,000

 

 

 

Balance Sheet
Liabilities
AmountAssetsAmount
Sundry Creditor 77,000Factory Building 7,35,000
Public Deposits 1,19,000Plant and Machinery 2,00,000
Outstanding Expenses 9,000Furniture 20,000
Capital:  Stock 1,45,000
Divya5,97,200 Bank 49,800
Yasmin3,76,400 Debtors1,50,000 
Fatima4,50,400 Less: Provision30,0001,20,000
Aditya4,50,40018,74,000Cash at Bank(1,59,000 + 2,00,000 + 50,000 + 4,50,000)8,59,000
  20,79,000  20,79,000

 

Working Note:-

Calculation of Goodwill brought in by Aditya

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Average Profits=(Normal profits from 31st March, 2017 to 31st March, 2018)/2
 =(2,00,000 + 6,00,000)/2
 =4,00,000
Goodwill=Average Profits × No. of years of Purchase
 =(4,00,000 × 2.5)
 =10,00,000
Goodwill brought in by Aditya=(10,00,000 × 1/5)
 == 2,00,000

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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

 

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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