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Question 76 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 76 Chapter 5 of +2-A
Question No.76 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

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Question 76 Chapter 5 of +2-A

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76. A and B are partners in a firm. The net profit of the firm is divided as follows: 1/2 to A, 1/3 to B and 1/6 carried to a Reserve. They admit C as a partner on 1st April, 2019 on which date, the Balance Sheet of the firm was:

Liabilities  Assets 
Capital A/cs:  Building50,000
A50,000 Plant and Machinery30,000
B40,00090,000Stock18,000
Reserve 10,000Debtors22,000
Creditors 20,000Bank5,000
Outstanding Expenses 5,000  
  1,25,000 1,25,000

 

Following are the required adjustments on admission of C:
(a) C brings in 25,000 towards his capital.
(b) C also brings in 5,000 for 1/5th share of goodwill.
(c) Stock is undervalued by 10%.
(d) Creditors include a liability of 4,000, which has been decided by the court at 3,200.
(e) In regard to the Debtors, the following Debts proved Bad or Doubtful− 2,000 due from X−bad to the full extent; 4,000 due from Y−insolvent, estate expected to pay only 50%. You are required to prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm

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The solution of Question 76 Chapter 5 of +2-A: –

Revaluation Account
Particular
AmountParticularAmount
To Bad Debts 2,000By Stock A/c 2,000
To Provision for Doubtful Debts A/c 4,000 X 50% 2,000By Creditors (4,000 – 3,200) 800
      
      
   Loss transferred to  
   A Capital720 
   B Capital4801,200
  4,000  4,000

 

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

Parti
culars
ABC

Partic
ulars

A
BC
To Revaluation A/c720480By Balance B/d50,00040,000
    By Bank A/c A/c25,000
    By Reserve A/c6,0004,000
    By Premium for Goodwill3,0002,000
To Balance c/d 58,280
45,52025,000    
 59,00046,00025,000 59,00046,00025,000

 

 

Balance Sheet
Liabilities
AmountAssetsAmount
Creditors (20,000 – 800)19,200Building 50,000
Outstanding Expenses 5,000Plant and Machinery 30,000
   Stock(18,000 × 100/90)20,000
Capital:  Debtors22,000 
A58,280 Less: Bad Debt2,000 
B45,520 Less: Prov. for D. Debts2,00018,000
C25,0001,28,800Bank (5,000+30,000)35,000
  1,53,000  1,53,000

 

Working Note:-

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Calculation of Sacrificing Ratio
Old Ratio of A and B = 3 : 2
Sacrificing Ratio = 3 : 2

Distribution of Premium for Goodwill

A will get=10,000X3
5
 =6,000
  
B will get=10,000X2
5
 =4,000
  

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Distribution of Premium for Goodwill

A will get=5,000X3
5
 =3,000
  
B will get=5,000X2
5
 =2,000
  

 

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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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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