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Question 78 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 78 Chapter 5 of +2-A
Question No.78 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

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Question 78 Chapter 5 of +2-A

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78. A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. Following is their Balance Sheet as at 31st March, 2019:

Liabilities  Assets 
Capital A/cs:  Building35,000
A50,000 Machinery25,000
B30,00080,000Stock15,00
Creditors 20,000Debtor15,000
   Investments5,000
   Bank5,000
  1,00,000 1,00,000

C is admitted as a partner on 1st April, 2019 on the following terms:
(a) C is to pay 20,000 as capital for 1/4th share. He also pays 5,000 as premium for goodwill.
(b) Debtors amounted to 3,000 is to be written off as bad and a Provision of 10% is created against Doubtful Debts on the remaining amount.
(c) No entry has been passed in respect of a debt of 300 recovered by A from a customer, which was previously written off as bad in previous year. The amount is to be paid by A.
(d) Investments are taken over by B at their market value of 4,900 against cash payment. You are required to prepare Revaluation Account, Partner’s Capital Accounts and new Balance Sheet

 

The solution of Question 78 Chapter 5 of +2-A: –

Revaluation Account
Particular
AmountParticularAmount
A’s Capital A/c 300A’s Capital A/c 300
Provision for Doubtful Debts 1,200   
Investment (5,000 – 4,900) 100   
      
   Loss transferred to  
   A Capital2,400 
   B Capital1,6004,000
  4,300  4,300

 

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

Parti
culars
ABC

Partic
ulars

A
BC
To Revaluation A/c2,4002,400By Balance B/d50,00030,000
To Reserve A/c6,0004,000 By Bank A/c A/c20,000
    By Premium for Goodwill3,0002,000
To Balance c/d 50,300
30,40020,000    
 53,00032,00020,000 53,00032,00020,000



Balance Sheet
Liabilities
AmountAssetsAmount
Creditors  20,000Building 35,000
   Machinery 25,000
   Stock 15,000
Capital:  Debtors15,000 
A50,300 Less: Bad Debt3,000 
B30,400 Less: Prov. for D. Debts1,20010,800
C20,0001,00,700Bank  34,900
  1,53,000  1,53,000

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Bank Account
Liabilities
AmountAssetsAmount
To Balance b/d 5,000   
To C’s Capital A/c 20,000   
To Premium for Goodwill A/c 5,000   
To Investment A/c 4,900   
      
   By Balance c/d 34,900
  34,900  34,900

Working Note:-

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

Distribution of Premium for Goodwill

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

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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

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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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