Question 82 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 82 Chapter 5 of +2-A

Question 82 Chapter 5 of +2-A

82. Yogesh and Naresh are partners sharing profits in the ratio of 3 : 2. They admit Ramesh for 1/3rd share on 1st April, 2019 and also decide to share future profits equally. Balance Sheet of the firm as at 31st March, 2019 was as follows:

Liabilities     Assets    
Capital A/cs:     Land   4,00,000
Yogesh 5,00,000   Building   4,00,000
Naresh 5,00,000 10,00,000 Furniture   50,000
Current A/cs     Computers   1,00,000
Yogesh 1,10,000   Stock   1,50,000
Naresh 90,000 2,00,000 Sundry Debtors 2,10,000  
Employees’ Provident Fund   25,000 Less: Provision for Doubtful Debt 10,000 2,00,000
Workmen Compensation Reserve   1,00,000 Cash   10,000
Sundry Creditors   75,000 Bank   70,000
Expenses Payable   10,000 Advertisement Suspense   30,000
    14,10,000     14,10,000

They admitted Ramesh on the following terms:
(a) He will bring 5,00,000 as his capital.
(b) His share of goodwill is valued at 1,00,000 but he is unable to bring cash for his share of goodwill. It is agreed to debit the amount to his Current Account.
(c) Value of Land and Building is to be appreciated by 40,000 each.
(d) Value of Furniture to be reduced to 40,000.
(e) Provision for Doubtful Debts to be increased to 10%.
(f) A liability for damages of 10,000 is to be created. Pass the Journal entries on admission of Ramesh and prepare Revaluation Account.

 

 

The solution of Question 82 Chapter 5 of +2-A: –

Date Particulars
L.F. Debit Credit
  Cash A/c Dr   5,00,000  
  To Abhay’s Capital A/c       5,00,000
  (Being amount due to Abhay transferred to his Capital A/c)        
  Cash A/c Dr   1,00,000  
  To Yogesh’s Current A/c (1,00,000 × 4/5)       80,000
  To Naresh’s Current A/c (1,00,000 × 1/5)       20,000
  (Being Capital and goodwill paid by the new partner        
  Revaluation A/c Dr   31,000  
  To Provision for Doubtful Debts A/c       11,000
  To Liability for damages A/c       10,000
  To Furniture A/c       10,000
  (Being assets revalued and liabilities reassessed)        
  Land A/c Dr   40,000  
  Building A/c Dr   40,000  
  To Revaluation A/c       80,000
  (Being appreciation in land and building provided for)        
  Revaluation A/c (WN2) Dr   49,000  
  To Yogesh’s Current A/c       29,400
  To Naresh’s Current A/c       19,600
  (Being revaluation profit transferred to partner’s current A/c)        
  Workmen Compensation Reserve A/c Dr   1,00,000  
  To Yogesh’s Current A/c       60,000
  To Naresh’s Current A/c       40,000
  (Being workmen compensation reserve distributed)        
  Yogesh’s Current A/c Dr   18,000  
  Naresh’s Current A/c Dr   12,000  
  To Advertisement Suspense A/c       30,000
  (Being accumulated loss written off)        



Working Note:-

Calculation of new profit-sharing ratio
Old Ratio of Yogesh and Gopal = 3 : 2
New Ratio of Yogesh and Gopal = 1 : 1

Yogesh’s New Ratio = 3 1
5 3
  = 9- 5
15
  = 4
  15
Gopal’s New Ratio = 2 1
5 3
  = 6- 5
15
  = 1
  15

Calculation of Revaluation Profit/Loss:

Debit side total = (11,000 + 10,000 + 10,000)
  = 31,000
Credit side total = 80,000
Gain on Revaluation = (80,000 – 31,000)
  = 49,000


T.S. Gre
wal’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 - Question 82 Chapter 5 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.