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Question 85 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 85 Chapter 5 of +2-A
Question No.85 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

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Question 85 Chapter 5 of +2-A

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85. X and Y are partners sharing profits equally. Their Balance Sheet as on 31st March, 2019 is given below:

Liabilities  Assets  
Capital A/cs:  Land and Building 1,50,000
1,50,000 Plant and Machinery 1,00,000
Y1,00,0002,50,000Furniture and Fittings 25,000
Current A/cs:  Stock 75,000
X40,000 Debtors75,000 
Y30,00070,000Less: Provision for Doubtful Debts5,00070,000
Creditors 1,30,000Bills Receivable 30,000
Bills Payable 50,000Bank 50,000
  5,00,000  5,00,000

Z is admitted as a new partner for 1/4th share under the following terms:
(a) Z is to introduce 1,25,000 as capital.
(b) Goodwill of the firm was valued at nil.
(c) It is found that the creditors included a sum of 7,500 which was not to be paid. But it was also found that there was a liability for Compensation to Workmen amounting to 10,000.
(d) Provision for doubtful debts is to be created @ 10% on debtors.
(e) In regard to the Partners’ Capital Accounts, present Fixed Capital Account Method is to be converted into Fluctuating Capital Account Method. (f) Bills of 20,000 accepted from creditors were not recorded in the books. (g) X provides 50,000 loan to the business carrying interest @ 10% p.a. You are required to prepare Revaluation Account,
Partners’ Capital Accounts, Bank Account and the Balance Sheet of the new firm

 

 

The solution of Question 85 Chapter 5 of +2-A: –

Revaluation Account
Particular
AmountParticularAmount
Reserve for D. Debts 2,500Creditors 7,500
Outstanding Rent 10,000   
      
   Loss transferred to  
   X’s Current A/c2,500 
   Y’s Current A/c2,5005,000
  12,500  12,500

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Partners’ Current Account
Parti
culars
XY
Z

Partic
ulars

X
YZ
To Revaluation A/c2,5002,500By Balance B/d40,00030,000
     
To Balance c/d 37,50027,500    
 40,00030,000 40,00030,000

 

Partners’ Capital Account
Parti
culars
XY
Z

Partic
ulars

X
YZ
   By Balance B/d1,50,0001,00,000
   By Bank A/c A/c1,25,000
   By Current A/c37,50027,500
       
To Balance c/d 1,87,5001,27,5001,25,000   
 1,87,5001,27,5001,25,000 1,87,5001,27,5001,25,000



Balance Sheet
Liabilities
AmountAssetsAmount
Creditors(1,30,000 – 7,500 – 20,0001,02,500Land and Building 1,50,000
Bills Payable(50,000 + 20,000)70,000Plant and Machinery 1,00,000
Capital A/cs:  Fixture and Fittings 25,000
X1,87,500 Debtors75,000 
Y1,27,500 Less: 5% Reserve for D. Debts7,50067,500
Z1,25,0004,40,000Bank(50,000 + 1,25,000 + 50,000)2,25,000
X’s Loan 50,000Stock 75,000
Liability for WCF 10,000Bills Receivables 30,000
      
  6,72,500  6,72,500

 

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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