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

Question 85 Chapter 5 of +2-A

Question 85 Chapter 5 of +2-A

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
Y 1,00,000 2,50,000 Furniture and Fittings   25,000
Current A/cs:     Stock   75,000
X 40,000   Debtors 75,000  
Y 30,000 70,000 Less: Provision for Doubtful Debts 5,000 70,000
Creditors   1,30,000 Bills Receivable   30,000
Bills Payable   50,000 Bank   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
Amount Particular Amount
Reserve for D. Debts   2,500 Creditors   7,500
Outstanding Rent   10,000      
           
      Loss transferred to    
      X’s Current A/c 2,500  
      Y’s Current A/c 2,500 5,000
    12,500     12,500

 

Partners’ Current Account
Parti
culars
X Y
Z

Partic
ulars

X
Y Z
To Revaluation A/c 2,500 2,500 By Balance B/d 40,000 30,000
         
To Balance c/d 37,500 27,500        
  40,000 30,000   40,000 30,000

 

Partners’ Capital Account
Parti
culars
X Y
Z

Partic
ulars

X
Y Z
      By Balance B/d 1,50,000 1,00,000
      By Bank A/c A/c 1,25,000
      By Current A/c 37,500 27,500
             
To Balance c/d 1,87,500 1,27,500 1,25,000      
  1,87,500 1,27,500 1,25,000   1,87,500 1,27,500 1,25,000



Balance Sheet
Liabilities
Amount Assets Amount
Creditors (1,30,000 – 7,500 – 20,000 1,02,500 Land and Building   1,50,000
Bills Payable (50,000 + 20,000) 70,000 Plant and Machinery   1,00,000
Capital A/cs:     Fixture and Fittings   25,000
X 1,87,500   Debtors 75,000  
Y 1,27,500   Less: 5% Reserve for D. Debts 7,500 67,500
Z 1,25,000 4,40,000 Bank (50,000 + 1,25,000 + 50,000) 2,25,000
X’s Loan   50,000 Stock   75,000
Liability for WCF   10,000 Bills 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

 

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2 Book 1 min - Question 85 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

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