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

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

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 X 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 Particulars X Y Z Particulars 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 Particulars X Y Z Particulars 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)

• 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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