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Question 92 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 92 Chapter 5 of +2-A
Question No.92 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

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Question 92 Chapter 5 of +2-A

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92. Following is the Balance Sheet of Abha and Binay as at 31st March, 2014:

Liabilities  Assets  
Creditors 13,000Bank 15,000
Employees Provident Fund 8,000Debtors22,000 
Workmen Compensation Fund 15,000Less : Provision for Doubtful Debts1,00021,000
Capital A/cs  Stock 10,000
Abha55,000 Plant and Machinery 60,000
Binay30,00085,000Goodwill 10,000
   Profit and Loss 5,000
  1,21,000  1,21,000

Chitra was admitted as a partner for 1/4th share in the profits of the firm. It was decided that:
(a) Bad Debts amounted to 1,500 will be written off.
(b) Stock worth 8,000 was taken over by Abha and Binay at Book Value in their profit-sharing ratio. The remaining stock was valued at 2,500.
(c) Plant and Machinery and Goodwill were valued at 32,000 and 20,000 respectively.
(d) Chitra brought her share of goodwill in cash.
(e) Chitra will bring proportionate capital and the capitals of Abha and Binay will be adjusted in their profit-sharing ratio by bringing in or paying off cash as the case may be.
Prepare Revaluation Account and Partners’ Capital Accounts

 

 

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The solution of Question 92 Chapter 5 of +2-A: –

Revaluation Account
Particular
AmountParticularAmount
Bad debts 500Stock 500
Plant and Machinery 28,000   
      
   Loss on Revaluation  
   Abha’s Capital A/c14,000 
   Binay’s Capital A/c14,00028,000
  28,500  28,500

 

Partners’ Capital Account
Parti
culars
AbhaBinayChitra

Partic
ulars

AbhaBinayChitra
To Revaluation A/c14,00014,000By Balance B/d55,00030,000
To Investment A/c5,0005,000By Bank

18,000

To Profit and Loss2,5002,500By Premium for Goodwill2,5002,500
To Stock4,0004,000By WCF7,5007,500
To Balance c/d 39,50014,50018,000    
 65,00040,00018,000 65,00040,00018,000
To Bank A/c12,500By Balance B/d39,50014,50018,000
    By A’s Current A/c60,550
To Balance c/d
27,000
27,000
18,000
    
 39,50027,00018,000 39,50027,00018,000

 

Working Note:-

Calculation of New Capital

New Capita = Total Adjusted Capital × Respective Partner’s Profit Share

Abha ’s New Capital=54,000X1
2
 =27,000  
Binay’s New Capital=54,000X1
2
 =27,000  

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Calculation of Chitra’s Share of Goodwill
Chitra’s Share = Firm’s Goodwill × Chitra’s Profit Share

 =20,000X1
4
 =5,000  

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This will be shared between Abha and Binay in sacrificing ratio 1:1

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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