# Question 98 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question No.98 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

Question 98 Chapter 5 of +2-A

98. Mohan and Sohan are in partnership sharing profits in the proportion of 3/5th and 2/5th respectively. Their Balance Sheet as at 31st March, 2019 was:

 Liabilities Assets Mohan’s Capital 2,000 Plant 650 Sohan’s Capital 1,000 3,000 Cash 650 Creditors 400 Debtors 1,000 Less: Provision for Doubtful Debts 400 600 Stock 1,500 3,400 3,400

They admit Rohan to a 1/3rd share upon the terms that he is to pay into the business 1,000 as Goodwill and sufficient Capital to give him a 1/3rd share of the total capital of the new firm. It was agreed that the Provision for Doubtful Debts be reduced to 100 and the Stock be revalued at 2,000 and that the Plant be reduced to 500. You are required to record the above in the Ledger of the firm and show Balance Sheet of the new partnership.

## The solution of Question 98 Chapter 5 of +2-A: –

 Revaluation Account Particular Amount Particular Amount Plant 150 Reserve for Doubtful Debt (400 – 100 300 Stock 500 Profit on Revaluation Mohan Capital 390 Sohan Capital 260 650 800 800

 Partners’ Capital Account Particulars Mohan Sohan Rohan Particulars Mohan Sohan Rohan By Balance B/d 2,000 1,000 – By Revaluation 390 260 – By Premium for Goodwill 600 400 – To Balance c/d 2,990 1,660 – 2,990 1,660 – 2,990 1,660 – By Balance B/d 2,990 1,660 – By Bank A/c – – 2,325 To Balance c/d 2,990 1,660 2,325 2,990 1,660 2,325 2,990 1,660 2,325

 Balance Sheet Liabilities Amount Assets Amount Creditors 40 Cash 3,975 Debtors 1,000 Capital: Less: Reserve for D. Debt 100 900 Mohan 2,85,000 Stock 2,000 Sohan 1,65,000 Plant 500 Rohan 3,00,000 7,50,000 7,375 7,375

Working Note:-

Old Ratio od Mohan and Sohan = 3 : 2
Sacrificing Ratio of Mohan and Sohan = 3 : 2

Distribution of Premium for Goodwill (in sacrificing ratio)

 Mohan will get = 1,000 X 3 5 = 750

 Sohan will get = 1,000 X 3 5 = 250

Distribution of Revaluation Profit

 Mohan will get = 650 X 3 5 = 390
 Sohan will get = 650 X 3 5 = 260

Calculation Rohan’s Capital

 Combined Capital of Mohan and Sohan after all adjustments = 2,990 + 1,660 = Rs 4,650

 Total Capital of the firm on the basis of combined capital of Mohan and Sohan= = 4,650 X 3 2 = 6,975
 Rohan’s Capital = 6,975 X 1 3 = 2,325

 Cash Account Particular Amount Particular Amount Balance b/d 650 Rohan’s Capital 2,325 Premium for Goodwill 1,000 Balance c/d 3,975 3,975 3,975

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