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VDO+ Tag:Question 41 Chapter 6 of Class 12 Part – 1 Usha Publication
The Balance Sheet of Arthur, Baldwin and Curtis who were sharing profits in proportion to their capitals stood as follows on 31st March, 2016 :
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Video Tag:| Liabilities | Rs | Assets | Rs | ||
| Sundry Creditors | 6,900 | Cash at bank | 5,500 | ||
| Capitals | Debtors | 5,000 | |||
| Arthur | 20,000 | Less: Provision D/D | 100 | 4,900 | |
| Baldwin | 15,000 | Stock | 8,000 | ||
| Curtis | 10,000 | 45,000 | Plant & machinery | 8,500 | |
| Building | 25,000 | ||||
| 51,900 | 51,900 |
Mr. Baldwin retires and the following readjustments of the assets and liabilities have been agreed upon before the ascertainment of the amount payable by the firm to Mr. Baldwin :
(a) That the stock be depreciated by 6 per cent.
(b) That the reserve for doubtful debts be brought upto 5% on debtors.
(c) That the factory land and building be appreciated by 20%.
(d) That a provision of ₹ 770 be made in respect of outstanding legal charges.
(e) That the goodwill of the entire firm be fixed at Z 10,800 and Mr. Baldwin’s share of the same be adjusted into the accounts of Arthur and Curtis who are going to share in future in the proportion of five eights and three eights respectively (No Goodwill account is to be raised).
(f) That the entire capital of the firm as newly constituted be fixed at Rs 28,000 between Arthur and Curtis in the proportion of five-eights and three eights after passing entries in their accounts for goodwill (i.e. actual cash to be paid off to or to be brought in by the continuing partners as the case may be).
Pass the necessary journal entries to give effect to the above arrangements and prepare the balance sheet of Arthur and Curtis transferring Baldwin’s share of capital and goodwill to be separate loan account in his name.
The solution of Question 41 Chapter 6 of Class 12 Part – 1 Usha Publication: –
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| Journal | |||||
| Date | Particulars |
L.F. | Debit | Credit | |
| 1 | Revaluation A/c | Dr. | 1,400 | ||
| To Stock A/c | 480 | ||||
| To Provision for Doubtful Debts A/c | 150 | ||||
| To Provision for Legal Charges A/c | 770 | ||||
| (Being decrease in the value of assets and provisions are created in the books) | |||||
| 2 | Land and Building A/c | Dr. | 5,000 | ||
| To Revaluation A/c | 5,000 | ||||
| (Being increase in the value of asset recorded in the books) | |||||
| 3 | Revaluation A/c | Dr. | 3,600 | ||
| To A’s Capital A/c | 1,600 | ||||
| To B’s Capital A/c | 1,200 | ||||
| To C’s Capital A/c | 800 | ||||
| (Being profit on revaluation transferred to capital A/cs) | |||||
| 4 | A’s capital A/c | Dr. | 1,950 | ||
| C’s capital A/c | Dr. | 1,650 | |||
| To B’s capital A/c | 3,600 | ||||
| (Being adjustment of goodwill made through capital A/cs) | |||||
| 5 | A’s capital A/c | Dr. | 2,150 | ||
| To Bank A/c | 2,150 | ||||
| (Being excess capital withdrawal by A) | |||||
| 6 | B’s capital A/c | Dr. | 19,800 | ||
| To B’s Loan A/c | 19,800 | ||||
| (Being balance of the retiring partner transferred to his loan account) | |||||
| 7 | Bank A/c | Dr. | 1,350 | ||
| To C’s Capital A/c | 1,350 | ||||
| (Being short capital introduced to business by C) | |||||
| Partners’ Capital Account | |||||||
| Particulars | A | B | C | Particulars | A | B | C |
| To B’s Capital A/c | 1,950 | 1,650 | By Balance b/d | 20,000 | 15,000 | 10,000 | |
| To B’s Loan A/c | 19,800 | By Revaluation A/c | 1,600 | 1,200 | 800 | ||
| To Bank A/c (Bal. Fig.) | 2,150 | By A’s Capital A/c | 1,950 | ||||
| By C’s Capital A/c | 1,650 | ||||||
| To Balance c/d | 17,500 | 10,500 | By Bank A/c (Bal. Fig.) | 1,350 | |||
| 21,600 | 19,800 | 12,150 | 21,600 | 19,800 | 12,150 | ||
| Balance Sheet |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Sundry Creditors | 6,900 | Cash at Bank | 4,700 | ||
| Provision for legal Charges | 770 | Debtors | 5,000 | ||
| B’s Loan | 19,800 | Less :- Provision for D/D | 250 | 4,750 | |
| Capital Accounts | Stock | 7,520 | |||
| A | 17,500 | Plant & Machinery | 8,500 | ||
| C | 10,500 | 28,000 | Factory Land and Building | 30,000 | |
| 55,470 | 55,470 | ||||
Calculation of gaining ratio of A and C:
Gaining ratio = New share – Old share
| A’s Gain | = | 5 | – | 4 | = | 45 – 32 |
| 8 | 9 | 72 | ||||
| = | 13 | |||||
| 72 |
| C’s gain | = | 3 | – | 2 | = | 27 – 16 |
| 8 | 9 | 72 | ||||
| = | 11 | |||||
| 72 |
Gaining ratio = 13 : 11
Calculation of B’s Share of Goodwill:
| = | Firm Goodwill | – | B’s share | |
| = | ₹ 10,800 | X | 3 | |
| 9 | ||||
| = | ₹ 3,600 |
| A’s share | = | ₹ 3,600 | X | 13 |
| 24 | ||||
| = | ₹ 1,950 |
| C’s share | = | ₹ 3,600 | X | 11 |
| 24 | ||||
| = | ₹ 1,650 |
Calculation of new share of capital of continuing Partner A and C:-
Total capital = ₹ 28,000
New Profit Sharing ratio = 5 : 3
| A’s share | = | ₹ 28,000 | X | 5 |
| 8 | ||||
| = | ₹ 17,500 |
| C’s share | = | ₹ 28,000 | X | 3 |
| 8 | ||||
| = | ₹ 10,500 |
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End of Solution
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Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum
Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)
Chapter No. 2 – Partnership Accounts – I (Introduction)
Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 1 Class 12 by Unimax Publication
- Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
- Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
- Chapter No. 3 – Partnership Accounts – II (Goodwill)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Check out Part 2 of both books.
In Class 12th the accountancy has 2 books i.e. Part 1 and Part 2. The Books related to the Part 1 are shown above. but If you want to know more about Part 2, you can check it out from the following links. We have provided the links to both books i.e. Accountancy Part 2 by Usha Publication and Advanced Accountancy Part 2 by Unimax Publication.
1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
2. Advanced Accountancy Part 2 Class 12 by Unimax Publication