Question 53 Chapter 5 of Class 12 Part – 1 Usha Publication
53. (Hidden Goodwill)David & Bimal are partners in the firm sharing profits & losses in ratio 3:2 . On 31st March , 2018 their balance sheet was as under :
| Liabilities | Rs | Assets | Rs | ||
| Sundry creditors | 82,000 | Cash | 32,000 | ||
| General reserve | 3,000 | Stock | 15,000 | ||
| Capital Accounts | Debtors | 9,400 | |||
| David | 18,000 | Less reserve for doubtful debts | 400 | 9,000 | |
| Bimal | 12,000 | 30,000 | Building | 55,000 | |
| Furniture | 4,000 | ||||
| 1,15,000 | 1,15,000 |
They admitted Chander as a New Partner the new profit sharing ratio became 5: 3: 2 Chander introduced a capital of Rs.16,000. Chander was unable to bring any cash for Goodwill and so it was decided to value the Goodwill on the basis of his share in the profits and the capital contributed by him. The following revaluation were made at the time of Chander’s admission.
(a) Stock had been overvalued by Rs. 750 and furniture by Rs. 500.
(b) Provision for doubtful debts to be increased by Rs. 100.
(c) A creditors for Rs. 2,350 was paid off by Bimal. Privately for which he was not to be reimbursed.
Prepare the Revaluation Account.
Partner’s Capital Account and a Balance Sheet of the new firm on the date of Chander’s admission. Show your working clearly.
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The solution of Question 53 Chapter 5 of Class 12 Part – 1 Usha Publication: –
| Revaluation Account |
|||||
| Particulars |
Amount | Particulars | Amount | ||
| To Stock A/c | 750 | By creditors A/c | 2,350 | ||
| To Furniture A/c | 500 | ||||
| To Provision for doubtful debts | 100 | ||||
| To profit transferred to | |||||
| – David 3/5 | 600 | ||||
| – Bimal 2/5 | 400 | 1,000 | |||
| 2,350 | 2,350 | ||||
| Partners’ Capital Account | |||||||
| Particulars | David | Bimal | Chander | Particulars | David | Bimal | Chander |
| By Balance b/d | 18,000 | 12,000 | |||||
| By Bank A/c | 16,000 | ||||||
| By Chander’s current A/c (profit) | 3,000 | 3,000 | |||||
| By Revaluation A/c | 600 | 400 | |||||
| By General reserve | 1,800 | 1,200 | |||||
| To Balance c/d | 23,400 | 16,600 | 16,000 | ||||
| 23,400 | 16,600 | 16,000 | 23,400 | 16,600 | 16,000 | ||
| Balance Sheet |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Creditors | 79,650 | Furniture | 3,500 | ||
| Capital Accounts | Building | 55,000 | |||
| David | 23,400 | Chander’s current A/C | 6,000 | ||
| Bimal | 16,600 | Stock | 14,250 | ||
| Chander | 16,000 | 56,000 | Debtors | 9,400 | |
| Less reserve for doubtful debts | 500 | 8,900 | |||
| Cash | 48,000 | ||||
| 1,35,650 | 1,35,650 | ||||
WORKING NOTES :
(i)Calculation of Hidden Goodwill
Total Capital of the firm basis of new partners = New partners capital X Reverse share of new partners
= 16,000 X 10/2 = 80,000
Adjusted Capital of David, Bimal & Chander’s capital (before goodwill)
| Combined Capital: | ||
| David | = | 20,400 |
| Bimal | = | 13,600 |
| Chander | = | 16,000 |
| = | 50,000 |
Value of goodwill = 80,000-50,000
= Rs. 30,000
(ii) Premium for goodwill (Chander) = 30,000X 2/10 = Rs 6,000
Journal entry for adjustment of goodwill
| Chander current A/c | Dr | 6,000 | |
| To David capital A/c | 3,000 | ||
| To Bimal’s capital A/c | 3,000 |
| David’s sacrifice Share | = | 3 | – | 5 |
| 5 | 10 | |||
| = | 1 | |||
| 10 |
| Bimal’s sacrifice Share | = | 2 | – | 3 |
| 5 | 10 | |||
| = | 1 | |||
| 10 |
SACRIFICING RATIO = 1 : 1
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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)
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1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
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