Question 54 Chapter 5 of Class 12 Part – 1 Usha Publication
54. ( Investment taken over by old partner) A & B are sharing profits in the ratio of 5:30 admit C as a partner with 1/3 share in profits. He has to contribute Rs. 25,000 as his capital. The balance sheet of A & B before admission was as follows.
| Liabilities | Rs | Assets | Rs | ||
| Creditors | 21,000 | Goodwill | 10,000 | ||
| Bills Payable | 6,000 | Land & Building | 25,000 | ||
| Capital Account | Plant & Machinery | 30,000 | |||
| A | 50,000 | Stock | 15,000 | ||
| B | 35,000 | 85,000 | Sundry Debtors | 20,000 | |
| General Reserve | 16,000 | Less Provision for Bad Debts | 1,500 | 18,500 | |
| Investments | 20,000 | ||||
| Cash | 9,500 | ||||
| 1,28,000 | 1,28,000 |
Other terms agreed upon were :
(i) Goodwill of the firm to be valued at Rs. 21,000.
(ii) Land and buildings were to be valued at Rs. 35,000 and plant and machinery at Rs. 25,000.
(iii) The provision for bad debts was found to be in excess by Rs. 400.
(iv) A liability for Rs. 1,000 included in sundry creditors was not likely to arise.
(v)Rs. 12,000 of the investments are to be taken over by A and B in their profit-sharing ratios.
(vi) B is to withdraw Rs. 3,400 in cash
Give journal entries to record the above transactions and show the balance sheet of the firm after C’s admission
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The solution to Question 54 Chapter 5 of Class 12 Part – 1 Usha Publication: –
| Journal | |||||
| Date | Particulars |
L.F. | Debit | Credit | |
| 1 | Cash A/c | Dr. | 25,000 | ||
| To C’s Capital A/c | 25,000 | ||||
| (Being the cash brought in as capital) | |||||
| 2 | C’s Current A/c | Dr. | 7,000 | ||
| To A’s Capital A/c | 4,375 | ||||
| To B’s Capital A/c | 2,625 | ||||
| (Being goodwill adjusted through Current A/c) | |||||
| 3 | Land & Building A/c | Dr. | 10,000 | ||
| Provisional for doubtful debts A/c) | Dr. | 400 | |||
| Sundry Creditors A/c | Dr. | 1,000 | |||
| To Revaluation A/c | 11,400 | ||||
| (Being revaluation of assets recorded in the books) | |||||
| 4 | Revaluation A/c | Dr. | 5,000 | ||
| To Plant & Machinery A/c | 5,000 | ||||
| (Being decrease in the value of asset recorded in the books) | |||||
| 5 | Revaluation A/c | Dr. | 6,400 | ||
| To A’s Capital A/c | 4,000 | ||||
| To B’s Capital A/c | 2,400 | ||||
| (Being profit on revaluation distributed ) | |||||
| 6 | B’s Capital A/c | Dr. | 3,400 | ||
| To Cash A/c | 3,400 | ||||
| (Being drawings of B) | |||||
| 7 | General reserve A/c | Dr. | 16,000 | ||
| To A’s Capital A/c | 10,000 | ||||
| To B’s Capital A/c | 6,000 | ||||
| (Being General Reserve distributed among old partners) | |||||
| 8 | A’s Capital A/c | Dr. | 6,250 | ||
| B’s Capital A/c | Dr. | 3,750 | |||
| To Goodwill A/c | 10,000 | ||||
| (Being goodwill written off) | |||||
| Partners’ Capital Account | |||||||
| Particulars | A | B | C | Particulars | A | B | C |
| To Cash A/c | 3,400 | By Balance b/d | 50,000 | 35,000 | |||
| To Investment A/c | 7,500 | 4,500 | By Cash A/c | 25,000 | |||
| To Goodwill A/c | 6,250 | 3,750 | By C’s Current A/c | 4,375 | 2,625 | ||
| By Revaluation A/c | 4,000 | 2,400 | |||||
| By General reserve | 10,000 | 6,000 | |||||
| To Balance c/d | 54,625 | 34,375 | 25,000 | ||||
| 68,375 | 46,025 | 25,000 | 68,375 | 46,025 | 25,000 | ||
| Balance Sheet |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Creditors | 20,000 | Land & Building | 35,000 | ||
| Bills Payable | 6,000 | Plant & Machinery | 25,000 | ||
| Capital Account | Stock | 15,000 | |||
| A | 54,625 | Sundry Debtors | 20,000 | ||
| B | 34,375 | Less Provision for Bad Debts | 1,100 | 18,900 | |
| C | 25,000 | Investments | 8,000 | ||
| C’s current A/c | 7,000 | ||||
| Cash | 31,100 | ||||
| 1,40,000 | 1,40,000 | ||||
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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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