Question 41:
Asin and Shreyas are partners in a firm. They admit Ajay as a new
partner with 1/5th share in the profits of the firm. Ajay brings `
5,00,000 as his share of capital. The value of the
total assets of the firm was ` 15,00,000 and outside
liabilities were valued at ` 5,00,000 on that date. Give necessary Journal entry
to record goodwill at the time of Ajay's admission. Also show your
workings.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
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Ajay’s Capital A/c |
Dr. |
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2,00,000 |
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To
Asin’s Capital A/c |
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1,00,000 |
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To
Shreya’s Capital A/c |
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1,00,000 |
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(Ajay’s share of goodwill distributed among |
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Working Notes:
Calculation of Goodwill brought in by Ajay
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Value of
firm’s goodwill |
= Capitalised
value of the firm – Net worth |
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Capitalised value of the firm |
= Share of Ajay's capital × Reciprocal of Ajay's share = 5,00,000 ×5/1= ` 25,00,000 |
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Net worth of the new firm |
= Total assets-Outside liabilities + Ajay's capital = 15,00,000 - 5,00,000 + 5,00,000= ` 15,00,000 |
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Value of firm's goodwill |
= Capitalised value of firm - Net worth of the new firm =25,00,000 - 15,00,000 = ` 10,00,000 |
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Ajay's share of goodwill |
= 10,00,000 × 1/5 = ` 2,00,000 |
Revaluation
of Assets and reassessment of Liabilities
Question 42:
Arun and
Vijay are partners in a firm sharing profit & loss in the ratio of 3: 2.
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BALANCE
SHEET (Extract) |
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Liabilities |
` |
Assets |
` |
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Machinery |
2,00,000 |
If the value
of machinery in the Balance Sheet is excess by 33 1/3, find the value of
machinery to be shown in the New Balance Sheet.
Answer:
If the value
of machinery in the Balance Sheet is excess by 33 1/3
Then the
book value is 100+33 1/3= 133 1/3
Excess Value
of Machinery is 2,00,000×33 1/3 ÷
133 1/3
Or
= 2,00,000×100/3 ×3/400 = 50,000
Value of
machinery to be shown in the New Balance Sheet = 2,00,000-50,000=
1,50,000
Question
43: Pass entries in
the firm's Journal for the following on admission of a partner:
(i) Machinery be reduced by 16,000
and Building be appreciated by 40,000.
(ii) A
provision be created for Doubtful Debts @ 5% of
Debtors amounting to 80,000.
(iii)
Provision for warranty claims be increased by 12,000.
(iv) Furniture (Book Value 50,000) is to be reduced by 40%.
(v)
Furniture (Book Value 50,000) is to be reduced to 40%.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
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(i) |
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a. |
Revaluation
A/c |
Dr. |
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16,000 |
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To Machinery A/c |
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16,000 |
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(Being
Machinery be reduced) |
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b. |
Building
A/c |
Dr. |
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40,000 |
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To Revaluation A/c |
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40,000 |
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(Being
Building be appreciated) |
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(ii) |
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Revaluation
A/c |
Dr. |
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4,000 |
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To Provision for Doubtful Debts A/c |
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4,000 |
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(Being
provision be created for Doubtful Debts @ 5% of Debtors amounting to 80,000) |
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(iii) |
Revaluation
A/c |
Dr. |
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12,000 |
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To Provision for Warranty Claims A/c |
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12,000 |
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(Being
Provision for warranty claims be increased) |
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(iv) |
Revaluation
A/c |
Dr. |
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20,000 |
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To Furniture A/c |
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20,000 |
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(Being
Furniture (Book Value 50,000) is to be reduced by 40%) |
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(v) |
Revaluation
A/c |
Dr. |
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30,000 |
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To Furniture A/c |
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30,000 |
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(Being
Furniture (Book Value 50,000) is to be reduced to 40%) |
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Question 44:
Pass
entries in firm's Journal for the following on admission of a partner:
(i) Unrecorded Investments worth `20,000 are to be accounted.
(ii) Unrecorded liability towards suppliers for ` 5,000 is to be accounted.
(iii) An item of `
1,600 included in Sundry Creditors is not likely to be claimed and hence should
be written back.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
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(i) |
Investment A/c |
Dr. |
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20,000 |
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To Revaluation
A/c |
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20,000 |
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(Investments recorded) |
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(ii) |
Revaluation A/c |
Dr. |
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5,000 |
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To
Creditors A/c |
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5,000 |
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(Liability recorded) |
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(iii) |
Creditors A/c |
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To Revaluation
A/c |
Dr |
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1,600 |
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(Liability decreased) |
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1,600 |
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Question 45:
X and Y are partners sharing profits in the ratio of 3 : 2. They admitted Z as a partner for
1/4th share of profits. At the time of admission of Z, Investments
appeared at ` 80,000. Half
of the investments to be taken by X and Y in their
profit-sharing ratio at book value. Remaining investments were valued
at ` 50,000. Pass the necessary Journal entries.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
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(i) |
X’s Capital A/c |
Dr. |
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24,000 |
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Y’s Capital A/c |
Dr. |
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16,000 |
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To Investments
A/c |
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40,000 |
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(Half of the investments taken over
by X and Y) |
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(ii) |
Investment A/c |
Dr. |
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10,000 |
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To Revaluation
A/c |
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10,000 |
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(Value of investments increased) |
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(iii) |
Revaluation A/c |
Dr. |
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10,000 |
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To
X’s Capital A/c |
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6,000 |
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To
Y’s Capital A/c |
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4,000 |
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(Profit on revaluation transferred
to Partners’ Capital A/c) |
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Ts Grewal Solution 2025-2026
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Class 12 / Volume – I