Question 46:
At the time of admission of a
partner Suresh, assets and liabilities of Ramesh and Naresh were revalued as follows:
(a) A Provision for Doubtful Debts @10% was made on Sundry Debtors (Sundry
Debtors ` 50,000).
(b) Creditors were written back by
`5,000.
(c) Building was appreciated by 20% (Book Value of Building
`2,00,000).
(d) Unrecorded Investments were valued at `15,000.
(e) A Provision of `2,000
was made for an Outstanding Bill for repairs.
(f) Unrecorded Liability towards suppliers was `3,000.
Pass necessary Journal entries.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
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(i) |
Revaluation A/c |
Dr. |
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10,000 |
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To Provision for Doubtful Debts A/c |
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5,000 |
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To Reserve for outstanding Repairs Bill A/c |
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2,000 |
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To Creditors A/c |
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3,000 |
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(Increase in liabilities, decrease in assets and creation of reserves and provisions transferred to Revaluation Account) |
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(ii) |
Creditors A/c Dr. |
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5,000 |
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Building A/c Dr. |
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40,000 |
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Investments A/c Dr. |
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15,000 |
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To Revaluation A/c |
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60,000 |
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(Increase in assets and decrease
in liabilities |
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Revaluation A/c |
Dr. |
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50,000 |
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To Old Partners’ Capital A/c |
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50,000 |
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(Profit on Revaluation transferred to Partners’ Capital) |
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Question 47:
Om and Shiv are partners in a firm sharing profits equally.
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BALANCE SHEET (Extract) |
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Liabilities |
` |
Assets |
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` |
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Debtors Less: Provision for Doubtful Debts |
1,50,000 15,000 |
1,35,000 |
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An amount of `12,000 due from Mohan, a debtor, is to be written off as no longer receivable. Provision for Doubtful Debts on remaining debtors is to be maintained at the current rate.
What amount of Provision for Doubtful Debts should be credited to maintain its current rate?
Answer:
Current rate
Provision for Doubtful debts is 15,000×100/1,50,000=10%
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Debtors |
= |
1,50,000 |
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Less: Bad Debts |
= |
12,000 |
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Debtors After Bad Debts |
= |
1,38,000 |
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Provision for
Doubtful Debts @10% is to be maintained |
= |
13,800 |
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Firm already has Provision of 15,000 |
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Provision for Doubtful Debts Before Adjustment of Bad Debts |
= |
15,000 |
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Less: Bad Debts |
= |
12,000 |
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Balance of
Provision for Doubtful Debts after Adjustment of Bad Debts |
= |
3,000 |
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Amount of Provision
for Doubtful Debts should be credited to maintain its current rate =13,800-3,000=
10,800 |
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Question 48:
Ashish and Vishesh were partners sharing profits and
losses in the ratio of 3:2. Their Balance Sheet at 31st March, 2022 was as
under:
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BALANCE SHEET OF ASHISH AND VISHESH as at 31st
March, 2022 |
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Liabilities |
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` |
Assets |
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` |
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Creditors |
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30,000 |
Cash at Bank |
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50,000 |
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Outstanding Electricity
Bill |
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20,000 |
Debtors |
80,000 |
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Capital Acs:
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Less: Provision for Bad
Debts |
2,000 |
78,000 |
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Ashish |
3,00,000 |
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Stock L |
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12,000 |
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Vishesh |
2,00,000 |
5,00,000 |
Machinery |
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3,00,000 |
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Profit and Loss A/c |
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10,000 |
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5,50,000 |
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5,50,000 |
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On 1st April, 2022, Manya was admitted into the firm with 1/4th share in the
profits on the following terms:
(i)
Manya will bring 1,00,000 as
her capital and 50,000 as her share of goodwill premium in cash.
(ii) Outstanding electricity
bill will be paid off.
(iii) Stock was found over
valued by 12,000.
Pass the necessary Journal
entries in the books of the firm on Manya's
admission. (CBSE 2023)
Answer:
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Date |
Particulars |
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Dr. (`) |
Cr. (`) |
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(i) |
Outstanding Electricity
Bill A/c |
Dr. |
20,000 |
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To Bank A/c |
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20,000 |
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(Being Outstanding
electricity bill will be paid off) |
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(ii) |
Revaluation Ac |
Dr. |
12,000 |
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To Stock A/c |
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12,000 |
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(Being Stock was undervalued) |
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(iii) |
Ashish's Capital A/c |
Dr. |
7,200 |
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Vishesh's Capital A/c |
Dr. |
4,800 |
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To Revaluation A/c |
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12,000 |
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(Being loss transferred in
old ratio) |
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(iv) |
Ashish's Capital A/c |
Dr. |
6,000 |
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Vishesh's Capital A/c |
Dr. |
4,000 |
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To Profit & Loss A/c |
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10,000 |
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(Being accumulated loss
transferred in old ratio) |
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(v) |
Bank A/c |
Dr. |
1,50,000 |
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To Manya's Capital
A/c |
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1,00,000 |
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To Premium for Goodwill A/c |
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50,000 |
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(Being capital and her
share of goodwill premium brought) |
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(vi) |
Premium for Goodwill A/c |
Dr. |
50,000 |
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To Ashish's Capital A/c |
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30,000 |
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To Vishesh's
Capital A/c |
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20,000 |
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(Being Premium for Goodwill
transferred in sacrificing ratio) |
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Question 49:
Ram
and Shyam
were partners in a firm sharing profits and losses in the ratio of 2 : 1. Mohan was admitted for 1/3rd share in the
profits. On the date of Mohan's
admission, the Balance Sheet of Ram
and Shyam
showed General Reserve of ` 2,50,000 and a credit balance
of ` 50,000 in Profit and Loss Account. Pass necessary Journal
entries on the treatment of these items on Mohan's admission.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
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General Reserve A/c |
Dr. |
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2,50,000 |
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Profit and Loss A/c |
Dr. |
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50,000 |
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To Ram’s
Capital A/c |
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2,00,000 |
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To Shyam’s Capital A/c |
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1,00,000 |
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(Adjustment of
balance in General Reserve A/c and P&L A/c in old ratio) |
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Working Notes:
WN1 Calculation of Share of General Reserve &
P&L A/c
Ram 's share=3,00,000×2/3=2,00,000
Shyam 's share=3,00,000×1/3=1,00,000
Question 50:
X
and Y are
partners in a firm sharing profits and losses in the ratio of 3 : 2. On 1st April, 2024, they admit Z as a partner
for 1/5th share in profits. On that date, there was a balance of `
1,50,000 in General Reserve and a debit balance of ` 20,000 in the Profit and Loss Account of the firm. Pass
necessary Journal entries regarding adjustment of reserve and accumulated
profit/loss.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
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2019 |
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To X’s
Capital A/c |
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90,000 |
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To Y’s
Capital A/c |
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60,000 |
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(Adjustment of
balance in General Reserve A/c in old ratio) |
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X’s Capital A/c |
Dr. |
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12,000 |
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Y’s Capital A/c |
Dr. |
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8,000 |
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To Profit
and Loss A/c |
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20,000 |
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(Adjustment of
debit balance in P&L A/c in old ratio) |
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Working Notes:
WN1 Calculation of Share of General
Reserve
X's share=1,50,000×3/5=90,000
,
Y's share=1,50,000×2/5=60,000
WN2 Calculation of Share of
Debit Balance in P&L A/c
X's share=20,000×3/5=12,000,
Y's share=20,000×2/5=8,000
Ts Grewal Solution 2024-2025
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Class 12 / Volume – I