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12th | Admission Of A Partner | Question No. 51 To 55 | Ts Grewal Solution 2023-2024

Double Entry Book Keeping Ts Grewal Vol. 1 2019 Solutions for Class 12 Commerce ACCOUNTANCY Chapter 5 - Admission Of A Partner

Question 51:


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:


Journal

Date

Particulars

L.F.

Debit

`

Credit

`

 

General Reserve A/c

Dr.

 

2,50,000

 

 

Profit and Loss A/c

Dr.

 

50,000

 

 

  To Ram’s Capital A/c

 

 

 

2,00,000

 

  To Shyam’s Capital A/c

 

 

 

1,00,000

 

(Adjustment of balance in General Reserve A/c and P&L A/c in old ratio)

 

 

 

 

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 52:


X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 1st April, 2023, 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:


Journal

Date

Particulars

L.F.

Debit

`

Credit

`

2019
April 1


General Reserve A/c


Dr.

 


1,50,000

 

 

  To X’s Capital A/c

 

 

 

90,000

 

  To Y’s Capital A/c

 

 

 

60,000

 

(Adjustment of balance in General Reserve A/c in old ratio)

 

 

 

 

 

 

 

 

 

 

 

X’s Capital A/c

Dr.

 

12,000

 

 

Y’s Capital A/c

Dr.

 

8,000

 

 

  To Profit and Loss A/c

 

 

 

20,000

 

(Adjustment of debit balance in P&L A/c in old ratio)

 

 

 

 

 

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


Question 53:


(a) X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. They admit W as partner for 1/6th share. Following is the extract of the Balance Sheet on the date of admission:

Liabilities

    ` 

 Assets

   ` 

General Reserve
Contingency Reserve
Profit and Loss A/c
 

   36,000

    6,000

  18,000

Advertisement Suspense A/c


 

 24,000



 

  Pass necessary Journal entries.
(b) Give the Journal entry to distribute 'Workmen Compensation Reserve' of  
 ` 72,000 at the time of admission of Z, when there is no claim against it. The firm has two partners X and Y.
(c) Give the Journal entry to distribute 'Workmen Compensation Reserve' of  
 ` 72,000 at the time of admission of Z, when there is claim of    ` 48,000 against it. The firm has two partners X and Y .
(d) Give the Journal entry to distribute 'Investment Fluctuation Reserve' of  
 ` 24,000 at the time of admission of Z, when Investment (Market Value    ` 1,10,000) appears at    ` 1,20,000. The firm has two partners X and Y.
(e) Give the Journal entry to distribute 'General Reserve' of  
 ` 4,800 at the time of admission of Z, when 20% of General Reserve is to be transferred to Investment Fluctuation Reserve. The firm has two partners X and Y .

 


Question 54:


(a)

An extract of the Balance Sheet of Murari and Vohra sharing profits & losses in the ratio of 3 :2 was as under:

Liabilities

`

Assets

`

General Reserve

30,000

Investments (Market Value ` 1,14,000)

1,20,000

Contingency Reserve

2,700

Advertisement Expenditure

6,000

Profit & Loss A/c

18,000

| (Deferred Revenue

 

Investment Fluctuation Reserve

9,000

 

 

Workmen Compensation Reserve

7,200

 

 

Employees Provident Fund

20,000

 

 

 

 

 

 

New Partner Krishna was admitted for 1/5th share of profits. A claim on account of Workmen Compensation Reserve is estimated for Rs. 900.

Journal entries to adjust accumulated profits and losses.

 

(b) 

A, B and C were partners sharing profits and losses in the ratio of 6 : 3 : 1. They decide to take D into partnership with effect from 1st April, 2023. The new profit-sharing ratio between A, B, C and D will be 3 : 3 : 3 : 1. They also decide to record the effect of the following without affecting their book values, by passing a single adjustment entry:

 

Book Values  ` 

General Reserve

 1,50,000

Contingency Reserve

60,000

Profit and Loss A/c (Cr.)

 90,000

Advertisement Suspense A/c (Dr.)

1,20,000

Pass the necessary single adjustment entry through the Partner's Current Account. 

 

Answer:


Case (a)

Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 (i) 

 

 

 

 

Investment Fluctuation Reserve A/c

Dr.

 

6,000

 

 

 To Investment A/c

 

 

 

6,000

 

(Being )

 

 

 

 

 (ii)

 

 

 

 

 

 

Workmen Compensation Reserve A/c

Dr.

 

900

 

 

 To Workmen Compensation Claim A/c

 

 

 

900

 

 

 

 

 

(iii)

General Reserve

Dr.

 

30,000

 

 

Contingency Reserve

 Dr.

 

2,700

 

 

Profit & Loss A/c

Dr.

 

18,000

 

 

Investment Fluctuation Reserve A/c

Dr.

 

3,000

 

 

Workmen Compensation Reserve A/c

Dr.

 

6,300

 

 

 To Murari’s Capital A/c

 

 

 

36,000

 

 To Vohra’s Capital A/c

 

 

 

24,000

 

(Being balance of reserves transferred to capital accounts )

 

 

 

 

(iv)

Murari’s Capital A/c

 Dr.

 

3,600

 

 

Vohra’s Capital A/c

 Dr.

 

2,400

 

 

  To Advertisement Expenditure

 

 

 

6,000

 

Case (b)

 

Journal

Date

Particulars

L.F.

Debit

`

Credit

`

(A)

 

 

 

 

 

(i)

General Reserve A/c

Dr.

 

36,000

 

 

Contingency Reserve A/c

Dr.

 

6,000

 

 

Profit & Loss A/c

Dr.

 

18,000

 

 

      To X’s Capital A/c

 

 

 

30,000

 

      To Y’s Capital A/c

 

 

 

18,000

 

      To Z’s Capital A/c

 

 

 

12,000

 

(Reserves distributed)

 

 

 

 

 

 

 

 

 

 

 (ii)

 X’s Capital A/c

Dr.

 

12,000

 

 

 Y’s Capital A/c

Dr.

 

7,200

 

 

 Z’s Capital A/c

Dr.

 

4,800

 

 

     To Advertisement Suspense A/c

 

 

 

24,000

 

(Advertisement Suspense distributed)

 

 

 

 

 

 

 

 

 

 

(B) 

 

 

 

 

 

April 1

Workmen Compensation Reserve A/c

Dr.

 

72,000

 

 

      To X’s Capital A/c

 

 

 

36,000

 

      To Y’s Capital A/c

 

 

 

36,000

 

(Workmen Compensation Reserve distributed)

 

 

 

 

 (C)

 

 

 

 

 

April 1

Workmen Compensation Reserve A/c

Dr.

 

72,000

 

 

      To Workmen Compensation Claim A/c

 

 

 

48,000

 

      To X’s Capital A/c

 

 

 

12,000

 

      To Y’s Capital A/c

 

 

 

12,000

 

(Surplus Workmen Compensation Reserve distributed)

 

 

 

 

 (D)

 

 

 

 

 

April 1

Investment Fluctuation Reserve A/c

Dr.

 

24,000

 

 

      To Investment A/c

 

 

 

10,000

 

      To X’s Capital A/c

 

 

 

7,000

 

      To Y’s Capital A/c

 

 

 

7,000

 

(Surplus Investment Fluctuation Reserve distributed)

 

 

 

 

 (E)

 

 

 

 

 

April 1

General  Reserve A/c

Dr.

 

4,800

 

 

      To Investment Fluctuation Reserve A/c

 

 

 

960

 

      To X’s Capital A/c

 

 

 

1,920

 

      To Y’s Capital A/c

 

 

 

1,920

 

(Surplus General Reserve distributed)

 

 

 

 

  (F)

 

 

 

 

 

April 1

C’s Current A/c

Dr.

 

36,000

 

 

D’s Current A/c

Dr.

 

18,000

 

 

    To A’s Current A/c

 

 

 

54,000

 

(Adjustment entry made)

 

 

 

 

Working Notes:

WN1: Calculation of Sacrifice or Gain

A :B :C=6:3:1 (Old Ratio)

A :B :C :D:=3:3:3:1 (New Ratio)

Sacrificing (or Gaining) Ratio = Old Ratio - New Ratio

A's share=6/10−3/10=6−3/10=3/10 (Sacrifice)

B's share=3/10−3/10=0

C's share=1/10−3/10=1−3/10=−2/10 (Gain)

D's share=0−1/10=−1/10 (Gain)


WN2: Calculation of Net Effect

General Reserve

1,50,000

Contingency Reserve

60,000

Profit and Loss A/c (Cr.)

90,000

 

3,00,000

Less: Advertisement Suspense A/c (Dr.)

1,20,000

 

1,80,000

 

WN 3: Adjustment of Net Effect
Amount credited in A's Current A/c = 1,80,000×3/10=​    ` 54,000

Amount debited in C's Current A/c = 1,80,000×2/10=​    ` 36,000

Amount debited in D's Current A/c = 1,80,000×1/10= ​   ` 18,000

Preparation of Revaluation Account and Partners' Capital Accounts

 

Question 55: Amit and Anil are partners sharing profits and losses in the ratio of 2 : 1. Their Balance Sheet as on 31st March, 2023 was as follows:


Liabilities

`

Assets

`

Sundry Creditors

58,000

Cash in Hand

5,000

General Reserve

12,000

Cash at Bank

45,000

Capital Acs:

 

Sundry Debtors

60,000

Amit 1,80,000

Anil 1,50,000

 

3,30,000

Machinery

1,00,000

 

 

Stock

40,000

 

 

Building

1,50,000

 

 

 

 

 

4,00,000

 

4,00,000

Ankit is admitted as a partner on the date of the Balance Sheet on the following terms:

(a) Ankit will bring in 1,00,000 as his capital and 60,000 as his share of goodwill for 1/4th share in profits.

(b) Machinery is to be appreciated to 1,20,000 and the value of building is to be appreciated by 10%.

(c) Stock is found overvalued by 4,000.

(d) General Reserve will continue to appear in the books of the reconstituted firm at its original value.

(e) A Provision for Doubtful Debts is to be created at 5% of debtors.

(f) Creditors were unrecorded to the extent of 1,000.

Prepare Revaluation Account and Partners Capital Accounts.

 

Answer:


 

Revaluation Account

Particulars

`

Particulars

`

Stock

4,000

Machinery

20,000

Provision for Doubtful Debts

3,000

Building

15,000

Creditors

1,000

 

 

Gain

27,000

 

 

 

 

 

 

 

35,000

 

35,000

 

Capital account

Particulars

Amit

Anil

Ankit

Particulars

Amit

Anil

Ankit

To Balance c/d

2,40,000

1,80,000

1,00,000

By Balance b/d

1,80,000

1,50,000

-

 

 

 

 

By Bank A/c

-

-

1,00,000

 

 

 

 

By Premium A/c

40,000

20,000

-

 

 

 

 

By Revaluation A/c

18,000

9,000

-

 

 

 

 

By Ankit’s Current A/c

2,000

1,000

 

 

2,40,000

1,80,000

1,00,000

 

2,40,000

1,80,000

1,00,000

 

 

 

 

 

 

 

 

 

Working note:

1.      Goodwill 60,000 shared in 2:1 in sacrificing ratio

Amit=60,000×2/3=40,000

Anil=60,000×1/3=20,000

 

Ankit’s Current A/c

Dr.

3,000

 

 To Amit’s capital A/c

 

 

2,000

 To Anil’s capital A/c

 

 

1,000

(Being sacrificing partners compensated for sacrifice)

 

 

 

 

 

2.      Profit of Revaluation shared in old ratio (2:1)

Amit=27,000×2/3=18,000

Anil=27,000×1/3=9,000

 

3.      General Reserve 12,000 adjusted in gaining and sacrificing ratio

Share of Ankit=12,000×1/4=3,000

 

3,000 compensated in 2:1 in sacrificing ratio

Amit=3,000 ×2/3=2,000

Anil=3,000 ×1/3=1,000

 

Note: since no information regarding how Ankit will compensate, will be compensated through Ankit’s current account.

 

 

Ts Grewal Solution 2023-2024

Click below for more Questions

Class 12 / Volume – I

Chapter 4 – Admission Of A Parnter

 

Question No. 1 To 5
Question No. 6 To 10
Question No. 11 To 15
Question No. 16 To 20
Question No. 21 To 25
Question No. 26 To 30
Question No. 31 To 35