Question 51:
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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Reserves and Accumulated Profits/Losses and Preparation of Revaluation Account
Question 52:
Give the Journal entry in the following cases:
(a) To distribute Workmen Compensation Reserve' of ₹ 90,000 at the time of admission of R, when there is no claim against it. The firm has two partners P and Q.
(b) To distribute Workmen Compensation Reserve of ₹ 90,000 at the time of admission of R, when there is a claim of ₹ 60,000 against it. The firm has two partners P andQ.
(c) To distribute Investment Fluctuatiorn Reserve of 60,000 at the time of admission of R, when Investmnents (market value ₹ 2,85,000) exists at ₹ 3,00,000. The firm has two partners P and Q.
(d) To distribute 'General Reserve of ₹ 60,000 at the time of admission of R, when ₹ 15,000 from General Reserve is to be transferred to Investment Fluctuation Reserve. The firm has two partners P and Q.
Answer:
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Date |
Particulars |
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L.F. |
(Dr.) ₹ |
(Cr.) ₹ |
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(a) |
Workmen Compensation Reserve |
Dr. |
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90,000 |
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To P's Capital A/c |
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45,000 |
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To Q's Capital A/c |
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45,000 |
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(b) |
Workmen Compensation Reserve |
Dr. |
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90,000 |
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To P's Capital A/c |
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15,000 |
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To Q's Capital A/c |
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15,000 |
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To Workmen Compensation Claim A/c |
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60,000 |
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(c) |
Investment Fluctuation Reserve A/c |
Dr. |
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60,000 |
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To Investment A/c |
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15,000 |
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To P's Capital A/c |
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22,500 |
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To Q's Capital A/c |
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22,500 |
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( |
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(d) |
General Reserve A/c |
Dr. |
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60,000 |
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To Investment Fluctuation Reserve A/c |
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15,000 |
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To P's Capital A/c |
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22,500 |
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To Q's Capital A/c |
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22,500 |
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( |
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Question 53:
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 RamandShyam 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:
WN1Calculation 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 54:
X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 1st April, 2026, 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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2026 |
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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:
WN1Calculation 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
WN2Calculation 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 55:
Sunny and Ujjwal were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 1st April, 2024, Timmy was admitted as a new partner for 1/5th share in profits which he acquired equally from Sunny and Ujjwal. On the date of Timmy's admission, the Balance Sheet of Sunny and Ujjwal showed investments at ₹ 5,00,000 and a balance of ₹ 2,00,000 in Investment Fluctuation Reserve.
Pass necessary Journal entries for treatment of Investment Fluctuation Reserve on the date of Timmy's
admission in each of the following cases:
(i) Market value of Investments was ₹ 5,00,000.
(ii) Market value of Investments was ₹ 3,00,000.
(iii) Market value of Investments was ₹ 2,00,000.
(CBSE 2025)
Answer:
Case: (i) Market value of Investments was ₹ 5,00,000.
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Date |
Particular |
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₹ (Dr.) |
₹ Cr. |
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Investment Fluctuation Reserve A/c |
Dr. |
2,00,000 |
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To Sunny's Capital A/c |
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1,20,000 |
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To Uijwal's Capital A/c |
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80,000 |
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(Being Investment Fluctuation Reserve distributed) |
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Case: (ii) Market value of Investments was ₹ 3,00,000.
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Date |
Particular |
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₹ (Dr.) |
₹ Cr. |
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Investment Fluctuation Reserve A/c |
Dr. |
2,00,000 |
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To Investment A/c |
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2,00,000 |
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(Being Investment Fluctuation Reserve transferred to investment account to compensate loss) |
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Case: (iii) Market value of Investments was ₹ 2,00,000.
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Date |
Particular |
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₹ (Dr.) |
₹ Cr. |
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Investment Fluctuation Reserve A/c |
Dr. |
2,00,000 |
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Revaluation A/c |
Dr. |
1,00,000 |
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To Investment A/c |
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3,00,000 |
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(Being Investment Fluctuation Reserve transferred to investment account to compensate loss and balance transferred to Revaluation Account) |
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Ts Grewal Solution 2026-2027
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Class 12 / Volume – I