Question 56:
A and B are carrying on business in partnership and sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2024 stood as:
|
|
||||
|
Liabilities |
` |
Assets |
` |
|
|
Creditors |
11,800 |
Cash |
1,500 |
|
|
General
Reserve |
|
20,000 |
|
|
|
A's
Capital |
51,450 |
|
Stock |
28,000 |
|
B's
Capital |
36,750 |
88,200 |
Debtors |
19,500 |
|
|
|
|
Furniture |
2,500 |
|
|
|
|
Machinery |
48,500 |
|
|
|
|
Goodwill
|
20,000 |
|
|
|
|
|
|
|
|
|
1,20,000 |
|
1,20,000 |
|
|
|
|
|
|
They
admit C into partnership on 1st April, 2024 and give him 1/8th share
in future profits on the following terms:
(a) Goodwill of the firm be valued at twice the average of the last three years'
profits which amounted to ` 21,000; ` 24,000 and ` 25,560.
(b) C is to bring cash for the amount of his share of goodwill.
(c) C is to bring cash `15,000 as his capital.
Pass Journal entries recording these transactions, draw out the Balance Sheet
of the new firm and determine new profit-sharing ratio.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
(i) |
|
|
|
||
|
A’s Capital A/c |
Dr. |
|
12,000 |
|
|
|
B’s Capital A/c |
Dr. |
|
8,000 |
|
|
|
|
To Goodwill A/c |
|
|
|
20,000 |
|
|
(Being Goodwill written off) |
|
|
|
|
|
(ii) |
Cash A/c |
Dr. |
|
20,880 |
|
|
|
To C’s Capital A/c |
|
|
|
15,000 |
|
|
To Premium for Goodwill A/c |
|
|
|
5,880 |
|
|
(Being capital and premium for goodwill received in cash) |
|
|
|
|
|
(iii) |
Premium for Goodwill A/c |
Dr. |
|
5,880 |
|
|
|
To A’s Capital A/c |
|
|
|
3,528 |
|
|
To B’s Capital A/c |
|
|
|
2,352 |
|
|
(Being premium for goodwill transferred to sacrificing partners) |
|
|
|
|
|
(iv) |
General reserves A/c |
Dr. |
|
20,000 |
|
|
|
To A’s Capital A/c |
|
|
|
12,000 |
|
|
To B’s Capital A/c |
|
|
|
8,000 |
|
|
(Being General reserves transferred to old partners) |
|
|
|
|
|
Capital account |
|||||||
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
To Goodwill A/c |
12,000 |
8,000 |
- |
By Balance B/d |
51450 |
36750 |
- |
|
To Balance c/d |
54,978 |
39,102 |
15,000 |
By Cash A/c |
- |
- |
15,000 |
|
|
|
|
|
By Premium A/c |
3,528 |
2,352 |
- |
|
|
|
|
|
By Reserve A/c |
12,000 |
8,000 |
- |
|
|
|
|
|
|
|
|
|
|
|
66,978 |
47,102 |
15,000 |
|
66,978 |
47,102 |
15,000 |
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET as at 31st
March, 2024 |
|||
|
Liabilities |
` |
Assets |
` |
|
Creditors |
11,800 |
Cash |
22,380 |
|
|
|
Stock |
28,000 |
|
Capital A/cs: |
|
Debtors |
19,500 |
|
A - 54,978 |
|
Furniture |
2,500 |
|
B - 39,102 |
|
Machinery |
48,500 |
|
C - 15,000 |
1,09,080 |
|
|
|
|
|
|
|
|
|
1,20,880 |
|
1,20,880 |
Calculation of New Profit Sharing Ratio
|
|
A |
|
B |
|
Old ratio= |
3 |
: |
2 |
C is admitted for 1/8 share of profit
Let combined share of all partners after admission of C be = 1
Combined share of A and B after C’s admission = 1 − C’s share
=1-1/8
=7/8
New
ratio= old ratio × combined share of X and Y
|
A’s |
=3/5×7/8 |
|
|
=21/40 |
|
B’s |
=2/5×7/8 |
|
|
=14/40 |
|
|
X |
|
Y |
|
Z |
|
New profit sharing ratio= |
21/40 |
: |
14/40 |
: |
1/8 |
|
= |
21/40 |
: |
14/40 |
: |
5/40 |
|
= |
21 |
: |
14 |
: |
5 |
Working Note-
WN1
Calculation of goodwill
Average
profit =21,000+25,000+25,560/3=23,520
Goodwill=
Average profit × no. of purchases years’
Goodwill= 23,520×2 =47,040
C‘s of goodwill=47,040×1/8 =5,880
WN2
Distribution
of premium of goodwill
A will get =5,880×3/5=3528
B will get =5,880×2/5=2352
Question 57:
Balance Sheet of J and K who share profits in the ratio of 3 : 2 is as follows:
|
BALANCE SHEET as at 31st March, 2024 |
||||
|
Liabilities |
` |
Assets |
` |
|
|
Reserve |
1,00,000 |
Cash |
2,00,000 |
|
|
J's
Capital |
1,50,000 |
|
Other
Assets |
1,50,000 |
|
K's
Capital |
1,00,000 |
2,50,000 |
|
|
|
|
3,50,000 |
|
3,50,000 |
|
|
|
|
|
|
|
M joins the firm from 1st April, 2024 for a half share in the future
profits. He is to pay ` 1,00,000 for goodwill and `3,00,000 for capital. Draft
the Journal entries and prepare Balance Sheet in each of the following cases:
(a) If M acquires his share of profit from the firm in the
profit-sharing ratios of the partners.
(b) If M acquires his share of profits from the firm in equal
proportions from the original partners.
(c) If M acquires his share of profit in the ratio of 3 : 1 from the original partners, ascertain the future
profit-sharing ratio of the partners in each case.
Answer:
(a) If M acquires his share of profit from the firm in the original
ratios of the partners.
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
2024 Apr.1 |
|
|
|
|
|
|
|
To M’s Capital A/c |
|
|
3,00,000 |
|
|
|
To Premium for Goodwill A/c |
|
|
1,00,000 |
|
|
|
(M brought capital and his of goodwill in cash) |
|
|
|
|
|
|
|
|
|
|
|
|
Apr.1 |
Premium for Goodwill A/c |
Dr. |
|
1,00,000 |
|
|
|
To J’s Capital A/c |
|
|
60,000 |
|
|
|
To K’s Capital A/c |
|
|
40,000 |
|
|
|
(Premium for Goodwill distributed
between |
|
|
|
|
|
|
|
|
|
|
|
|
Apr.1 |
Reserve A/c |
Dr. |
|
1,00,000 |
|
|
|
To J’s Capital A/c |
|
|
60,000 |
|
|
|
To K’s Capital A/c |
|
|
40,000 |
|
|
|
(Reserve distribution between M and J in their old ratio) |
|
|
|
|
|
|
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
|
|
|
|
|
Cr. |
|
Particulars |
J |
K |
M |
Particulars |
J |
K |
M |
|
|
|
|
|
Balance b/d |
1,50,000 |
1,00,000 |
|
|
|
|
|
|
Cash |
|
|
3,00,000 |
|
|
|
|
|
Premium for |
60,000 |
40,000 |
|
|
Balance c/d |
2,70,000 |
1,80,000 |
3,00,000 |
Reserve |
60,000 |
40,000 |
|
|
|
2,70,000 |
1,80,000 |
3,00,000 |
|
2,70,000 |
1,80,000 |
3,00,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2024 after M’s admission |
|||
|
Liabilities |
` |
Assets |
` |
|
|
|
Cash (2,00,000 + 4,00,000) |
6,00,000 |
|
J’s Capital |
2,70,000 |
Other Assets |
1,50,000 |
|
K’s Capital |
1,80,000 |
|
|
|
M’s Capital |
3,00,000 |
|
|
|
|
7,50,000 |
|
7,50,000 |
|
|
|
|
|
Calculation of Future (New) Profit Sharing Ratio
|
|
M |
J |
|
OLD RATION |
3 : |
2 : |
M is admitted for ½ share of profit
Let the combined share of all partners after admission of M be = 1
Combined share of J and K after M’s admission = 1 − M’s share
=1-1/2
=1/2
New
ratio= old ratio –Combined share of B and C
J=
3/5×1/2=3/10
k=2/5×1/2=2/10
|
|
J |
|
K |
|
M |
|
New profit sharing ratio= |
3/10 |
: |
2/10 |
: |
1/2 |
|
= |
3/10 |
: |
2/10 |
: |
5/10 |
|
= |
3 |
: |
2 |
: |
5 |
Working Notes-
WN1
Distribution of Premium for Goodwill (in sacrificing ratio)
J will get =1,00,000×3/5=60,000
K will get =1,00,000×2/5=40,000
WN2
Distribution of General Reserve (in old ratio)
J will get =1,00,000×3/5=60,000
K will get =1,00,000×2/5=40,000
(b) If M acquires his share of profit from the
firm in equal proportions from the original partners.
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
2022 |
|
|
|
|
|
|
April 1 |
Reserve A/c |
Dr. |
|
1,00,000 |
|
|
|
To J’s Capital A/c |
|
|
60,000 |
|
|
|
To K’s Capital A/c |
|
|
40,000 |
|
|
|
(Reserve distributed between J and K in old ratio) |
|
|
|
|
|
|
|
|
|
|
|
|
April 1 |
Cash A/c |
Dr. |
|
4,00,000 |
|
|
|
To M’s Capital A/c |
|
|
3,00,000 |
|
|
|
To J’s Premium for Goodwill A/c |
|
|
1,00,000 |
|
|
|
(M brought capital and his share of goodwill) |
|
|
|
|
|
|
|
|
|
|
|
|
April 1 |
Premium for Goodwill A/c |
Dr. |
|
1,00,000 |
|
|
|
To J’s Capital A/c |
|
|
50,000 |
|
|
|
To K’s Capital A/c |
|
|
50,000 |
|
|
|
(Premium for Goodwill distributed between J and K in sacrificing Raito i.e 1:1) |
|
|
|
|
|
|
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
J |
K |
M |
Particulars |
J |
K |
M |
|
|
|
|
|
Balance b/d |
1,50,000 |
1,00,000 |
|
|
|
|
|
|
Cash |
|
|
3,00,000 |
|
|
|
|
|
Premium for |
50,000 |
50,000 |
|
|
Balance c/d |
2,60,000 |
1,90,000 |
3,00,000 |
Reserve |
60,000 |
40,000 |
|
|
|
2,60,000 |
1,90,000 |
3,00,000 |
|
2,60,000 |
1,90,000 |
3,00,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2022 after M’s admission |
|||
|
Liabilities |
` |
Assets |
` |
|
J’s Capital |
2,60,000 |
Cash (2,00,000 + 4,00,000) |
6,00,000 |
|
K’s Capital |
1,90,000 |
Others Assets |
1,50,000 |
|
M’s Capital |
3,00,000 |
|
|
|
|
7,50,000 |
|
7,50,000 |
|
|
|
|
|
Calculation of future (new) profit sharing ratio
|
|
J |
K |
|
Old ratio |
3 : |
2 |
M is admitted for ½ share of profit
J and K each will sacrifice in favour of M=1/2×1/2=1/4
New
ratio= old ratio – Sacrificing Ratio
|
J’s |
=3/5-1/4 |
|
|||||
|
|
=7/20 |
|
|||||
|
k’s |
=2/5-1/4 |
|
|||||
|
|
=3/20 |
|
|||||
|
|
J |
|
K |
|
M |
|||
|
New profit sharing ratio= |
7/20 |
: |
3/20 |
: |
1/2 |
|||
|
= |
7/20 |
: |
3/20 |
: |
10/20 |
|||
|
= |
7 |
: |
3 |
: |
10 |
|||
|
|
J |
|
K |
|
|
Sacrificing ratio= |
1/4 |
: |
1/4 |
=1:1 |
Working Notes:
WN1
Distribution of Premium for Goodwill (in Sacrificing ratio)
J and K each will get =1,00,000×1/2=50,000
WN2
Distribution of General Reserve (in old ratio)
J will get =1,00,000×3/5=60,000
K will get =1,00,000×2/5=40,000
(c) If M acquires his
share of profit in the ratio of 3:1 from the original partner
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
2022 Apr.1 |
|
|
|
|
|
|
|
To J’s Capital A/c |
|
|
60,000 |
|
|
|
(Reserve distributed between J and K at the time of M’s admission) |
|
|
|
|
|
|
|
|
|
|
|
|
April 1 |
Cash A/c |
Dr. |
|
4,00,000 |
|
|
|
To M’s Capital A/c |
|
|
3,00,000 |
|
|
|
To Premium for Goodwill A/c |
|
|
1,00,000 |
|
|
|
(M brought Capital his share of Goodwill) |
|
|
|
|
|
|
|
|
|
|
|
|
April 1 |
Premium for Goodwill A/c |
Dr. |
|
1,00,000 |
|
|
|
To J’s Capital A/c |
|
|
75,000 |
|
|
|
To K’s Capital A/c |
|
|
25,000 |
|
|
|
(Premium for Goodwill distributed
between |
|
|
|
|
|
|
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
J |
K |
M |
Particulars |
J |
K |
M |
|
|
|
|
|
Balance b/d |
1,50,000 |
1,00,000 |
|
|
|
|
|
|
Cash |
|
|
3,00,000 |
|
|
|
|
|
Premium for |
75,000 |
25,000 |
|
|
|
|
|
|
Reserve |
60,000 |
40,000 |
|
|
Balance c/d |
2,85,000 |
1,65,000 |
3,00,000 |
|
|
|
|
|
|
2,85,000 |
1,65,000 |
3,00,000 |
|
2,85,000 |
1,65,000 |
3,00,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2022 after M’s admission |
|||
|
Liabilities |
` |
Assets |
` |
|
J’s Capital |
2,85,000 |
Cash (2,00,000 + 4,00,000) |
6,00,000 |
|
K’s Capital |
1,65,000 |
Other Assets |
1,50,000 |
|
M’s Capital |
3,00,000 |
|
|
|
|
7,50,000 |
|
7,50,000 |
|
|
|
|
|
Calculation of Future (New) Profit Sharing Ratio
|
|
J |
K |
|
Old ratio |
3 : |
2 |
M is
admitted for ½ share of profit
|
J’s sacrificing rato |
=1/2×3/4 |
|
|
=2/8 |
|
K’s sacrificing rato |
=1/2×1/4 |
|
|
=1/8 |
New
Ratio = Old Ratio − Sacrificing Ratio
|
J’s |
=3/5-3/8 |
|
|||||
|
|
=9/40 |
|
|||||
|
K’s |
=2/5-1//8 |
|
|||||
|
|
=11/40 |
|
|||||
|
|
J |
|
K |
|
M |
||
|
New profit sharing ratio= |
9/40 |
: |
11/40 |
: |
1/2 |
||
|
= |
9/40 |
: |
11/40 |
: |
20/40 |
||
|
= |
9 |
: |
11 |
: |
20 |
||
Working
Notes:
WN1
Distribution of Premium for Goodwill (in sacrificing ratio)
J will get =1,00,000×3/4=75,000
K will get =1,00,000×1/4=25,000
WN2
Distribution of Reserve (in old ratio)
J will get =1,00,000×3/5=60,000
K will get =1,00,000×2/5=40,000
Question 58:
Given below is the Balance Sheet of A and B, who are carrying on partnership business on 31st March, 2024. A and B share profits and losses in the ratio of 2 : 1.
|
BALANCE SHEET OF A AND B |
||||
|
Liabilities |
` |
Assets |
` |
|
|
Bills Payable |
10,000 |
Cash in Hand |
10,000 |
|
|
Creditors |
58,000 |
Cash at Bank |
40,000 |
|
|
Outstanding Expenses |
2,000 |
Sundry
Debtors |
60,000 |
|
|
Capital A/cs: |
|
Stock |
40,000 |
|
|
A |
1,80,000 |
|
Plant |
1,00,000 |
|
B |
1,50,000 |
3,30,000 |
Building |
1,50,000 |
|
|
4,00,000 |
|
4,00,000 |
|
|
|
|
|
|
|
C is admitted as a partner on 1st April, 2024 on the following terms:
(a) C will bring ` 1,00,000 as his capital and ` 60,000 as his share of goodwill for 1/4th share in the
profits.
(b) Plant 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) A provision for doubtful debts is to be created at 5% of sundry debtors.
(e) Creditors were unrecorded to the extent of ` 1,000.
Pass the necessary Journal entries, prepare the Revaluation Account and
Partners' Capital Accounts, and show the Balance Sheet after the admission of C.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
` |
` |
|
|
2024 |
Bank A/c |
Dr. |
|
1,60,000 |
|
|
Mar 31 |
To C’s Capital A/c |
|
|
1,00,000 |
|
|
|
To Premium for Goodwill A/c |
|
|
60,000 |
|
|
|
(Capital and premium for goodwill brought by C for 1/4 share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
60,000 |
|
|
|
To A’s Capital A/c |
|
|
|
40,000 |
|
|
To B’s Capital A/c |
|
|
|
20,000 |
|
|
(Premium for Goodwill brought transferred to old partners’ capital account in their sacrificing ratio) |
|
|
|
|
|
|
Plant A/c |
Dr. |
|
20,000 |
|
|
|
Building A/c |
Dr. |
|
15,000 |
|
|
|
To Revaluation A/c |
|
|
|
35,000 |
|
|
(Increase in value of assets) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
8,000 |
|
|
|
To Stock |
|
|
|
4,000 |
|
|
To Provision for
Doubtful Debts A/c |
|
|
3,000 |
|
|
|
To Creditors A/c (Unrecorded) |
|
|
|
1,000 |
|
|
(Assets and liabilities revalued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
27,000 |
|
|
|
To A’s Capital A/c |
|
|
|
18,000 |
|
|
To B’s Capital A/c |
|
|
|
9,000 |
|
|
(Profit on revaluation transferred to old partners) |
|
|
|
|
|
Revaluation Account |
|||||
|
Dr. |
Cr. |
||||
|
Particulars |
` |
Particulars |
` |
||
|
Stock |
4,000 |
Plant |
20,000 |
||
|
Provision for Doubtful Debts |
3,000 |
Building |
15,000 |
||
|
Creditors (Unrecorded) |
1,000 |
|
|
||
|
Revaluation Profit |
|
|
|
||
|
A’s Capital |
18,000 |
|
|
|
|
|
B’s Capital |
9,000 |
27,000 |
|
|
|
|
|
35,000 |
|
35,000 |
||
|
|
|
|
|
||
|
Partners’ Capital Account |
||||||||
|
Dr. |
Cr. |
|||||||
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
|
Balance c/d |
2,38,000 |
1,79,000 |
1,00,000 |
Balance b/d |
1,80,000 |
1,50,000 |
|
|
|
|
|
|
|
Bank |
|
|
1,00,000 |
|
|
|
|
|
|
Premium for Goodwill |
40,000 |
20,000 |
|
|
|
|
|
|
|
Revaluation |
18,000 |
9,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,38,000 |
1,79,000 |
1,00,000 |
|
2,38,000 |
1,79,000 |
1,00,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on March 31, 2024 |
|||||
|
Liabilities |
` |
Assets |
` |
||
|
Bills Payable |
10,000 |
Cash in Hand |
10,000 |
||
|
Creditors |
59,000 |
Cash at Bank |
2,00,000 |
||
|
Outstanding Expenses |
2,000 |
Sundry Debtors |
60,000 |
|
|
|
Capital: |
|
Less: Provision for Doubtful Debt |
3,000 |
57,000 |
|
|
A |
2,38,000 |
|
Stock |
36,000 |
|
|
B |
1,79,000 |
|
Plant |
1,20,000 |
|
|
C |
1,00,000 |
5,17,000 |
Building |
1,65,000 |
|
|
|
5,88,000 |
|
5,88,000 |
||
|
|
|
|
|
||
Note: Since no information is given about the share of
sacrifice, it is assumed that the old partners are sacrificing in their old
profit sharing ratio.
Question 59:
The Balance Sheet of Madhu and Vidhi who are sharing profits in the ratio of 2 : 3 as at 31st March, 2016 is given below:
|
|
|||||
|
Liabilities |
` |
Assets |
` |
||
|
Madhu's Capital |
5,20,000 |
Land
and Building |
3,00,000 |
||
|
Vidhi's Capital |
3,00,000 |
Machinery |
2,80,000 |
||
|
General
Reserve |
30,000 |
Stock |
80,000 |
||
|
Bills
Payable |
1,50,000 |
Debtors |
3,00,000 |
|
|
|
|
|
|
Less: Provision |
10,000 |
2,90,000 |
|
|
|
|
|
|
|
|
|
|
|
Bank |
50,000 |
|
|
|
|
|
|
||
|
|
|
|
|
||
|
|
10,00,000 |
|
10,00 ,000 |
||
|
|
|
|
|
||
Madhu and Vidhi decided to
admit Gayatri as a new partner from 1st April, 2016
and their new profit-sharing ratio will be 2 : 3 : 5. Gayatri brought
` 4,00,000 as
her capital and her share of goodwill premium in cash.
(a) Goodwill of the firm was valued at
` 3,00,000.
(b) Land and Building was found undervalued by ` 26,000.
(c) Provision for doubtful debts was to be made equal to 5% of the
debtors.
(d) There was a claim of ` 6,000 on account of workmen compensation.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet
of the reconstituted firm.
Answer:
|
Revaluation Account |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
` |
Particulars |
` |
||||
|
Provision for Doubtful Debts |
5,000 |
Land &Building |
26,000 |
||||
|
Claim against Workmen Compensation |
6,000 |
|
|
||||
|
Revaluation Profit |
|
|
|
||||
|
|
Madhu’s Capital |
6,000 |
|
|
|
||
|
|
Vidhi’s Capital |
9,000 |
15,000 |
|
|
||
|
|
26,000 |
|
26,000 |
||||
|
|
|
|
|
||||
|
Partners’ Capital
Account |
||||||||
|
Dr. |
Cr. |
|||||||
|
Particulars |
Madhu |
Vidhi |
Gayatri |
Particulars |
Madhu |
Vidhi |
Gayatri |
|
|
Balance
c/d |
5,98,000 |
4,17,000 |
4,00,000 |
Balance
b/d |
5,20,000 |
3,00,000 |
|
|
|
|
|
|
|
Bank |
|
|
4,00,000 |
|
|
|
|
|
|
General
Reserve |
12,000 |
18,000 |
|
|
|
|
|
|
|
Premium
for Goodwill |
60,000 |
90,000 |
|
|
|
|
|
|
|
Revaluation |
6,000 |
9,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,98,000 |
4,17,000 |
4,00,000 |
|
5,98,000 |
4,17,000 |
4,00,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on March 31, 2016 |
|||||
|
Liabilities |
` |
Assets |
` |
||
|
Bills Payable |
1,50,000 |
Bank (50,000 + 4,00,000 + 1,50,000) |
|
6,00,000 |
|
|
Claim for Workmen Compensation |
6,000 |
Sundry Debtors |
3,00,000 |
|
|
|
Capital: |
|
Less: Provision for Doubtful
Debt |
15,000 |
2,85,000 |
|
|
Madhu |
5,98,000 |
|
Stock |
80,000 |
|
|
Vidhi |
4,17,000 |
|
Machinery |
2,80,000 |
|
|
Gayatri |
4,00,000 |
14,15,000 |
Land &Building |
3,26,000 |
|
|
|
15,71,000 |
|
15,71,000 |
||
|
|
|
|
|
||
Working Notes:
WN1: Calculation of Gayatri’s Share of Goodwill
Gayatri's share=3,00,000×5/10=1,50,000 to be shared in 2:3
WN1: Calculation of
Sacrificing Ratio
Sacrificing Ratio = Old Ratio – New Ratio
Madhu=2/5−2/10=2/10
Vidhi=3/5−3/10=−3/10
Question 60:
A, B and C are
partners sharing profits and losses in the ratio of 3 :
2 : 1 respectively. Their Balance Sheet as at 31st March, 2024 is as follows:
|
Liabilities |
` |
Assets |
` |
|
|
Capital
A/cs: |
|
Land
and Building |
50,000 |
|
|
A |
60,000 |
|
Plant
and Machinery |
40,000 |
|
B |
60,000 |
|
Furniture |
30,000 |
|
C |
40,000 |
1,60,000 |
Stock |
20,000 |
|
Creditors |
|
30,000 |
Debtors |
30,000 |
|
Bills
Payable |
|
10,000 |
Bills
Receivable |
20,000 |
|
|
|
|
Bank |
10,000 |
|
|
|
|
|
|
|
|
|
2,00,000 |
|
2,00,000 |
|
|
|
|
|
|
D is admitted as a partner on 1st April, 2024 for equal share.
His capital is to be ` 50,000.
Following adjustments are agreed on D's admission:
(a) Out of the Creditors, a sum of
` 10,000 is due to D,
it will be adjusted against his capital.
(b) Advertisement Expenses of ` 1,200 are to be carried forward as Prepaid Expenses.
(c) Expenses debited in the Profit and Loss Account includes a sum of ` 2,000 paid for B's personal expenses.
(d) A Bill of Exchange of ` 4,000, which was previously discounted with the bank, was dishonoured on 31st March, 2019 but entry was not passed
for dishonour.
(e) A Provision for Doubtful Debts @ 5% is to be created against Debtors.
(f) Expenses on Revaluation amounted to
` 2,100 is paid by A.
Prepare necessary Ledger Accounts and Balance Sheet after D's
admission.
Answer:
|
Revaluation Account |
||||
|
Dr. |
Cr. |
|||
|
Particulars |
` |
Particulars |
` |
|
|
Provision for doubtful Debts |
1,700 |
Prepaid Advt. Expense |
1,200 |
|
|
A’s Capital (Rev. Exp.) |
2,100 |
B’s Capital (Personal Exp.) |
2,000 |
|
|
|
|
|
|
|
|
|
|
Loss transferred to |
|
|
|
|
|
A Capital |
300 |
|
|
|
|
B Capital |
200 |
|
|
|
|
C Capital |
100 |
600 |
|
|
3,800 |
|
|
3,800 |
|
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||||
|
Dr. |
Cr. |
||||||||
|
Particulars |
A |
B |
C |
D |
Particulars |
A |
B |
C |
D |
|
Revaluation |
|
2,000 |
|
|
Balance b/d |
60,000 |
60,000 |
40,000 |
|
|
(Personal Exp.) |
|
|
|
|
Creditors |
|
|
|
10,000 |
|
Revaluation (Loss) |
300 |
200 |
100 |
|
Cash |
|
|
|
40,000 |
|
Balance c/d |
61,800 |
57,800 |
39,900 |
50,000 |
Revaluation (Exp.) |
2,100 |
|
|
|
|
|
62,100 |
60,000 |
40,000 |
50,000 |
|
62,100 |
60,000 |
40,000 |
50,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01,2024 after D’s admission |
|||||
|
Liabilities |
` |
Assets |
` |
||
|
Capital Accounts: |
|
Land and Building |
50,000 |
||
|
A |
61,800 |
|
Plant and Machinery |
40,000 |
|
|
B |
57,800 |
|
Furniture |
30,000 |
|
|
C |
39,900 |
|
Prepaid Advt. Expenses |
1,200 |
|
|
D |
50,000 |
2,09,500 |
Stock |
20,000 |
|
|
|
|
|
Debtors |
30,000 |
|
|
Creditors |
30,000 |
|
Add: B/R dishonor |
4,000 |
|
|
Less: D’s Capital |
10,000 |
20,000 |
Less: 5% Provision for D Debts |
(1,700) |
32,300 |
|
Bill Payable |
10,000 |
|
|
|
|
|
|
|
Bills Receivable |
|
20,000 |
|
|
|
|
Bank (10,000 + 40,000 - 4,000) |
46,000 |
||
|
|
2,39,500 |
|
2,39,500 |
||
|
|
|
|
|
||
WN1: Distribution of Loss on Revaluation
A's Capital will be debited by=600×3/6= ` 300
B's Capital will be debited by=600×2/6= ` 200
C's Capital will be debited by=600×1/6= ` 100
Ts Grewal Solution 2024-2025
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Class 12 / Volume – I