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12th | Admission of a Partner | Question No.  61 To 65 | Ts Grewal Solution 2022-2023

Question 61:


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 62:


Shyam and Sanjay were in partnership business sharing profits and losses in the ratio of 2 : 3 respectively. Their Balance Sheet as at 31st March, 2022 was:

 

Liabilities

   `

Assets

   `

Sundry Creditors

12,435

Cash in Hand

710

Capital A/cs:

 

Cash at Bank

11,925

Shyam

34,050

 

Sundry Debtors

5,500

Sanjay

34,050

68,100

Stock

18,000

 

 

 

Furniture

4,400

 

 

 

Building

40,000

 

 

 

 

 

 

 

 

 

 

 

 

80,535

 

80,535

 

 

 

 

 


On 1st April, 2022, they admitted Shanker into partnership for 1/3rd share in future profits on the following terms:
(a) Shanker is to bring in  
 ` 30,000 as his capital and    ` 20,000 as goodwill which is to remain in the business.
(b) Stock and Furniture are to be reduced in value by 10%.
(c) Building is to be appreciated by  
 ` 15,000.
(d) Provision of 5% is to be made on Sundry Debtors for Doubtful Debts.
(e) Unaccounted Accrued Income of  
 ` 2,400 to be provided for. A debtor, whose dues of    ` 4,800 were written off as bad debts, paid 50% in full settlement.
(f) Outstanding Rent amounted to  
 ` 4,800.
Show Profit and Loss Adjustment Account (Revaluation Account), Capital Accounts of Partners and opening Balance Sheet of the new firm.

Answer:

Profit and Loss Adjustment Account

Dr.

 

Cr.

Particulars

`

Particulars

`

Stock

1,800

Building

15,000

Furniture

440

Accrued Income

2,400

Provision for Doubtful Debts

275

Bad Debts Recovered

2,400

Outstanding Rent

4,800

 

 

Profit transferred to

 

 

 

Shyamlal Capital

4,994

 

Sanjay Capital

7,491

12,485

 

 

19,800

 

19,800

 

 

 

 

 

 

Partners’ Capital Account

Dr.

 

 

Cr.

Particulars

Shyamlal

Sanjay

Shanker

Particulars

Shyamlal

Sanjay

Shanker

 

 

 

 

Balance b/d

34,050

34,050

 

 

 

 

 

Cash A/c

 

 

30,000

 

 

 

 

Premium for
Goodwill

8,000

12,000

 

Balance c/d

47,044

53,541

30,000

Revaluation

4,994

7,491

 

 

47,044

53,541

30,000

 

47,044

53,541

30,000

 

 

 

 

 

 

 

 

 

Balance Sheet

as on April 01, 2022 after Shanker’s admission

Liabilities

`

Assets

`

Sundry Creditors                              

12,435

Cash in Hand (710 + 50,000 + 2,400)

53,110

Capital A/cs:

 

Cash at Bank

11,925

Shyamlal

47,044

 

Sundry Debtors

5,500

 

Sanjay

53,541

 

Less: Provision for D. Debts

275

5,225

Shanker

30,000

1,30,585

Stock (18,000 – 1,800)

16,200

Outstanding Rent

4,800

Building (40,000 + 15,000)

55,000

 

 

Furniture (4,400 – 440)

3,960

 

 

Accrued Income

2,400

 

1,47,820

 

1,47,820

 

 

 

 


Working Notes:

 

Shyamlal

 

Sanjay

Sacrificing ratio =

2      

:

3



WN1
Distribution of Premium for Goodwill (in sacrificing ratio)

Shyamlal will get=20,000×2/5= 
 ` 8,000

Sanjay will get=20,000×3/5=   ` 12,000

WN2
Distribution of Profit from Profit and Loss Adjustment Account (in old ratio)

Shyamlal will get =12,485×2/5=4,995

Sanjay will get =12,485×3/5=7,491

 

Question 63:


AB and C are partners sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Their Balance Sheet as at 31st March, 2022 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, 2022 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 01,2022 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 

 

Question 64:


On 31st March, 2017, the Balance Sheet of Abhir and Divya, who were sharing profits in the ratio of 3 : 1 was as follows:

BALANCE SHEET OF ABHIR AND DIVYA as on 31st March, 2017

Liabilities

`

Assets

`

Creditors

2,20,000

Cash at Bank

1,40,000

Employees' Provident Fund

1,00,000

Debtors

6,50,000

 

Investment Fluctuation Fund

1,00,000

  Less: Provision for Bad Debts

50,000

6.00,000

General Reserve

1,20,000

Stock

 

3,00,000

Capitals:

 

Investments (Market value    ` 4,40,000)

 

5,00,000

 Abhir

6,00,000

 

 

 

 Divya

4,00,000

10,00,000

 

 

 

15,40,000

 

15,40,000

 

 

 

 


They decided to admit Vibhor on 1st April, 2017 for 1/5th share.
(a) Vibhor shall bring  
 ` 80,000 as his share of goodwill premium.
(b) Stock was overvalued by  
 ` 20,000.
(c) A debtor whose dues of  
 ` 5,000 were written off as bad debts, paid    ` 4,000 in full settlement.
(d) Two months' salary @  
 ` 6,000 per month was outstanding.
(e) Vibhor was to bring in Capital to the extent of 1/5th of the total capital of the new firm.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.

Answer:

In the books of Abhir, Divya and Vibhor

Dr.

Revaluation A/c

Cr.

Particulars

`

Particulars

`

To Stock A/c

20,000

By Cash A/c

4,000

To Outstanding Salary A/c (6,000 × 2)

12,000

By Loss on Revaluation transferred to:

28,000

 

 

  Abhir’s Capital A/c

21,000

 

 

 

  Divya’s Capital A/c

7,000

 

 

 

 

 

 

32,000

 

32,000

 

 

 

 

 

Dr.

Partner’s Capital A/c

Cr.

Particulars

Abhir

 `

Divya

 `

Vibhor

 `

Particulars

Abhir

 `

Divya

 `

Vibhor

 `

To Revaluation A/c (Loss)

21,000

7,000

 

By balance b/d

6,00,000

4,00,000

 

 

 

 

 

By Bank A/c (WN2)

 

 

3,03,000

To balance c/d

7,59,000

4,53,000

3,03,000

By Premium for Goodwill A/c

60,000

20,000

 

 

 

 

 

By Investment Fluctuation

30,000

10,000

 

 

 

 

 

Fund A/c (1,00,000 – 40,000)

 

 

 

 

 

 

 

By General Reserve A/c

90,000

30,000

 

 

 

 

 

 

 

 

 

 

7,80,000

4,60,000

3,03,000

 

7,80,000

4,60,000

3,03,000

 

 

 

 

 

 

 

 


Working Notes:  
1. Calculation of New profit-sharing ratio

Vibhor’s Share of Profits

=

1/5

Remaining Profits

=

(1 – 1/5) = 4/5

Abhir’s New Share of Profits

=

(3/5 × 4/5) = 12/25

Divya’s New Share of Profits

=

(2/5 × 4/5) = 8/25

Abhir : Divya : Vibhor

=

12 : 8 : 5

 
2. Calculation of Vibhor’s Capital
Total Adjusted Capital of the Old Partners = Abhir’s Capital + Divya’s Capital=  
 ` (7,59,000 + 4,53,000) =    ` 12,12,000

Combined New Share of the Old Partners = (12/25 + 8/25) = 20/25

Total Capital of the firm

=

(Adjusted Capital of the Old Partners × Reciprocal of Combined New Share of the Old Partners)

 

=

(12,12,000 × 25/20) =    ` 15,15,000

Vibhor’s Capital

=

Total Capital of the firm × His Profit share

 

=

   ` (15,15,000 × 1/5) =    ` 3,03,000


Balance Sheet

 

as at 31st March, 2018

 

Liabilities

`

Assets

`

 

Capitals:

 

Cash at Bank

5,27,000

 

  Abhir

7,59,000

 

(1,40,000 + 4,000 + 3,03,000 + 80,000)

 

 

  Divya

4,53,000

 

Debtors

6,50,000

 

 

  Vibhor

3,03,000

15,15,000

  Less: Provision for Bad Debts

50,00

6,00,000

 

Employee’s Provident Fund          

1,00,000

Stock

2,80,000

 

Creditors

2,20,000

Investments

4,40,000

 

Outstanding Salary

12,000

 

 

 

 

 

 

 

 

 

18,47,000

 

18,47,000

 

 

 

 

 

 

 

Question 65:


X and Y share profits in the ratio of 5 : 3. Their Balance Sheet as at 31st March, 2022 was:

Liabilities

`

Assets

`

Creditors

15,000

Cash at Bank

5,000

Employees' Provident Fund

10,000

Sundry Debtors

20,000

 

Workmen Compensation Reserve

5,800

 Less: Provision for Doubtful Debts

600

19,400

Capital A/cs:

 

Stock

 

25,000

  X

70,000

 

Fixed Assets

80,000

  Y

31,000

1,01,000

Profit and Loss A/c

2,400

 

 

 

 

 

 

1,31,800

 

1,31,800

 

 

 

 


They admit Z into partnership with 1/8th share in profits on 1st April, 2022. Z brings  
 ` 20,000 as his capital and    ` 12,000 for goodwill in cash. Z acquires his share from X. Following revaluations are also made:
(a) Employees' Provident Fund liability is to be increased by  
 ` 5,000.
(b) All Debtors are good.
(c) Stock includes  
 ` 3,000 for obsolete items.
(d) Creditors are to be paid  
 ` 1,000 more.
(e) Fixed Assets are to be revalued at  
 ` 70,000. 
Prepare Journal entries, necessary accounts and new Balance Sheet. Also, calculate new profit-sharing ratio.

Answer:

Revaluation Account

Dr.

 

Cr.

Particulars

`

Particulars

`

Stock

3,000

Provision for D. Debts

600

Creditors

1,000

 

 

Fixed Assets

10,000

Loss transferred to

 

Provident Fund

5,000

X Capital

11,500

 

 

Y Capital

6,900

 

19,000

 

19,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

X

Y

Z

Particulars

X

Y

Z

Revaluation (Loss)

11,500

6,900

 

Balance b/d

70,000

31,000

 

Profit and Loss

1,500

900

 

Workmen’s Comp.
Fund

3,625

2,175

 

Balance c/d

72,625

25,375

20,000

Cash

 

 

20,000

 

 

 

 

Premium for Goodwill

12,000

 

 

 

85,625

33,175

20,000

 

85,625

33,175

20,000

 

 

 

 

 

 

 

 

 

Balance Sheet

as on March 31, 2022 after Z’s admission

Particulars

`

Assets

`

Creditors (15,000 + 1,000)

16,000

Land and Building

5,000

Provident Fund (10,000 + 5,000)

15,000

Sundry Debtors

20,000

Capital A/cs:

 

Stock (25,000 – 3,000)

22,000

X

72,625

 

Fixed Assets (80,000 – 10,000)

70,000

Y

25,375

 

Cash

32,000

Z

20,000

1,18,000

 

 

 

1,49,000

 

1,49,000

 

 

 

 


Working Notes

WN1: Distribution of Revaluation Loss

X’s capital will be debited =18,400×5/8=11,500

Y’s capital will be debited =18,400×3/8=6,900


WN2: Distribution Accumulated Loss


X’s capital will be debited =2,400×5/8=1,500

Y’s capital will be Credited =2,400×3/8=900



WN3: Distribution of Workmen’s Compensation Fund

X’s capital will be credited =5,800×5/8=3,625

Y’s capital will be Credited =5,800×3/8=2,175


WN4: Z’s premium for goodwill will be transferred to X’s Capital Account because Z receives his entire share from X.

WN5: Calculation of New Profit Sharing Ratio

 

Z acquired 1/8th share from X

New share of X=5/8-1/8=4/8

New share of Y=3/8

New share of Z=1/8

New profit sharing ratio= 4;3:1

Ts Grewal Solution 2022-2023

Click below for more Questions

Class 12 / Volume – I

Chapter 1 – Admission of a Partner

 

Question No. 1 To 5
Question No. 5 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
Question No. 36 To 40
Question No. 41 To 45
Question No. 46 To 50
Question No. 51 To 55

Question No. 56 To 60

Question No. 61 To 65
Question No. 66 To 70
Question No. 71 To 75

Question No. 76 To 80
Question No. 81 To 83
Question No. 84 To 86

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12th TS Grewal’s Accountancy Solutions

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