12th | Admission of a partner  | Question No. 76 To 78 | Ts Grewal Solution 2024-2025

Question 76:

Leena and Rohit are partners in a firm sharing profits in the ratio of 3: 2. On 31st March, 2018, their Balance Sheet was as follows:

BALANCE SHEET OF LEENA AND ROHIT as at 31st March, 2018
Liabilities		`	Assets		`
Sundry Creditors Bills Payable General Reserve Capitals:		80,000 38,000 50,000	Cash		42,000
			Debtors Less: Provision for Doubtful Debts	1,32,000 2,000	1,30,000
			Stock Plant and Machinery		1,46,000 1,50,000
Leena Rohit	1,60,000 1,40,000	3,00,000
		4,68,000			4,68,000

On the above date Manoj was admitted as a new partner for 1/5th share in the profits of the firm on the following terms:

(i) Manoj brought proportionate capital. He also brought his share of goodwill premium of ` 80,000 in cash.

(ii) 10% of the general reserve was to be transferred to provision for doubtful debts.

(iii) Claim on account of workmen's compensation amounted to `40,000.

(iv) Stock was overvalued by `16,000.

(v)Leena, Rohit and Manoj will share future profits in the ratio of 5:3:2.

Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm. (CBSE 2019)

 

Answer:

Revaluation Account
Dr.			Cr.
Particulars	`	Particulars	`
To workers’ compensation Liabilities To Stock	40,000 16,000	By loss transferred to ; Rohit×3/5=33,600 Leena×2/5=22,400	56,000
	56,000		56,000

 

Partners’ Capital Accounts
Dr.							Cr.
Particulars	Leena	Rohit	Manoj	Particulars	Leena	Rohit	Manoj
To Revaluation A/c	32,600	22,400		By Balance b/d	160,000	140,000
To Balance c/d	1,93,400	1,75,600	92,250	By Premium A/c	40,000	40,000
				By General reserve A/c By Cash A/c	27,000	18,000	92,250
	2,27,000	1,98,000	92,250		2,27,000	1,98,000	92,250

 

Balance Sheet as on March 31, 2018 after Leander’s admission
Liabilities		`	Assets		`
Creditors Bills payables Workers’ compensation liabilities		80,000 38,000 40,000	Cash (42,000+80,000+92,250) Debtors Less; prov. For doubtful debts	1,32,000 7,000	2,14,250     1,25,000
Capital A/c; Leena  1,93,400 Rohit   1,75,600 Manoj     92,250		4,61,250	Stock Plant and machinery		1,30,000 1,50,000
		6,19,250			6,19,250

Working Notes;

WN 1:                                     
Calculation of old ratio and sacrificing ratio

	Leena	Rohit	Manoj
OLD RATION	3  :	2
NEW RATIO	5 :	3  :	2

Sacrificing ratio= Old ratio – New Ratio

Leena =3/5-5/10=6-5/10=1/10

Rohit =2/5-3/10=4-3/10=1/10

Sacrificing ratio of Leena : Rohit=1:1

WN 2:

Calculation of Manoj’s capital

Capital of Leena and Rohit = 1,93,400+1,75,600=3,69,000

Share of Leena and Rohit = 8/10

Hence Capital of Leena ,Rohit and Manoj=3,69,000×10/8=4,61,250

Accordingly capital of Manoj=4,61,250-3,69,000=92,250

 

Question 77:

On 31st March, 2024 the Balance Sheet of Ram and Shyam who share profits and losses in the ratio of 3:2 was as follows:

BALANCE SHEET OF RAM AND SHYAM as at 31st March, 2024
Liabilities		`	Assets		`
Creditors General Reserve Employees' Provident Fund		70,000 25,000 55,000	Cash at Bank		25,000   1,50,000   82,500 142,500
			Debtors Less: Provision for Doubtful debts	1,62,500 12,500
			Stock Machinery
Capitals: Ram Shyam	1,50,000 1,00,000	2,50,000
		4,00,000			4,00,000

They decided to admit Mahesh on 1st April, 2024 for 1/5th share which Mahesh acquired wholly from Shyam on the following terms:

(i) Mahesh shall bring `25,000 as his share of premium for Goodwill.

(ii) A debtor whose dues of `7,500 were written off as bad debt paid `5,000 in settlement.

(iii) A claim of `12,500 on account of workmen's compensation was to be provided for.

(iv) Machinery were undervalued by `5,000. Stock was valued 10% more than its market value.

(v) Mahesh was to bring in capital equal to 20% of the combined capitals of Ram and Shyam after all adjustments.

Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the new firm.

 

Answer:

Revaluation Account
Dr.
Particulars		`			Particulars	`
To Worker compensation liabilities		12,500			By Bad debts Recovered	5,000
To Stock (82,500×10/110)		7,500			By Machinery	5,000
					By Loss transferred to-
					Ram=10,000×3/5=6,000
					Shyam=10,000×2/5=4,000 (In old Ratio: 3:2)	10,000
		20,000				20,000

                    

Partners’ Capital Accounts
Dr.									Cr.
Particulars		Ram	Shyam	Mahesh	Particulars	Ram	Shyam	Mahesh
To Revaluation A/c		6,000	4,000		By Balance b/d	1,50,000	1,00,000
					By Premium A/c		25,000
To Balance c/d		1,59,000	1,31,000		By General Reserve	15,000	10,000
		1,65,000	1,35,000			1,65,000	1,35,000
To Balance c/d		1,59,000	1,31,000	58,000	Balance b/d	1,59,000	1,31,000
					Bank A/c			58,000
		1,59,000	1,31,000	58,000		1,59,000	1,31,000	58,000

  

Balance Sheet as on 1st April, 2024
Liabilities		`	Assets		`
Workmen Compensation Reserve		12,500	Bank A/c		1,13,000
Employees Provident Fund		5,500	(25,000+25,000+58,000+5,000)
Creditors		70,000	machinery		1,47,500
Capital			Stock		75,000
Ram	1,59,000
Shyam	1,31,000		Debtors	1,62,500
Mahesh	58,000	3,48,000	Less : Provision for Doubtful Debts	12,500	1,50,000
		4,85,500			4,85,500

 

Working notes;

WN-1

Calculation of Old and sacrificing ratio

Old ratio of Ram and shyam= 3:2

New ratio of ;

Ram=3/5

Shyam=2/5-1/5=2-1/5=1/5

Mahesh= 1/5

New ratio of Ram, shyam and Mahesh=3:1:1

 

Sacrificing ratio of –

Ram =3/5-3/5=3-3/5=0/5

Shyam=2/5-1/5=2-1/5=1/5

Sacrificing ratio of Ram and Shyam = 0:1

 

WN-2

Adjusted Capital of Ram and shyam= 1,59,000+1,31,000=2,90,000

Mahesh’s capital= 2,90,000×20/100=58,000

 

Question 78:

Aan and Shaan were partners sharing profits in the ratio of 3: 2. Their Balance Sheet as at 31st March, 2024 was as under:

Liabilities	`	Assets	`
Creditors	2,00,000	Cash	148,000
Employees' Provident Fund	30,000	Debtors  2,05,000
Bank Overdraft	1,70,000	Less: Provision for Doubtful Debts 3,000	2,02,000
Reserve	1,50,000	Stock	2,00,000
Capital A/cs:		Plant and Machinery	6,00,000
Aan's 7,00,000		Building	7,00,000
Shaan's 6,00,000	13,00,000
	18,50,000		18,50,000

They agreed to admit Mohan for 1/4th share on the above date subject to the following terms:

(i) Mohan to bring in capital equal to 1/4th of the total capital of Aan and Shaan after all adjustments including premium for goodwill.

(ii) Building to be appreciated by 20% and stock to be depreciated to 70%.

(iii) Provision for Doubtful Debts on Debtors to be raised to ` 10,000.

(iv) A provision be made for ` 18,000 for outstanding legal charges.

(v) Mohan's share of goodwill premium was calculated as ` 1,00,000.

Prepare the Revaluation Account, Partners Capital Accounts and the Balance Sheet of the new firm.

 

Answer:

 

Revaluation Account
Particulars	`	Particulars	`
Stock	60,000	Building	1,40,000
Provision for Doubtful Debts	7,000
Legal Charges	18,000
Gain	55,000
	1,40,000		1,40,000

 

Capital account
Particulars	Amit	Anil	Ankit	Particulars	Amit	Anil	Ankit
To Balance c/d	8,83,000	7,22,000	4,01,250	By Balance B/d	7,00,000	6,00,000	-
				By Cash A/c			4,01,250
				By Premium A/c	60,000	40,000
				By Revaluation A/c	33,000	22,000
				By Reserve A/c	90,000	60,000
	8,83,000	7,22,000	4,01,250		8,83,000	7,22,000	4,01,250

 

	BALANCE SHEET as at 31st March, 2024
Liabilities		`	Assets		`
Creditors		2,00,000	Cash		6,49,250
Bank Overdraft		1,70,000
Employees' Provident Fund		30,000	Debtors	2,05,000
O/s Legal charges		18,000	Less: Provision for Doubtful Debts	10,000	1,95,000
Capital A/cs:			Stock		1,40,000
Aan - 8,83,000			Plant and Machinery		6,00,000
Shaan - 7,22,000			Building		8,40,000
Mohan - 4,01,250		20,06,250
		24,24,250			24,24,250