Question
21:
Amar and Akhar are partners sharing profits in the ratio of 2 : 1. On 31st March, 2023, their Balance Sheet showed
General Reserve of
`
60,000. It was decided that in future they will share profits and losses in the
ratio of 3 : 2. Pass necessary Journal entry in each
of the following alternative cases:
(i) When General Reserve is not to be shown in the
new Balance Sheet.
(ii) When General Reserve is to be shown in the new Balance Sheet.
Answer:
(i) If they do not want to show General Reserve in the new
Balance Sheet
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
2023 |
|
|
|
|
|
|
|
To Amar’s
Capital A/c |
|
|
|
40,000 |
|
|
To Akhar’s
Capital A/c |
|
|
|
20,000 |
|
|
(Being Adjustment of balance in
General Reserve A/c in old ratio) |
|
|
|
|
Working Notes:
WN1 Calculation
of Share of General Reserve
Amar's share=60,000×2/3=40,000
Akhar's share=60,000×1/3=20,000
(ii) If
they want to show General Reserve in the new Balance Sheet
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
2023 |
|
|
|
|
|
|
|
To Amar’s
Capital A/c |
|
|
|
4,000 |
|
|
(Being Adjustment of balance in
General Reserve A/c in sacrificing/gaining ratio) |
|
|
|
|
Working
Notes:
WN1 Calculation
of Gain/Sacrfice
Sacrificing Ratio=Old Ratio-New Ratio
Amar=2/3-3/5=1/15(sacrifice)
Akhar=1/3-2/5=-1/15(gain)
WN2 Calculation
of Compensation by Akhar to Amar
Amount to be compensated=60,000×1/15=4,000
Question 22: Mita, Gopal
and Farhan were partners sharing profits and losses
in the ratio 3:2:1. On 31st March, 2018. they decided to change the profit-sharing ratio to 5: 3:2.
On this date, the Balance Sheet showed deferred advertisement expenditure `30,000 and contingency reserve 9,000.
Goodwill was valued at `4,80,000. Pass the necessary
Journal entries for the above transactions in the books of the firm on its
reconstitution.
(CBSE 2019)
Answer;
|
Journal |
||||
|
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
Mitha’s
Capital A/c Gopal’s
Capital A/c Farhan’s
Capital A/c
To Advertisement expenses a/c (Being
Advertisement
expenses A/c written off in old ratio) |
Dr. |
|
15,000 10,000 5,000 9,000 16,000 |
30,000 4,500 3,000 1,500 16,000 |
|
|
||||
|
Contingency reserve a/c |
Dr. |
|||
|
To Mitha’s
Capital A/c To Gopal’s
Capital A/c To Farhan’s Capital A/c (Being
Contingency
reserve A/c distributed in old ratio) |
|
|||
|
Farhan’s
Capital A/c To Gopal’s
Capital A/c (Being capital of gainer and sacrificer’s capital a/c adjusted with their share of
goodwill in gaining and sacrificing ratio) |
Dr. |
|||
WN-1
|
|
Mita
|
Gopal
|
Farhan
|
Old ratio
|
3
|
:
2
|
:
1
|
New ratio
|
5
|
:
3
|
:
2
|
Mita = 3/6-5/10=30-30/60=0/60
Gopal =2/6-3/10=20-18/60=2/60 (Scrifice)
Farhan=1/6-2/10=10-12/60=-2/60(Gain)
Goodwill of the firm=-4,80,000
Share of Gapal
=4,80,000×2/60=`16,000
Share of Farhan
=4,80,000×2/60=`16,000
WN-2
Adjustment of deferred advertisement expenditure and
contingency reserve
Advertisement
expenditure to be written off / debited (in old ratio 3;2;1)
Mita = 30,000×3/6 =15,000
Gopal = 30,000×2/6 =10,000
Farhan = 30,000×1/6 = 5,000
Contingency
reserve to be Credited (in old ratio 3;2;1)
Mita = 9,000×3/6 =4,500
Gopal = 9,000×2/6 =3,000
Farhan = 9,000×1/6 = 1,500
Question 23:
X Y and Z are
sharing profits and losses in the ratio of 5 :3:2.
They decide to share future profits and losses in the ratio of 2:3:5 with
effect from 1st April, 2023. They also decide to record the effect of the
following accumulated profits, losses and reserves without affecting their book
values by passing a single entry.
|
|
Book
Values (Rs.) |
|
General Reserve |
6,000 |
|
Profit & Loss A/c (Credit) |
24,000 |
|
Advertisement Suspense A/c |
12,000 |
Pass an Adjustment Entry.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
April
1 |
Z’s Capital A/c |
Dr. |
|
5,400 |
|
|
|
To X's Capital A/c |
|
|
|
5,400 |
|
|
(Being
accumulated profits, losses and reserves without affecting) |
|
|
|
|
Question
24:
Bhavya and Sakshi are partners in
a firm, sharing profits and losses in the ratio of 3 :
2. On 31st March, 2018 their Balance Sheet was as under:
|
BALANCE
SHEET OF BHAVYA AND SAKSHI |
||||
|
Liabilities |
(`) |
Assets |
(`) |
|
|
Sundry Creditors |
|
13,800 |
Furniture |
16,000 |
|
General Reserve |
|
23,400 |
Land and Building |
56,000 |
|
Investment Fluctuation Fund |
|
20,000 |
Investments |
30,000 |
|
Bhavya's Capital |
|
50,000 |
Trade Receivables |
18,500 |
|
Sakshi's Capital |
40,000 |
Cash in Hand |
26,700 |
|
|
|
1,47,200 |
|
1,47,200
|
|
|
|
|
|
|
|
The partners have decided to change their
profit sharing ratio to 1 : 1 with immediate
effect. For the purpose, they decided that:
(i) Investments to be valued at ` 20,000.
(ii) Goodwill of the firm be valued at `
24,000.
(iii) General Reserve not to be distributed between the
partners.
You are required to pass necessary Journal entries in the books of the firm.
Show workings.
Answer:
|
In the books of Bhavya and
Sakshi Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
2018 |
|
|
|
|
|
|
March 31 |
Investment Fluctuation Fund A/c |
Dr. |
|
20,000 |
|
|
|
To Investments A/c |
|
|
|
10,000 |
|
|
To Bhavya’s Capital A/c |
|
|
|
6,000 |
|
|
To Sakshi’s Capital A/c |
|
|
|
4,000 |
|
|
(Being depreciation in the value of investment provided
for and excess amount distributed) |
|
|
|
|
|
|
|
|
|
|
|
|
March 31 |
Sakshi’s Capital
A/c (24,000×1/10) |
Dr. |
|
2,400 |
|
|
|
To Bhavya’s Capital A/c
(24,000×1/10) |
|
|
|
2,400 |
|
|
(Being adjustment for goodwill due to change in
profit-sharing ratio) |
|
|
|
|
|
|
|
|
|
|
|
|
March 31 |
Sakshi’s Capital
A/c (23,400×1/10) |
Dr. |
|
2,340 |
|
|
|
To Bhavya’s Capital A/c
(23,400×1/10) |
|
|
|
2,340 |
|
|
(Being adjustment for general reserve not distributed) |
|
|
|
|
Working Notes:
|
Particulars |
Bhavya |
Sakshi |
|
Old Ratio |
3/5 |
2/5 |
|
New Ratio |
1/2 |
1/2 |
|
Gain/Sacrifice |
(3/5 – 1/2)= 1/10 (Sacrifice) |
(2/5 – 1/2)= (-1/10) (Gain) |
Question
25:
Ashish, Aakash and Amit are partners sharing profits and losses equally. The
Balance Sheet as at 31st March, 2023 was as follows:
|
|
||||
|
Liabilities |
(`) |
Assets |
(`) |
|
|
Sundry Creditors |
1,35,000 |
Cash in Hand |
84,000 |
|
|
General Reserve |
90,000 |
Cash at Bank |
1,40,000 |
|
|
Capital A/cs: |
|
Sundry Debtors |
80,000 |
|
|
Ashish |
3,00,000 |
|
Stock |
1,40,000 |
|
Aakash |
3,00,000 |
|
Land and Building |
4,00,000 |
|
Amit |
2,75,000 |
8,75,000 |
Machinery |
2,50,000 |
|
|
|
|
Advertisement Suspense |
6,000 |
|
|
|
|
|
|
|
|
|
11,00,000 |
|
11,00,000 |
|
|
|
|
|
|
The partners decided to share profits in
the ratio of 2 : 2 : 1 w.e.f.
1st April, 2023. They also decided that:
(i) Value of stock to be reduced to ` 1,25,000.
(ii) Value of machinery to be decreased by 10%.
(iii) Land and Building to be appreciated by ` 62,000.
(iv) Provision for Doubtful Debts to be made @ 5% on
Sundry Debtors.
(v) Aakash was to carry out reconstitution of the
firm at a remuneration of
`
10,000.
Pass necessary Journal entries to give effect to the above.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
2023 |
|
|
|
|
|
|
April
1 |
General
Reserve A/c |
Dr. |
|
90,000 |
|
|
|
To Ashish’s Capital A/c |
|
|
|
30,000 |
|
|
To Akash’s Capital A/c |
|
|
|
30,000 |
|
|
To Amit’s Capital A/c |
|
|
|
30,000 |
|
|
(Being
Reserve distributed) |
|
|
|
|
|
|
|
|
|
|
|
|
April 1 |
Ashish’s Capital A/c |
Dr. |
|
2,000 |
|
|
|
Akash’s Capital A/c |
Dr. |
|
2,000 |
|
|
|
Amit’s Capital A/c |
Dr. |
|
2,000 |
|
|
|
To Advertisement Suspense A/c |
|
|
|
6,000 |
|
|
(Being
Advertisement Suspense distributed) |
|
|
|
|
|
|
|
|
|
|
|
|
April 1 |
Revaluation
A/c |
Dr. |
|
54,000 |
|
|
|
To Stock A/c |
|
|
|
15,000 |
|
|
To Machinery A/c |
|
|
|
25,000 |
|
|
To Provision for Doubtful Debts A/c |
|
|
|
4,000 |
|
|
To Akash’s Capital A/c (Remuneration) |
|
|
|
10,000 |
|
|
(Being
Assets revalued) |
|
|
|
|
|
|
|
|
|
|
|
|
April 1 |
Land
& Building A/c |
Dr. |
|
62,000 |
|
|
|
To Revaluation A/c |
|
|
|
62,000 |
|
|
(Being
Assets revalued) |
|
|
|
|
|
|
|
|
|
|
|
|
April 1 |
Revaluation
A/c |
Dr. |
|
8,000 |
|
|
|
To Ashish’s Capital A/c |
|
|
|
2,666 |
|
|
To Akash’s Capital A/c |
|
|
|
2,666 |
|
|
To Amit’s Capital A/c |
|
|
|
2,667 |
|
|
(Being
Profit made) |
|
|
|
|
|
|
|
|
|
|
|
Ts Grewal Solution 2023-2024
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Class 12 / Volume – I