Question 26: A, B and C
were partners in a firm sharing profits in the ratio of 3 :
2 : 1. Their Balance Sheet as on 31st March, 2015 was as follows:
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|
|
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|
Liabilities |
(
`) |
Assets |
(
`) |
|
|
Creditors |
50,000 |
Land |
50,000 |
|
|
Bills
Payable |
20,000 |
Building |
50,000 |
|
|
General
Reserve |
30,000 |
Plant |
1,00,000 |
|
|
Capital
A/cs: |
|
Stock |
40,000 |
|
|
A |
1,00,000 |
|
Debtors |
30,000 |
|
B |
50,000 |
|
Bank |
5,000 |
|
C |
25,000 |
1,75,000 |
|
|
|
|
2,75,000 |
|
2,75,000 |
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|
|
|
|
From 1st April, 2015, A, B
and C decided to share profits equally. For this it was agreed that:
(i) Goodwill of the firm will be valued at ` 1,50,000.
(ii) Land will be revalued at `
80,000 and building be depreciated by 6%.
(iii) Creditors of
`
6,000 were not likely to be claimed and hence should be written off.
Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of
the reconstituted firm.
Answer:
|
Revaluation
Account |
||||
|
Dr. |
Cr. |
|||
|
Particulars |
( `) |
Particulars |
( `) |
|
|
Building A/c |
3,000 |
Land A/c |
30,000 |
|
|
Revaluation Profit |
|
Creditors A/c |
6,000 |
|
|
A |
16,500 |
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|
|
|
B |
11,000 |
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|
C |
5,500 |
33,000 |
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|
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|
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|
36,000 |
|
36,000 |
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|
Partners’
Capital Account |
|||||||
|
Dr. |
Cr. |
||||||
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
A’s Capital A/c |
- |
- |
25,000 |
Balance b/d |
1,00,000 |
50,000 |
25,000 |
|
Balance c/d |
1,56,500 |
71,000 |
10,500 |
R/v Profit |
16,500 |
11,000 |
5,500 |
|
|
|
|
|
General Reserve |
15,000 |
10,000 |
5,000 |
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|
|
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|
C’s Capital A/c |
25,000 |
- |
- |
|
|
1,56,500 |
71,000 |
35,500 |
|
1,56,500 |
71,000 |
35,500 |
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|
Balance
Sheet as
on March 31, 2015 |
|||||
|
Liabilities |
( `) |
Assets |
( `) |
||
|
Capital A/c |
|
Land |
50,000 |
|
|
|
A |
1,56,500 |
|
Add: Increase |
30,000 |
80,000 |
|
B |
71,000 |
|
Building |
50,000 |
|
|
C |
10,500 |
2,38,000 |
Less: Dep. |
3,000 |
47,000 |
|
|
|
Plant |
1,00,000 |
||
|
Creditors |
50,000 |
|
Bank |
5,000 |
|
|
Less: Written-off |
6,000 |
44,000 |
Stock |
40,000 |
|
|
Bills Payable |
20,000 |
Debtors |
30,000 |
||
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|
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|
||
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|
3,02,000 |
|
3,02,000 |
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Working Notes
A's share=3/6−1/3 = 1/6 (Sacrifice)
B's share=2/6−1/3 = Nil
C's share=1/6−1/3 = -1/6 (Gain)
C will compensate by passing an entry
|
C’s capital a/c To A’s capital a/c |
Dr. |
25,000 |
25,000 |
Question 27:
Balance Sheet of X and Y, who share profits and losses as 5 : 3, as at 1st April, 2023 is:
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|||
|
Liabilities |
(
`) |
Assets |
(
`) |
|
X's Capital |
52,000 |
Goodwill |
8,000 |
|
Y's Capital |
54,000 |
Machinery |
38,000 |
|
General
Reserve |
4,800 |
Furniture |
15,000 |
|
Sundry
Creditors |
5,000 |
Sundry
Debtors |
33,000 |
|
Employees'
Provident Fund |
1,000 |
Stock |
7,000 |
|
Workmen
Compensation Reserve |
10,000 |
Bank |
25,000 |
|
|
|
Advertisement
Suspense A/c |
800 |
|
|
|
|
|
|
|
1,26,800 |
|
1,26,800 |
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|
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|
On the above date, they decided to change their profit-sharing ratio to 3 : 5 and agreed upon the following:
(a) Goodwill be valued on the basis of two years' purchase of the average
profit of the last three years. Profits for the years ended 31st March, are: 2021
− `
7,500; 2022 − ` 4,000; 2023 − ` 6,500.
(b) Machinery and Stock be revalued at `
45,000 and ` 8,000 respectively.
(c) Claim on account of workmen compensation is `
6,000.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet
of the new firm.
Answer:
|
Revaluation
Account |
||||
|
Dr. |
Cr. |
|||
|
Particulars |
(
`) |
Particulars |
(
`) |
|
|
Profit transferred to: |
|
Machinery |
7,000 |
|
|
X’s Capital A/c |
5,000 |
|
Stock |
1,000 |
|
Y’s Capital A/c |
3,000 |
8,000 |
|
|
|
|
8,000 |
|
8,000 |
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|
|
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|
||||
|
Partners’
Capital Account |
|||||
|
Dr. |
Cr. |
||||
|
Particulars |
X |
Y |
Particulars |
X |
Y |
|
Advertisement Suspense A/c |
500 |
300 |
Balance b/d |
52,000 |
54,000 |
|
Goodwill A/c |
5,000 |
3,000 |
General Reserve A/c |
3,000 |
1,800 |
|
X’s Capital |
– |
3,000 |
WCF |
2,500 |
1,500 |
|
(Adjustment of Goodwill) |
|
|
Revaluation A/c (Profit) |
5,000 |
3,000 |
|
|
|
|
Y’s Capital A/c |
3,000 |
– |
|
Balance c/d |
60,000 |
54,000 |
(Adjustment of Goodwill) |
|
|
|
|
|
|
|
|
|
|
|
65,500 |
60,300 |
|
65,500 |
60,300 |
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Balance
Sheet |
|||
|
as
on April 01, 2024 (after Change in Profit Sharing Ratio) |
|||
|
Liabilities |
(
`) |
Assets |
(
`) |
|
X’s Capital |
58,500 |
Machinery (38,000 + 7,000) |
45,000 |
|
Z’s Capital |
55,500 |
Furniture |
15,000 |
|
Sundry Creditors |
5,000 |
Sundry Debtors |
33,000 |
|
Employees’ Provident Fund |
1,000 |
Stock (7,000 + 1,000) |
8,000 |
|
Workmen’s Compensation Reserve |
6,000 |
Bank |
25,000 |
|
|
1,26,000 |
|
1,26,000 |
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|
|
|
|
Working Notes:
WN 1 Calculation of Sacrificing (or Gaining) Ratio
Old Ratio (X and Y) = 5 : 3
New Ratio (X and Y) = 3 : 5
Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio
X's share=5/8−3/8=2/8 (Sacrifice)
Y's share=3/8−5/8=−2/8 (Gain)
WN 2 Calculation of New Goodwill
Goodwill = Average Profit × Number of Year′s Purchase = 6,000 × 2 = ` 12,000
Average profit= 7,500+4,000+6,500/3=6,000
∴Goodwill = 6,000 × 2 = ` 12,000
WN 3 Adjustment of Goodwill
Amount to be debited to X’s capital=12,000×2/8 =3,000
Amount to be debited to Y’s capital=12,000×2/8 =3,000
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (
`) |
Credit (
`) |
|
|
|
Workmen’s Compensation Reserve
A/c |
Dr. |
|
10,000 |
|
|
|
To Workmen’s Compensation Claim A/c |
|
|
6,000 |
|
|
|
To X’s Capital A/c |
|
|
2,500 |
|
|
|
To Y’s Capital A/c |
|
|
1,500 |
|
|
|
(Being Workmen’s compensation
claim distributed among partners in their old ratio i.e. 5 : 3) |
|
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|
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X’s Capital A/c |
Dr. |
|
5,000 |
|
|
|
Y’s Capital A/c |
Dr. |
|
3,000 |
|
|
|
To Goodwill A/c |
|
|
8,000 |
|
|
|
(Being Goodwill written off among
partners in their old ratio) |
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|
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|
|
|
|
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|
X’s Capital A/c |
Dr. |
|
500 |
|
|
|
Y’s Capital A/c |
Dr. |
|
300 |
|
|
|
To Advertisement Suspense A/c |
|
|
800 |
|
|
|
(Being Advertisement Suspense
written off among partners in their old ratio) |
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|
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|
General Reserve A/c |
Dr. |
|
4,800 |
|
|
|
To X’s Capital A/c |
|
|
3,000 |
|
|
|
To Y’s Capital A/c |
|
|
1,800 |
|
|
|
(Being General Reserve
distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
|
|
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|
Revaluation A/c |
Dr. |
|
8,000 |
|
|
|
To X’s Capital A/c |
|
|
5,000 |
|
|
|
To Y’s Capital A/c |
|
|
3,000 |
|
|
|
(Being Revaluation profit
distributed among partners in their old ratio) |
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|
|
|
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|
|
|
|
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|
Y’s Capital A/c |
Dr. |
|
3,000 |
|
|
|
To X’s Capital A/c |
|
|
3,000 |
|
|
|
(Being Adjustment of goodwill
made) |
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Question 28:
Ram, Mohan, Sohan and Hari were partners in a firm sharing profits in the ratio of 4 : 3 : 2 : 1. On 1st April, 2016, their Balance Sheet was as follows:
|
BALANCE SHEET OF RAM,
MOHAN, SOHAN AND HARI as on 1st April, 2016 |
||||
|
Liabilities |
` |
Assets |
` |
|
|
Capital
A/cs: |
|
Fixed
Assets |
9,00,000 |
|
|
Ram |
4,00,000 |
|
Current
Assets |
5,20,000 |
|
Mohan |
4,50,000 |
|
|
|
|
Sohan |
2,50,000 |
|
|
|
|
Hari |
2,00,000 |
13,00,000 |
|
|
|
Workmen
Compensation Reserve |
|
1,20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
14,20,000 |
|
14,20,000 |
|
|
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|
|
|
From the above date, the partners decided to share the future profits in the
ratio of 1 : 2 : 3 : 4. For this purpose the goodwill
of the firm was valued at
`1,80,000.
The partners also agreed for the following:
(a)
The Claim for workmen compensation has been estimated at `
1,50,000.
(b) Adjust the capitals of the partners according to the new profit-sharing
ratio by opening Partners' Current Accounts.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet
of the reconstituted firm.
Answer:
|
Revaluation Account |
||||
|
Dr. |
Cr. |
|||
|
Particulars |
( `) |
Particulars |
( `) |
|
|
Provision for Workmen Compensation Claim |
30,000 |
Revaluation Loss |
|
|
|
|
|
Ram’s Capital A/c |
12,000 |
|
|
|
|
Mohan’s Capital A/c |
9,000 |
|
|
|
|
Sohan’s Capital A/c |
6,000 |
|
|
|
|
Hari’s Capital A/c |
3,000 |
30,000 |
|
|
|
|
|
|
|
|
30,000 |
|
30,000 |
|
|
|
|
|
|
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|
Partners’ Capital Account |
|||||||||
|
Dr. |
Cr. |
||||||||
|
Particulars |
Ram |
Mohan |
Sohan |
Hari |
Particulars |
Ram |
Mohan |
Sohan |
Hari |
|
Revaluation A/c |
12,000 |
9,000 |
6,000 |
3,000 |
Balance b/d |
4,00,000 |
4,50,000 |
2,50,000 |
2,00,000 |
|
Ram’s Capital A/c |
|
|
13,500 |
40,500 |
Sohan’s Capital A/c |
13,500 |
4,500 |
|
|
|
Mohan’s Capital A/c |
|
|
4,500 |
13,500 |
Hari’s Capital A/c |
40,500 |
13,500 |
|
|
|
Current A/c’s |
3,15,000 |
2,05,000 |
|
|
Current A/c’s |
|
|
1,55,000 |
3,65,000 |
|
Balance c/d |
1,27,000 |
2,54,000 |
3,81,000 |
5,08,000 |
|
|
|
|
|
|
|
4,54,000 |
4,68,000 |
4,05,000 |
5,65,000 |
|
4,54,000 |
4,68,000 |
4,05,000 |
5,65,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
|
Liabilities |
( `) |
Assets |
( `) |
||
|
Capital A/c |
|
Fixed Assets |
9,00,000 |
||
|
Ram |
1,27,000 |
|
Current Assets |
5,20,000 |
|
|
Mohan |
2,54,000 |
|
Current A/c |
|
|
|
Sohan |
3,81,000 |
|
Ram |
3,15,000 |
|
|
Hari |
5,08,000 |
12,70,000 |
Mohan |
2,05,000 |
5,20,000 |
|
Current A/c |
|
|
|
||
|
Sohan |
1,55,000 |
|
|
|
|
|
Hari |
3,65,000 |
5,20,000 |
|
|
|
|
Claim against WCF |
1,50,000 |
|
|
||
|
|
|
|
|
||
|
|
19,40,000 |
|
19,40,000 |
||
|
|
|
|
|
||
Working Notes
WN1: Calculation
of Gaining/Sacrificing Ratio
Old Ratio 4:3:2:1
New Ratio 1:2:3:4
Sacrificing Ratio=Old Ratio-New Ratio
Sacrificing Ratio of Ram=4/10-1/10=3/10(sacrificing)
Sacrificing Ratio of Mohan=3/10-2/10=1/10(sacrificing)
Gaining Ratio of Sohan=2/10-3/10=-1/10(gaining)
Gaining Ratio of Hari=1/10-4/10=-3/10(gaining)
(a) Sohan will compensate Ram and Mohan in the ratio 3:1
(b) Hari will compensate Ram and Mohan in the ratio of 3:1
Adjustment for Goodwill
|
Sohan’s Capital A/c |
Dr. |
|
18,000 |
|
|
Hari’s Capital A/c |
Dr. |
|
54,000 |
|
|
To Ram’s Capital A/c |
|
|
|
54,000 |
|
To Mohan’s Capital A/c |
|
|
|
18,000 |
|
(Being Sohan and Hari will compensate Ram and Mohan in their gaining ratio) |
|
|
|
|
WN2: Calculation of Adjusted Capital
Ram = 4,54,000 – 12,000 = ` 4,42,000
Mohan = 4,68,000 – 9,000 = ` 4,59,000
Sohan = 2,50,000 – 24,000 = ` 2,26,000
Hari = 2,00,000 – 57,000 = ` 1,43,000
Total Combined Capital = 12,70,000
WN3:
Calculation of New Capital
Ram=12,70,000×1/10=1,27,000
Mohan=12,70,000×2/10=2,54,000
Sohan=12,70,000×3/10=3,81,000
Hari=12,70,000×4/10=5,08,000
Question 29:
Suresh, Ramesh, Mahesh and Ganesh were partners in a firm sharing profits in the ratio of 2 : 2 : 3 : 3. On 1st April, 2016, their Balance Sheet was as follows:
|
BALANCE SHEET OF SURESH,
RAMESH, MAHESH AND Ganesh as on 1st April, 2016 |
||||
|
Liabilities |
(
`) |
Assets |
(
`) |
|
|
Capital
A/cs: |
|
Fixed
Assets |
6,00,000 |
|
|
Suresh |
1,00,000 |
|
Current
Assets |
3,45,000 |
|
Ramesh |
1,50,000 |
|
|
|
|
Mahesh |
2,00,000 |
|
|
|
|
Ganesh |
2,50,000 |
7,00,000 |
|
|
|
Sundry
Creditors |
|
1,70,000 |
|
|
|
Workmen
Compensation Reserve |
|
75,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,45,000 |
|
9,45,000 |
|
|
|
|
|
|
From the above date, the partners decided to share the future profits
equally. For this purpose the goodwill of the firm was valued at ` 90,000. It was also
agreed that:
(a) Claim against Workmen Compensation Reserve will be estimated at `1,00,000 and fixed assets will be depreciated by 10%.
(b) The Capitals of the partners will be adjusted according to the new
profit-sharing ratio. For this, necessary cash will be brought or paid by the
partners as the case may be.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet
of the reconstituted firm.
Answer:
|
Revaluation Account |
||||
|
Dr. |
Cr. |
|||
|
Particulars |
( `) |
Particulars |
( `) |
|
|
Depreciation
on Fixed Assets A/c |
60,000 |
Revaluation
Loss |
|
|
|
Provision
for Claim against WCF |
25,000 |
Suresh’s
Capital A/c |
17,000 |
|
|
|
|
Ramesh’s
Capital A/c |
17,000 |
|
|
|
|
Mahesh’s
Capital A/c |
25,500 |
|
|
|
|
Ganesh’s
Capital A/c |
25,500 |
85,000 |
|
|
|
|
|
|
|
|
85,000 |
|
85,000 |
|
|
|
|
|
|
|
|
Partners’ Capital Account |
|||||||||
|
Dr. |
Cr. |
||||||||
|
Particulars |
Suresh |
Ramesh |
Mahesh |
Ganesh |
Particulars |
Suresh |
Ramesh |
Mahesh |
Ganesh |
|
Revaluation
A/c |
17,000 |
17,000 |
25,500 |
25,500 |
Balance
b/d |
1,00,000 |
1,50,000 |
2,00,000 |
2,50,000 |
|
Mahesh's
Capital A/c |
2,250 |
2,250 |
- |
- |
Suresh’s
Capital A/c |
- |
- |
2,250 |
2,250 |
|
Ganesh's
Capital A/c |
2,250 |
2,250 |
- |
- |
Ramesh’s
Capital A/c |
- |
- |
2,250 |
2,250 |
|
Cash
A/c |
- |
- |
25,250 |
75,250 |
Cash
A/c |
75,250 |
25,250 |
- |
- |
|
Balance
c/d |
1,53,750 |
1,53,750 |
1,53,750 |
1,53,750 |
|
|
|
|
|
|
|
1,75,250 |
1,75,250 |
2,04,500 |
2,54,500 |
|
1,75,250 |
1,75,250 |
2,04,500 |
2,54,500 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet |
||||
|
Liabilities |
( `) |
Assets |
( `) |
|
|
Capital
A/c |
|
Fixed
Assets (Less
depreciation) |
5,40,000 |
|
|
Suresh's Capital A/c |
1,53,750 |
|
Current
Assets |
3,45,000 |
|
Ramesh's Capital A/c |
1,53,750 |
|
|
|
|
Mahesh's Capital A/c |
1,53,750 |
|
|
|
|
Ganesh's Capital A/c |
1,53,750 |
6,15,000 |
|
|
|
Claim
against WCF |
1,00,000 |
|
|
|
|
Sundry
Creditors |
1,70,000 |
|
|
|
|
|
8,85,000 |
|
8,85,000 |
|
|
|
|
|
|
|
Working Notes
WN1:
Calculation of Gaining/Sacrificing Ratio
Adjustment for Goodwill
|
Suresh’s
Capital A/c |
Dr. |
|
4,500 |
|
|
Ramesh’s
Capital A/c |
Dr. |
|
4,500 |
|
|
To Mahesh’s Capital A/c |
|
|
|
4,500 |
|
To Ganesh’s Capital A/c |
|
|
|
4,500 |
|
(Gaining
partners compensate sacrificing partners) |
|
|
|
|
WN2: Calculation of Adjusted
Capital
Suresh = 1,00,000 – 21,500 = ` 78,500
Ramesh = 1,50,000 – 21,500 = ` 1,28,500
Mahesh = 2,04,500 – 25,500 = ` 1,79,000
Ganesh = 2,54,500 – 25,500 = ` 2,29,000
Total Combined Capital = 6,15,000
WN3: Calculation of New Capital
Suresh=6,15,000×1/4=1,53,750
Ramesh=6,15,000×1/4=1,53,750
Mahesh=6,15,000×1/4=1,53,750
Ganesh=6,15,000×1/4=1,53,750
Ts Grewal Solution 2024-2025
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Class 12 / Volume – I