12th | Admission of a partner  | Question No. 71 To 75 | Ts Grewal Solution 2024-2025

Question 71: Gautam and Yashica are partners in a firm, sharing profits and losses in 3: 1 respectively. The Balance Sheet of the firm as on 31st March, 2018 was as follows:

BALANCE SHEET as at 31st March, 2018
Liabilities		`	Assets	`
Sundry Creditors Bills Payable		50,000 30,000     5,00,000	Furniture Stock Debtors Cash in Hand Machinery	60,000 1,40,000 80,000 90,000 2,10,000
Capitals: Gautamn Yashica	4,00,000 1,00,000
		5,80,000		5,80,000

Asma is admitted as a partner for 3/8th share in the profits with a capital of  `2,10,000 and `50,000 for

her share of goodwill. It was decided that:

(i) New profit-sharing ratio will be 3:2:3.

(ii) Machinery will depreciated by 10% and Furniture by `5,000.

(iii) Stock was revalued at `2,10,000.

(iv) Provision for doubtful debts is to be created at 10% of debtors.

(v) The capitals of all the partners were to be in the new profit-sharing ratio on basis of capital of new partner. Any adjustment to be done through Current Accounts.

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

(CBSE Sample Paper 2019)

 

Answer:

Revaluation Account
				Cr.
Particulars	`		Particulars	`
To  plant and machinery A/c  To Furniture A/c  To Provision for doubtful debts	21,000		By Stock A/c	70,000
	5,000
	8,000
To profit Gautam’s capital A/c 36,000×3/4=27,000 Yashika’s Capital A/c 36,000×1/4=9,000	36,000
	70,000			70,000

hjhjh

Partners’ Capital A/c
Particulars	Gautam	Yashika	Asma	Particulars	Gautam	Yashika	Asma
To Balance C/d	4,77,000	1,09,000	2,10,000	By Balance b/d By Cash By Premium A/c By Revaluation A/c	4,00,000   50,000 27,000	1,00,000     9,000	2,10,000
	4,77,000	1,09,000	2,10,000		4,77,000	1,09,000	2,10,000
To G’s Current A/c	2,67,000			By Balance b/d	4,77,000	1,09,000	2,10,000
To Balance C/d	2,10,000	1,40,000	2,10,000	By Y’s Current A/c		31,000
	4,77,000	1,40,000	2,10,000		4,77,000	1,40,000	2,10,000

hjhjh

Balance sheet as at 1sh April 2018
Liabilities	`	Assets	`
Sundry creditors bills payable Capital A/c Gautam =2,10,000 Yashika =1,40,000 Ashma=2,10,000 Gautam’s current A/c	50,000 30,000       5,60,000 2,67,000	Furniture Stock Debtors                        80,000 Less: Prov. For D.D.      8,000 Cash Machinery Yashika’s Current A/c	55,000 2,10,000   72,000 3,50,000 1,89,000 31,000
	9,07,000		9,07,000

 

 Working notes;

WN-1

Calculation of old ratio and sacrificing ratio

Old ratio Gautam : Yashika = 3:1

New ratio Gautam : Yashika : Asma= 3:2:3

Sacrificing ratio= Old ratio – New Ratio

Gautam =3/4-3/8=6-3/8=3/8

 Yashika=1/4-2/8=2-2/8=0/8

Therefore sacrificing ratio of Gautam : Yashika = 3:0

WN-2

Calculation of Capital

Total Capital of the new firm on the basis of new partner

Total capital new firm = 2,10,000×8/3=5,60,000

New capital of all partners

Gautam=5,60,000×3/8=2,10,000

Yashika=5,60,000×2/8=1,40,000

Asma=5,60,000×3/8=2,10,000

 

Question 72:

 Kalpana and Kanika were partners in a firm sharing profits in 3 : 1 ratio. They admitted Karuna as a partner for 1/4th share in the future profits. Karuna was to bring    ` 60,000 for his capital. The Balance Sheet of Kalpana and Kanika as at 1st April, 2024, the date on which Karuna was admitted, was:

Liabilities		`	Assets		`
Capital A/cs:			Land and Building		40,000
Kalpana	50,000		Plant ad Machinery		70,000
Kanika	80,000	1,30,000	Stock		30,000
General Reserve		10,000	Debtors	35,000
Creditors		70,000	Less: Provision for Doubtful Debts	1,000	34,000
			Investments		26,000
			Cash		10,000
		2,10,000			2,10,000

The other terms agreed upon were:
(a) Goodwill of the firm was valued at    ` 24,000.
(b) Land and Building were valued at    ` 65,000 and Plant and Machinery at    ` 60,000.
(c) Provision for Doubtful Debts was found in excess by    ` 400.
(d) A liability of    ` 1,200 included in Sundry Creditors was not likely to arise.
(e) The capitals of the partners be adjusted on the basis of C's contribution of capital to the firm.
(f) Excess of shortfall, if any, be transferred to Current Accounts.
Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the new firm.

Answer:

Revaluation Account
Dr.			Cr.
Particulars	`	Particulars	`
Plant and Machinery (70,000 – 60,000)	10,000	Land and Building (65,000 – 40,000)	25,000
Profit transferred to		Provision for Doubtful Debts	400
Kalpana’s Capital  12,450		Creditors	1,200
Kanika’s Capital 4,150	16,600
	26,600		26,600

 

Partners’ Capital Accounts
Dr.							Cr.
Particulars	Kalpana	Kanika	Karuna	Particulars	Kalpana	Kanika	Karuna
				Balance b/d	50,000	80,000
				General Reserve	7,500	2,500
				Revaluation (Profit)	12,450	4,150
				Cash			60,000
Balance c/d	74,450	88,150	60,000	Karuna 's Current A/c	4,500	1,500
	74,450	88,150	60,000		74,450	88,150	60,000
Kanika’s Current A/c		43,150		Balance b/d	74,450	88,150	60,000
Balance c/d (Adjusted)	1,35,000	45,000	60,000	Kalpna’s Current A/c	60,550
	1,35,000	88,150	60,000		1,35,000	88,150	60,000

 

Balance Sheet as on April 01, 2024 after Karuna’s admission
Liabilities		`	Assets		`
Creditors (70,000 – 1,200)		68,800	Land and Building		65,000
Capital A/cs:			Plant and Machinery		60,000
Kalpana	1,35,000		Stock		30,000
Kanika	45,000		Debtors	35,000
Karuna	60,000	2,40,000	Less: Prov. for Doubtful Debts	600	34,400
Kanika’s Current A/c		43,150	Investments		26,000
			Cash		70,000
			Kalpana’s Current A/c		60,550
			Karuna 's Current A/c		6,000
		3,51,950			3,51,950

Working Notes:

WN1

	Kalpana	Kanika
OLD RATION	3  :	1
SACRIFICING RATIO	3  :	1

WN2 
Karuna ‘s of goodwill=24,000×1/4=6,000

Kalpana will get =6,000×3/4=4,500

Kanika will get =6,000×1/4=1,500

As Karuna has not brought his share of goodwill in cash, hence, his share shall be debited to his current account.

WN3 Distribution of Revaluation Profit
Kalpana will get =16,600×3/4=12,450

Kanika will get =16,600×1/4=4,150

WN4 Adjustment of Capital
 

Total Capital of the firm after Karuna’s admission	=	60,000 × 4	=	2,40,000
Less: Karuna’s Capital			=	60,000
Combined Capital of Kalpana and Kanika			=	1, 80,000

Kalpana’s proportion of capital=1,80,000×3/4=1,35,000

Kanika’s proportion of capital =1,80,000×1/4=45,000

WN5

Cash Account
Dr.			Cr.
Particulars	`	Particulars	`
Balance b/d	10,000	Balance c/d	70,000
Karuna’s Capital	60,000	(Balancing Figure)
	70,000		70,000

 

Question 73:  A and B were partners sharing profits and losses in the ratio of 3:2. Their Balance Sheet as at 31st March, 2018, was as follows:

BALANCE SHEET OF A AND B as at 31st March, 2018
Liabilities		`	Assets		`
Capitals:			Cash		8,000     36,000 60,000 6,000 76,000 1,40,000 20,000
A B	1,04,000 52,000	1,56,000	Sundry Debtors Less: Provision for Doubtful Debts	37,600 1,600
Creditors Employees' Provident Fund Workmen Compensation Fund Contingency Reserve		1,54,000 16,000 10,000 10,000	Stock Prepaid Insurance Plant and Machinery Building Furniture
		3,46,000			3,46,000

C was admitted as a new partner and brought 64,000 as capital and 15,000 for his share of goodwill premium.

The new profit-sharing ratio was 5 : 3 :2. On C's admission the following was agreed upon:

(i) Stock was to be depreciated by 5%.

(ii) Provision for doubtful debts was to be made at `2,000.

(iii) Furniture was to be depreciated by 10%.

(iv) Building was valued at `1,60,000.

(v) Capitals of A and B were to be adjusted on the basis of C's capital by bringing or paying of cash as the case may be.

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

 

Answer:

Revaluation Account
Dr.											Cr.
Particulars						`			Particulars		`
To Stock To Provision for D.D. To Furniture To Profit transferred to						3,000 400  2,000			By Building		20,000
A=14,600×3/5=			8,760
B=14,600×2/5=			5,840			14,600
						20,000					20,000
Partners’ Capital Account
Dr.																	Cr.
Particulars		A			B			C		Particulars					A	B	C
Balance c/d		1,32,260			73,340			64,000		Balance b/d					1,04,000	52,000
										Cash A/c							64,000
										Premium for Goodwill					7,500	7,500
										Revaluation A/c (Profit)					8,760	5,840
										Workers’ compensation reserve Contingency reserve					6000 6000	4000 4000
		1,32,260			73,340			64,000							1,32,260	73,340	64,000
Balance c/d		1,60,000			96,000			64,000		Balance b/d Cash A/c					1,32,260 27,740	73,340 22,660	64,000
		1,60,000			96,000			64,000							1,60,000	96,000	64,000
Balance Sheet as on March 31, 2019
Liabilities				`			Assets					`
Creditors				1,54,000			Cash (8,000+64,000+15,000+50,400)					1,37,400
							Debtors                            37,600 Less; Prov. For D.D.     2,000					35,600
Employees Provident Fund				16,000			Stock Prepaid Insurance Plant and Machinery Building					57,000 6,000 76,000 1,60,000
Capital A/cs:							Furniture					18,000
Raghu	1,60,000
Rishu	96,000
Rishabh	64,000			3,20,000
				4,90,000								4,90,000

 

Working notes;

 

WN-1 Calculation of old and sacrificing ratio;

Old ratio of A and B =3:2

New ratio of A:B:C =5:3:2

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

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

Sacrificing ratio of A and B is 1:1

 

WN-2 Calculation of new firm’s capital;

Total capital of new firm on the basis of C’s Capital

C’s capital =64,000

New firm’s total capital=64,000×10/2=`3,20,000

New capital of A,B and C

A= 3,20,000×5/10 = `1,60,000

B= 3,20,000×3/10 = `96,000

C= 3,20,000×2/10 = `64,000

 

Question 74:

Raman and Rohit were partners in a firm sharing profits and losses in the ratio of 2: 1. On 31st March, 2018, their Balance Sheet was as follows:

BALANCE SHEET OF RAMAN AND ROHIT as at 31st March, 2018
Liabilities		`	Assets		`
Capitals: Raman Rohit	1,40,000 1,00,000	240,000 40,000 1,60,000	Plant and Machinery Furniture and Fixtures Stock		1,75,000 65,000 47,000     1,03,000 50,000
Workmen Compensation Fund Creditors			Debtors Less: Provision for Doubtful Debts	1,10,000 7,000
			Bank Balance
		4,40,000			4,40,000

On the above date, Saloni was admitted in the partnership firm. Raman surrendered 2/5th of his share and Rohit surrendered 1/5th of his share in favour of Saloni. It was agreed that:

(i) Plant and machinery will be reduced by `35,000 and furniture and fixtures will be reduced to `58,500.

(ii) Provision for bad and doubtful debts will be increased by `3,000.

(iii) A claim for `16,000 for workmen's compensation was admitted.

(iv) A liability of `2,500 included in creditors is not likely to arise.

(v) Saloni will bring  `42,000 as her share of goodwill premium and proportionate capital.

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

 

Answer;

	Revaluation Account
	Dr.								Cr.
	Particulars				`				Particulars							`
	To Plant and Machinery				35,000				By Creditors							2,500
	To Furniture and fixtures				6,500				By Loss transferred to;
	To Provision of doubtful debts				3,000				Raman’s Capital A/c(42,000×2/3)					28,000
									Rohit’s Capital A/c(42,000×1/3)					14,000		42,000
					44,500											44,500
	Partners’ Capital Accounts
	Dr.																Cr.
	Particulars			Abha		Binay		Chitra		Particulars		Abha			Binay		Chitra
	To Revaluation			28,000		14,000		-		By Balance b/d		140,000			1,00,000		-
	To Balance c/d			1,61,600		1,02,400		-
										By Premium		33,600			8,400		-
										By W.C.F.		16,000			8,000		-
				1,89,600		1,16,400		-				1,89,600			1,16,400		-
	To Balance c/d			1,61,600		1,02,400		1,32,000
										Bank A/c		-			-		1,32,000
				1,61,600		1,02,400		1,32,000				1,61,600			1,02,400		1,32,000
Balance Sheet as on April 31, 2018
Liabilities			`				Assets				`
Creditors			1,57,500				Plant and Machinery Furniture and fixture				1,40,000 58,500
							Stock				47,000
worker compensation liabilities			16,000				Debtors                      1,10,000 Less; Prov. For D.D.     10,000				1,00,000
Capital A/cs:							Cash at Bank				2,24,000
Raman		1,61,600					(50,000+1,32,000+42,000)
Rohit		1,02,400
Saloni		1,32,000	3,96,000
			5,69,500								5,69,500

Working note;

WN-1

Calculation of old and sacrificing ratio

Old ratio Raman: Rohit=2:1

Raman surrenders to Saloni=2/3×2/5=4/15

Rohit surrenders to Saloni=1/3×1/5=1/15

New share of -

Raman=2/3-4/15=10-4/15=6/15

Rohit=1/3-1/15=5-1/15=4/15

Saloni=4/15+1/15+5/15

 

Therefore new ratio of Raman, Rohit and Saloni =6:4:5

Sacrificing ratio= old – new

Raman=2/3-6/15=10-6/15=4/15

Rahit=1/3-4/15=5-4/15=1/15

WN-1

Calculation of Capital of Raman and Rohit=1,61,600+1,02,400=2,64,000

Share of Raman and Rohit=6/15+4/15=6+4/15=10/15

Therefore, Capital of Raman , Rohit and Saloni=2,64,000×15/10=3,96,000

Saloni’s capital=3,96,000×5/15=1,32,000

 

Question 75:

L, M and N were partners in a firm sharing profits in the ratio of 3 : 2 : 1. Their Balance Sheet on 31st March, 2015 was as follows:

Liabilities		`	Assets	`
Creditors		1,68,000	Bank	34,000
General Reserve		42,000	Debtors	46,000
Capital's A/cs: L	1,20,000		Stock	2,20,000
M	80,000		Investments	60,000
N	40,000	2,40,000	Furniture	20,000
			Machinery	70,000
		4,50,000		4,50,000

On the above date, O was admitted as a new partner and it was decided that:
(i) The new profit-sharing ratio between L, M, N and O will be 2 : 2 : 1 : 1.
(ii) Goodwill of the firm was valued at    ` 1,80,000 and O brought his share of goodwill premium in cash.
(iii) The market value of investments was    ` 36,000.
(iv) Machinery will be reduced to    ` 58,000.
(v) A creditor of    ` 6,000 was not likely to claim the amount and hence was to be written off.
(vi) O will bring proportionate capital so as to give him 1/6th share in the profits of the firm.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the new firm.

Answer:

Revaluation Account
Dr.						Cr.
Particulars		`	Particulars		`
Investments		24,000	Creditors		6,000
Machinery		12,000	Loss on Revaluation
			L’s Capital A/c	15,000
			M’s Capital A/c	10,000
			N’s Capital A/c	5,000	30,000
		36,000			36,000

 

Partners’ Capital Account
Dr.									Cr.
Particulars	L	M	N	O	Particulars	L	M	N	O
Reval. A/c	15,000	10,000	5,000		Balance b/d	1,20,000	80,000	40,000
Balance c/d	1,56,000	84,000	42,000	56,400	Gen. Reserve	21,000	14,000	7,000
					Premium for G/w	30,000
					Cash A/c				56,400
	1,71,000	94,000	47,000	56,400		1,71,000	94,000	47,000	56,400

 

Balance Sheet as on March 31, 2016 after admission of new parnter
Liabilities		`	Assets	`
Creditors		1,62,000	Bank (34,000+56,400+30,000)	1,20,400
Capitals:			Debtors	46,000
L	1,56,000		Stock	2,20,000
M	84,000		Investments	36,000
N	42,000		Furniture	20,000
O	56,400	3,38,400	Machinery	58,000
		5,00,400		5,00,400

 

Working Notes:
 

WN1: Calculation of Sacrificing Ratio
Sacrificing Ratio =Old ratio- new ratio

L= 3/6-2/6=1/6

M=2/6-2/6=Nil

N=1/6-1/6=- Nil

 

WN2: Adjustment of Goodwill
O‘s of goodwill=1,80,000×1/6=30,000

30,000 will be credited to L’s capital because he is only sacrifice.

WN3 Calculation of O’s Proportionate Capital

Adjusted old capital of L =

Adjusted old capital of M =

Adjusted old capital of N =

O’s proportion capital=Total adjusted capital×O’s profit share × reciprocal combined new share of old partners

=2,82,000×1/6×6/5=56,400