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:
X and Y share profits in the ratio of 5 : 3. Their Balance Sheet as at 31st March, 2024 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, 2024. 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. |
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, 2024 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
Question 63:
Rajesh
and Ravi are partners sharing profits in the ratio of 3 :
2. Their Balance Sheet at 31st March, 2024 stood as:
|
BALANCE SHEET as at 31st March, 2024 |
|||||
|
Liabilities |
` |
Assets |
` |
||
|
Creditors |
38,500 |
Cash |
2,000 |
||
|
Outstanding Rent |
4,000 |
Stock |
15,000 |
||
|
Capital A/cs: |
|
Prepaid Insurance |
1,500 |
||
|
Rajesh |
29,000 |
|
Debtors |
9,400 |
|
|
Ravi |
15,000 |
|
Less
: Provision for Doubtful Debts |
400 |
9,000 |
|
|
|
Machinery |
19,000 |
||
|
|
|
Building |
35,000 |
||
|
|
|
Furniture |
5,000 |
||
|
|
86,500 |
|
86,500 |
||
|
|
|
|
|
||
Raman is admitted as a new partner introducing a capital of ` 16,000. The new profit-sharing
ratio is decided as 5 : 3 : 2. Raman is unable to
bring in any cash for goodwill. So, it is decided to value the goodwill on the
basis of Raman's share in the profits and the capital contributed by him.
Following revaluations are made:
(a) Stock to decrease by 5%;
(b) Provision for Doubtful Debts is to be
` 500;
(c) Furniture to decrease by 10%;
(d) Building is valued at ` 40,000.
Show necessary Ledger Accounts and Balance Sheet of new firm.
Answer:
|
Revaluation Account |
||||
|
Dr. |
|
Cr. |
||
|
Particulars |
` |
Particulars |
` |
|
|
Stock |
750 |
Building |
5,000 |
|
|
Provision
for D. Debts |
500 |
|
|
|
|
Less: Old Provision |
400 |
100 |
|
|
|
Furniture |
500 |
|
|
|
|
|
|
|
|
|
|
Profit
on Revaluation transferred to |
|
|
|
|
|
Rajesh Capital |
2,190 |
|
|
|
|
Ravi Capital |
1,460 |
|
|
|
|
|
5,000 |
|
5,000 |
|
|
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
Rajesh |
Ravi |
Raman |
Particulars |
Rajesh |
Ravi |
Raman |
|
|
|
|
|
Balance
b/d |
29,000 |
15,000 |
|
|
|
|
|
|
Revaluation |
2,190 |
1,460 |
|
|
Balance
c/d |
31,190 |
16,460 |
16,000 |
Cash |
|
|
16,000 |
|
(before
and just went of |
|
|
|
|
|
|
|
|
Goodwill) |
|
|
|
|
|
|
|
|
|
31,190 |
16,460 |
16,000 |
|
31,190 |
16,460 |
16,000 |
|
Rajesh’s
Capital |
|
|
1,635 |
Balance
c/d |
31,190 |
16,460 |
16,000 |
|
Raman’s
Capital |
|
|
1,635 |
Raman’s
Capital |
1,635 |
1,635 |
|
|
Balance
c/d |
32,825 |
18,095 |
12,730 |
|
|
|
|
|
|
32,825 |
18,095 |
16,000 |
|
32,825 |
18,095 |
16,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on March 31, 2024 after Raman’s admission |
|||||
|
Liabilities |
` |
Assets |
` |
||
|
Creditors |
38,500 |
Cash
(2,000 + 16,000) |
18,000 |
||
|
Outstanding
Rent |
4,000 |
Stock
(15,000 – 750) |
14,250 |
||
|
Capital
A/cs: |
|
Prepaid
Insurance |
1,500 |
||
|
Rajesh |
32,825 |
|
Debtors |
9,400 |
|
|
Ravi |
18,095 |
|
Less: Provision for D. Debts |
500 |
8,900 |
|
Raman |
12,730 |
63,730 |
Machinery |
19,000 |
|
|
|
|
Building
(35,000 + 5,000) |
40,000 |
||
|
|
|
Furniture
(5,000 – 500) |
4,500 |
||
|
|
1,06,150 |
|
1,06,150 |
||
|
|
|
|
|
||
Working Notes-
WN1 Calculation of
Sacrificing Ratio
|
|
Rajesh |
Ravi |
Raman |
|
OLD
RATION |
3 : |
2 |
|
|
NEW
RATIO |
5 : |
3 : |
2 |
Sacrificing Ratio = Old Ratio − New Ratio
|
Rajesh’s |
=3/5-5/10 |
|
|||
|
|
=1/10 |
|
|||
|
Ravi’s |
=2/5-3/10 |
|
|||
|
|
=1/10 |
|
|||
|
|
Rajesh |
|
Ravi |
|||
|
Sacrificing
ratio= |
1/10 |
: |
1/10 |
|||
|
= |
1 |
: |
1 |
|||
WN2 Calculation of Goodwill
Actual Capital of all Partners before adjustment of goodwill = Rajesh’s Capital
+ Ravi’s Capital + Raman’s Capital
= 31,190 + 16,460 + 16,000
= ` 63,650
Capitalised value on the basis of Raman’s share =16,000×10/2=80,000
Goodwill of thefirm= Capitalised value of
the firm-Actual capital of the firm (before adjument of the goodwill)
=80,000-63,650
=16,350
Raman’s share of Goodwill =16,350×2/10=3,270
WN3 Adjustment of Raman’s
share of goodwill
Rajesh and Ravi each Capital Accounts will be credited by =3,270×1/2=1,635
|
Journal |
||||
|
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
Raman’s
Capital A/c |
Dr. |
|
3,270 |
|
|
To Rajesh’s Capital A/c |
|
|
1,635 |
|
|
To Ravi’s Capital A/c |
|
|
1,635 |
|
|
(Raman’s
share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
|
WN4 Distribution of Profit
on Revaluation (in old ratio)
Rajesh
will get =3,650×3/5=2190
Ravi will get =3,650×2/5=1460
Question 64:
On 31st March, 2019, the Balance Sheet of A
and B, who were sharing profits in the ratio of 3 : 2
was as follows:
|
Liabilities |
` |
Assets |
` |
|
||
|
Creditors Investment
Fluctuation Fund General
Reserve Capitals
A/cs: |
30,000 12,000 25,000 |
Cash at
Bank |
20,000 |
|
||
|
Debtors Less:
Provision for Bad Debts |
85,000 5,000 |
80,000 |
|
|||
|
Stock Investments
Furniture |
1,30,000 60,000 77,000 |
|||||
|
A B |
1,60,000 1,40,000 |
3,00,000 |
|
|||
|
|
3,67,000 |
|
3,67,000 |
|
||
|
||||||
On 1st
April, 2019, they decided to admit C as a new partner for 1/5th share in the
profits on the following terms:
(i) C brought `1,00,000 as
his capital and `50,000 as his share of premium for goodwill.
(ii)
Outstanding salaries of `2,000 be provided for.
(iii) The
market value of investments was `50,000.
(iv) A
debtor whose dues of `18,000 were written off as bad debts paid `12,000 in full settlement.
Prepare
Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the
new firm. (CBSE 2020)
Answer:
|
Revaluation A/c |
||||
|
Particulars |
` |
Particulars |
` |
|
|
To
Outstanding salary To Gain
transferred to: (WN1) |
2,000 10,000 |
By Bad
debts Recovered A/c |
12,000 |
|
|
A’s
Capital A/c B’s
Capital A/c |
6,000 4,000 |
|||
|
|
12,000 |
|
12,000 |
|
|
Capital A/c |
|||||||
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
To Balance
c/d |
2,12,200 |
1,74,800 |
1,00,000 |
By Balance
b/d By
revaluation A/c By
Investment Fluctuation Fund (WN2) By General
Reserve A/c(WN3) By Bank
A/c By Premium
A/c (WN4) |
1,60,000 6,000 1,200 15,000 - 30,000 |
140,000 4,000 800 10,000 - 20,000 |
- - - - 1,00,000 - |
|
|
2,12,200 |
1,74,800 |
1,00,000 |
|
2,12,200 |
1,74,800 |
1,00,000 |
|
Balance Sheet |
||||||
|
Particulars |
` |
Particulars |
` |
|||
|
Creditors O/s Salary Capitals
A/cs: |
30,000 2,000 4,87,000 |
Cash (WN5) |
1,82,000 |
|||
|
Debtors Less: Pro.
D. D. |
85,000 5,000 |
80,000 |
||||
|
Stock Investment Furniture |
1,30,000 50,000 77,000 |
|||||
|
A B C |
2,12,200 1,74,800 1,00,000 |
|||||
|
|
|
|||||
|
|
5,19,000 |
|
5,19,000 |
|||
|
||||||
Working Notes;
WN1 Distribution of Revaluation Gain in
3:2
A=10,000×3/5=6,000
B=10,000×2/5=4,000
WN2 Investment fluctuation Reserve in 3:2
A = 2,000×3/5 =
1,200
B = 2,000×2/5 =
800
WN3 General Reserve in 3:2
A = 25,000×3/5 =
15,000
B = 25,000×2/5 =
10,000
\
WN4 Distribution of Premium in
Sacrificing Ratio 3:2
A = 50,000×3/5 =
30,000
B = 50,000×2/5 =
20,000
WN5 Cash balance
Cash Balance
= 20,000+1,00,000+50,000+12,000
Cash Balance
= 1,82,000
Question 65:
Divya, Yasmin and Fatima are partners in a firm, sharing profits
and losses in 11 : 7 : 2 respectively. The Balance
Sheet of the firm on 31st March, 2018 was as follows:
|
BALANCE
SHEET as at 31st March, 2018 |
|||||
|
Liabilities |
` |
Assets |
` |
||
|
Sundry Creditors |
70,000 |
Factory Building |
7,35,000 |
||
|
Public Deposits |
1,19,000 |
Plant and Machinery |
1,80,000 |
||
|
Reserve Fund |
90,000 |
Furniture |
2,60,000 |
||
|
Outstanding Expenses |
10,000 |
Stock |
1,45,000 |
||
|
Capital A/cs: |
|
Debtors |
1,50,000 |
|
|
|
Divya |
5,10,000 |
|
Less:
Provision |
(30,000) |
1,20,000 |
|
Yasmin |
3,00,000 |
|
Cash at Bank |
1,59,000 |
|
|
Fatima |
5,00,000 |
13,10,000 |
|
|
|
|
|
15,99,000 |
|
15,99,000 |
||
|
|
|
|
|
||
On 1st April, 2018, Aditya is admitted as a
partner for one-fifth share in the profits with a capital of ` 4,50,000
and necessary amount for his share of goodwill on the following terms:
(a) Furniture of ` 2,40,000 were to
be taken over Divya, Yasmin
and Fatima equally.
(b) A creditor of ` 7,000 not recorded
in books to be taken into account.
(c) Goodwill of the firm is to be valued at 2.5 years' purchase of average
profits of last two years. The profit of the last three years were:
2015-16 − ` 6,00,000;
2016-17 − ` 2,00,000;
2017-18 − ` 6,00,000.
(d) At time of Aditya's admission. Yasmin also brought in ` 50,000 as fresh capital.
(e) Plant and Machinery is re-valued to
` 2,00,000 and expenses outstanding were brought down
to ` 9,000.
Prepare Revaluation Account, Partners Capital Account and the Balance Sheet of
the reconstituted firm.
Answer:
|
In the books of Divya, Yasmin, Fatima and Aditya |
||||||
|
Dr. |
Revaluation A/c |
Cr. |
||||
|
Particulars |
` |
Particulars |
` |
|||
|
To Sundry Creditors A/c |
7,000 |
By Plant and Machinery A/c |
20,000 |
|||
|
To Profit Transferred to: |
|
By Outstanding Expenses A/c |
1,000 |
|||
|
Divya’s
Capital A/c |
7,700 |
|
|
|
||
|
Yasmin’s Capital A/c |
4,900 |
|
|
|
||
|
Fatima’s Capital A/c |
1,400 |
14,000 |
|
|
||
|
|
|
|
|
|||
|
|
21,000 |
|
21,000 |
|||
|
|
|
|
|
|||
|
Dr. |
Partner’s Capital A/c |
Cr. |
|||||||||
|
Particulars |
Divya ` |
Yasmin ` |
Fatima ` |
Aditya ` |
Particulars |
Divya ` |
Yasmin ` |
Fatima ` |
Aditya ` |
||
|
To Furniture A/c |
80,000 |
80,000 |
80,000 |
|
By balance b/d |
5,10,000 |
3,00,000 |
5,00,000 |
|
||
|
|
|
|
|
|
By Bank A/c |
|
50,000 |
|
4,50,000 |
||
|
To balance c/d |
5,97,200 |
3,76,400 |
4,50,400 |
4,50,000 |
By Premium |
1,10,000 |
70,000 |
20,000 |
|
||
|
|
|
|
|
|
for Goodwill A/c |
|
|
|
|
||
|
|
|
|
|
|
By Reserve Fund A/c |
49,500 |
31,500 |
9,000 |
|
||
|
|
|
|
|
|
By Revaluation A/c |
7,700 |
4,900 |
1,400 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
|
|
6,77,200 |
4,56,400 |
5,30,400 |
4,50,000 |
|
6,77,200 |
4,56,400 |
5,30,400 |
4,50,000 |
||
|
|
|
|
|
|
|
|
|
|
|
||
Working Notes:
Calculation of Goodwill brought in by Aditya
|
Average Profits |
= |
(Normal profits from 31st March, 2017 to 31st
March, 2018)/2 |
|
|
= |
`
(2,00,000 + 6,00,000)/2= ` 4,00,000 |
|
Goodwill |
= |
Average Profits × No. of years of Purchase |
|
|
= |
`
(4,00,000 × 2.5) = ` 10,00,000 |
|
Goodwill
brought in by Aditya |
= |
`
(10,00,000 × 1/5) = ` 2,00,000 |
|
Balance Sheet |
|||||
|
as at 31st March, 2018 |
|||||
|
Liabilities |
` |
Assets |
` |
||
|
Capitals: |
|
Factory Building |
7,35,000 |
||
|
Divya |
5,97,200 |
|
Plant and Machinery |
2,00,000 |
|
|
Yasmin |
3,76,400 |
|
Furniture |
20,000 |
|
|
Fatima |
4,50,400 |
|
Stock |
1,45,000 |
|
|
Aditya |
4,50,000 |
18,74,000 |
Debtors |
1,50,000 |
|
|
Sundry Creditors |
77,000 |
Less:
Provision |
(30,000) |
1,20,000 |
|
|
Public Deposits |
1,19,000 |
Cash at Bank |
8,59,000 |
||
|
Outstanding Expenses
|
9,000 |
(1,59,000 + 2,00,000 + 50,000 + 4,50,000) |
|
||
|
|
|
|
|
||
|
|
20,79,000 |
|
20,79,000 |
||
|
|
|
|
|
||
Ts Grewal Solution 2025-2026
Click below for more Questions
Class 12 / Volume – I