Question 66:
Rajesh and Ravi are partners sharing profits in the ratio of 3 : 2. Their Balance Sheet at 31st March, 2026 stood as:
|
BALANCE SHEET as at 31st March, 2026 |
|||||
|
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, 2026 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 67:
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 |
||
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|
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||
Working Notes:
Calculation of
Goodwill brought in by Aditya
|
Average Profits |
= |
(Normal profits from 31st March, 2015 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 |
||
|
|
|
|
|
||
Question 68:
A and B are partners in a firm. The net profit of the firm is divided as follows: 1/2 to A, 1/3 to B and 1/6 carried to a Reserve. They admit C as a partner on 1st April, 2026 on which date, the Balance Sheet of the firm was:
|
|
||||
|
Liabilities |
₹ |
Assets |
₹ |
|
|
Capital A/cs: |
|
Building |
50,000 |
|
|
A |
50,000 |
|
Plant and Machinery |
30,000 |
|
B |
40,000 |
90,000 |
Stock |
18,000 |
|
Reserve |
|
10,000 |
Debtors |
22,000 |
|
Creditors |
|
20,000 |
Bank |
5,000 |
|
Outstanding Expenses |
|
5,000 |
|
|
|
|
|
|
|
|
|
|
|
1,25,000 |
|
1,25,000 |
|
|
|
|
|
|
Following
are the required adjustments on admission of C:
(a) C brings
in₹ 25,000 towards his capital.
(b) C also
brings in₹ 5,000 for 1/5th share of goodwill.
(c) Stock is undervalued by 10%.
(d) Creditors include a liability of ₹ 4,000, which has been decided by the
court at ₹ 3,200.
(e) In regard to the Debtors, the following Debts proved Bad or Doubtful−
₹ 2,000 due from X−bad to the full
extent;
₹ 4,000 due from Y−insolvent,
estate expected to pay only 50%.
You are required to prepare Revaluation Account, Partners' Capital Accounts and
Balance Sheet of the new firm.
Answer:
|
Revaluation Account |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
₹ |
Particulars |
₹ |
|
Bad Debts |
2,000 |
Stock |
2,000 |
|
Provision for Doubtful Debts |
2,000 |
Creditors (4,000 – 3,200) |
800 |
|
(4,000 × 50%) |
|
|
|
|
|
|
Loss transferred to |
|
|
|
|
A Capital |
720 |
|
|
|
B Capital |
480 |
|
|
4,000 |
|
4,000 |
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
|
|
|
|
|
Cr. |
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
Revaluation |
720 |
480 |
|
Balance b/d |
50,000 |
40,000 |
|
|
|
|
|
|
Reserve |
6,000 |
4,000 |
|
|
|
|
|
|
Bank |
|
|
25,000 |
|
Balance c/d |
58,280 |
45,520 |
25,000 |
Premium for Goodwill |
3,000 |
2,000 |
|
|
|
59,000 |
46,000 |
25,000 |
|
59,000 |
46,000 |
25,000 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2026 after C’s admission |
|||||
|
Liabilities |
₹ |
Assets |
₹ |
||
|
Capital A/cs: |
|
Building |
50,000 |
||
|
A |
58,280 |
|
Plan and Machinery |
30,000 |
|
|
B |
45,520 |
|
Stock (18,000 × 100/90) |
20,000 |
|
|
C |
25,000 |
1,28,800 |
Debtors |
22,000 |
|
|
Creditors (20,000 – 800) |
19,200 |
Less: Bad Debts |
2,000 |
|
|
|
Outstanding Expenses |
5,000 |
Less: Prov. for D. Debts |
2,000 |
18,000 |
|
|
|
|
Bank (5,000 + 30,000) |
35,000 |
||
|
|
1,53,000 |
|
1,53,000 |
||
|
|
|
|
|
||
Working Notes
WN1
old ration ; ½:1/3=3:2
Sacrificing
ratio=3:2
WN2
Distribution of Reserve
A will get =10,000×3/5=6,000
B will get =10,000×2/5=4,000
WN3
Distribution of Premium for Goodwill
A will get =5,000×3/5=3,000
B will get =5,000×2/5=2,000
Question 69:
X and Y were partners in the profit-sharing ratio of 3 : 2. Their balance sheet as at 31st March, 2022 as follows:
|
BALANCE SHEET as at 31st March, 2022 |
|||
|
Liabilities |
₹ |
Assets |
₹ |
|
Creditors |
56,000 |
Plant and Machinery |
70,000 |
|
General Reserve |
14,000 |
Buildings |
98,000 |
|
Capital A/cs: |
|
Stock |
21,000 |
|
X-1,19,000 |
|
Debtors 42,000 |
|
|
Y-1,12,000 |
2,31,000 |
Less: Provision 7,000 |
35,000 |
|
|
|
Cash in Hand |
77,000 |
|
|
|
|
|
|
|
3,01,000 |
|
3,01,000 |
Z was admitted for 1/6th share on the following terms:
(i) Z will bring ₹ 56,000 as his share of capital, but was not able to bring any amount to compensate the sacrificing partners.
(ii) Goodwill of the firm is valued at ₹ 84,000.
(iii) Plant and Machinery were found to be undervalued by ₹ 14,000 Building was to brought up to ₹ 1,09,000.
(iv) All debtors are good.
(v) Capitals of X and Y will be adjusted on the basis of Z's share and adjustments will be done by opening necessary current accounts.
You are required to prepare Revaluation Account and Partners' Capital Accounts.
(CBSE Sample Paper 2023)
Answer:
|
Revaluation Account |
||||
|
Dr. |
|
Cr. |
||
|
Particulars |
₹ |
Particulars |
₹ |
|
|
Profit transferred to |
|
|
Plant and Machinery |
14,000 |
|
X’s Capital - 19,200 |
|
|
Building |
11,000 |
|
Y’s Capital - 12,800 |
32,000 |
Provision for Doubtful debts |
7,000 |
|
|
|
|
|
|
|
|
|
32,000 |
|
32,000 |
|
|
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
|
Y’s Current A/c |
- |
24,000 |
- |
Balance b/d |
1,19,000 |
1,12,000 |
- |
|
Balance c/d |
1,68,000 |
1,12,000 |
56,000 |
Revaluations A/c |
19,200 |
12,800 |
- |
|
|
|
|
|
General Reserve A/c |
8,400 |
5,600 |
- |
|
|
|
|
|
Cash A/c |
- |
- |
56,000 |
|
|
|
|
|
Z’s Current A/c |
8,400 |
5,600 |
|
|
|
|
|
|
X’s Current A/c |
13,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,68,000 |
1,36,000 |
56,000 |
|
1,68,000 |
1,36,000 |
56,000 |
|
|
|
|
|
|
|
|
|
Working notes:
1. Treatment of goodwill
Z’s Share of Goodwill =84,000×1/6=14,000
S and Y Will be compensated as follows:
X =14,000×3/5=8,400
Y =14,000×2/5=5,600
Journal entry for adjustment of Goodwill
|
Z’s capital A/c |
Dr. |
14,000 |
|
|
ToX’s capital A/c ToY’s capital A/c |
|
|
8,400 5,600 |
2. Capital adjustments
New capital of firm on the basis of Z’s capital
=56,000×6/1=3,36,000
Share of each partner in new capital of firm
Z’s Share of capital is 56,000
Remaining capital of X and Y (3,36,000-56,000=2,80,000)
X =2,80,000×3/5=1,68,000
Y =2,80,000×2/5=1,12,000
Journal entry for adjustment of Capital
|
X’s Current A/c |
Dr. |
13,000 |
|
|
ToX’s capital A/c (Being Capital increased by adjustments) |
|
|
13,000 |
|
Y’s Capital A/c |
Dr. |
24,000 |
|
|
ToY’s Current A/c (Being Capital Decreased by adjustments) |
|
|
24,000 |
Question 70:
Shubhi and Revanshi were partners in a irm sharing profits and losses in the ratio of 3 :2. Their Balance
Sheet as at 31st March, 2023 was as follows:
|
Liabilities |
|
₹ |
Assets |
₹ |
|
Capitals: |
|
|
Fixed Assets |
90,000 |
|
Shubhi |
60,000 |
|
Stock |
38,000 |
|
Revanshi |
32,000 |
92,000 |
Debtors |
30,000 |
|
General Reserve |
|
30,000 |
Cash |
52,000 |
|
Bank Loan |
|
18,000 |
|
|
|
Creditors |
|
70,000 |
|
|
|
|
|
2,10,000 |
|
2,10,000 |
On 1st April, 2023, they admitted Pari into the partnership on the following terms:
(i) Pari will bring ₹50,000 as her capital and ₹50,000 for her share of premium for goodwill for 1/4th share in the profits of the firm.
(i) Fixed assets were depreciated @ 30%.
(iü) Stock was valued at ₹45,000.
(iv) Bank loan was paid off.
(v) After all adjustments capitals of Shubhi and Revanshi were to be adjusted taking Pari's capital as the base. Actual cash was to be paid off or brought in by the old partners as the case may be.
Prepare Revaluation Account and Partners' Capital Accounts.
(CBSE 2024)
Answer:
|
Revalution A/c |
||||
|
Particulars |
₹ |
Particulars |
|
₹ |
|
Fixed Assets |
27,000 |
Stock |
|
7,000 |
|
|
|
Loss |
|
20,000 |
|
|
|
Shubhi’s Capital |
12,000 |
|
|
|
|
Revanshi’s Capital |
8,000 |
|
|
|
27,000 |
|
|
27,000 |
|
Capital Account |
|
|||||||
|
Particulars |
Shubhi |
Revanshi |
Pari |
Particulars |
Shubhi |
Revanshi |
Pari |
|
|
To Revalution A/c |
12,000 |
8,000 |
- |
By Balance b/d |
60,000 |
32,000 |
- |
|
|
|
|
|
|
By Cash A/c |
- |
- |
50,000 |
|
|
To Balance c/d |
96,000 |
56,000 |
50,000 |
To Premium for Goodwill A/c |
30,000 |
20,000 |
- |
|
|
|
|
|
|
By General Reserve A/c |
18,000 |
12,000 |
- |
|
|
|
1,08,000 |
64,000 |
50,000 |
|
1,08,000 |
64,000 |
50,000 |
|
|
To Cash A/c |
6,000 |
- |
- |
By Balance b/d |
96,000 |
56,000 |
50,000 |
|
|
To Balance c/d (WN1) |
90,000 |
60,000 |
50,000 |
By Cash A/c |
- |
4,000 |
- |
|
|
|
96,000 |
60,000 |
50,000 |
|
96,000 |
60,000 |
50,000 |
|
Working note:
WN1-
Total capital of firm as per capital brought by Pari = 50,000×4=2,00,000
New capital of;
Total Capital of Shubhi and Revanshi = 2,00,000-50,000=1,50,000
Shubhi = 1,50,000×3/5 = 90,000
Revanshi = 1,50,000×2/5 = 60,000
Ts Grewal Solution 2026-2027
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Class 12 / Volume – I