Question
31:
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 |
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|
Advertisement Suspense A/c |
800 |
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|
|
|
|
1,26,800 |
|
1,26,800 |
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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: 2020
− `
7,500; 2021 − `
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 |
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|
Dr. |
Cr. |
|||
|
Particulars |
( `) |
Particulars |
( `) |
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|
Profit
transferred to: |
|
Machinery |
7,000 |
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|
X’s
Capital A/c |
5,000 |
|
Stock |
1,000 |
|
Y’s
Capital A/c |
3,000 |
8,000 |
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|
8,000 |
|
8,000 |
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Partners’ Capital Account |
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|
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) |
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|
65,500 |
60,300 |
|
65,500 |
60,300 |
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Balance Sheet |
|||
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as on April 01, 2023 (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 ( `) |
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|
|
Workmen’s
Compensation Reserve A/c |
Dr. |
|
10,000 |
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|
To Workmen’s
Compensation Claim A/c |
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|
6,000 |
|
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|
To X’s Capital A/c |
|
|
2,500 |
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To Y’s Capital A/c |
|
|
1,500 |
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|
(Being
Workmen’s compensation claim distributed among partners in their old ratio
i.e. 5 : 3) |
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X’s
Capital A/c |
Dr. |
|
5,000 |
|
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Y’s
Capital A/c |
Dr. |
|
3,000 |
|
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|
To Goodwill A/c |
|
|
8,000 |
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|
(Being
Goodwill written off among partners in their old ratio) |
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X’s
Capital A/c |
Dr. |
|
500 |
|
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Y’s
Capital A/c |
Dr. |
|
300 |
|
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To Advertisement
Suspense A/c |
|
|
800 |
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|
|
(Being
Advertisement Suspense written off among partners in their old ratio) |
|
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General
Reserve A/c |
Dr. |
|
4,800 |
|
|
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To X’s Capital A/c |
|
|
3,000 |
|
|
|
To Y’s Capital A/c |
|
|
1,800 |
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|
(Being
General Reserve distributed among partners in their old ratio) |
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Revaluation
A/c |
Dr. |
|
8,000 |
|
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To X’s Capital A/c |
|
|
5,000 |
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To Y’s Capital A/c |
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|
3,000 |
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(Being
Revaluation profit distributed among partners in their old ratio) |
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Y’s
Capital A/c |
Dr. |
|
3,000 |
|
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To X’s Capital A/c |
|
|
3,000 |
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|
(Being
Adjustment of goodwill made) |
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Question 32:
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:
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BALANCE SHEET OF RAM, MOHAN, SOHAN AND HARI as on 1st April, 2016 |
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Liabilities |
` |
Assets |
` |
|
|
Capital A/cs: |
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Fixed Assets |
9,00,000 |
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|
Ram |
4,00,000 |
|
Current Assets |
5,20,000 |
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Mohan |
4,50,000 |
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Sohan |
2,50,000 |
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Hari |
2,00,000 |
13,00,000 |
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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 |
|
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|
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|
Ram’s Capital A/c |
12,000 |
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Mohan’s Capital A/c |
9,000 |
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Sohan’s Capital A/c |
6,000 |
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|
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Hari’s Capital A/c |
3,000 |
30,000 |
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|
30,000 |
|
30,000 |
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|
Partners’ Capital Account |
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|
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 |
|
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|
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 |
|
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|
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|
4,54,000 |
4,68,000 |
4,05,000 |
5,65,000 |
|
4,54,000 |
4,68,000 |
4,05,000 |
5,65,000 |
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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 |
|
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||
|
Sohan |
1,55,000 |
|
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|
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Hari |
3,65,000 |
5,20,000 |
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|
Claim against WCF |
1,50,000 |
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||
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|
|
|
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||
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|
19,40,000 |
|
19,40,000 |
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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) |
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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 33:
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 |
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Mahesh |
2,00,000 |
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Ganesh |
2,50,000 |
7,00,000 |
|
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Sundry Creditors |
|
1,70,000 |
|
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|
Workmen Compensation Reserve |
|
75,000 |
|
|
|
|
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|
9,45,000 |
|
9,45,000 |
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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 |
|
|
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|
Ramesh’s Capital A/c |
17,000 |
|
|
|
|
Mahesh’s Capital A/c |
25,500 |
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|
|
|
Ganesh’s Capital A/c |
25,500 |
85,000 |
|
|
|
|
|
|
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|
85,000 |
|
85,000 |
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|
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 |
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|
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 |
|
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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 2023-2024
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Class 12 / Volume – I