Double Entry
Book Keeping Ts Grewal Volume I 2021-2022 Solutions for Class 12
Commerce
Accountancy Chapter 5 - Admission Of A
Partner
Page No 5.111:
Question 91:
Pradeep and Dhanraj were partners in a firm sharing profits in the ratio of 3 : 1. Their Balance Sheet on 31st March, 2021 was:
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Liabilities |
` |
Assets |
` |
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Creditors |
30,000 |
Cash |
4,000 |
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Bills
Payable |
1,000 |
Debtors |
50,000 |
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Reserve
Fund |
|
16,000 |
Less: Provision for
Doubtful Debts |
5,000 |
45,000 |
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Outstanding
Salary |
|
3,000 |
Stock |
30,000 |
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Capital
A/cs: |
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Bills
Receivable |
10,000 |
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Pradeep |
60,000 |
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Patents |
1,000 |
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Dhanraj |
20,000 |
80,000 |
Machinery
|
40,000 |
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1,30,000 |
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1,30,000 |
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They admitted Leander as a new partner
on this date. New profit-sharing ratio is agreed as 3 : 2 : 3. Leander brings
in proportionate capital after the following adjustments:
(a) Leander brings ` 16,000 as his share of goodwill.
(b) Provisions for Doubtful Debts is to be reduced by ` 2,000.
(c) There is an old Printer valued at
` 2,400. It does
not appear in the books of the firm. It is now to be recorded.
(d) Patents are valueless.
Prepare Revaluation Account, Capital Accounts and opening Balance Sheet
of Pradeep, Dhanraj and Leander.
Answer:
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Revaluation Account |
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Dr. |
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Cr. |
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Particulars |
Amount ` |
Particulars |
Amount ` |
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Patents |
1,000 |
Provision for Doubtful Debts |
2,000 |
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Profit on transferred to |
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Typewriter |
2,400 |
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Pradeep Capital |
2,550 |
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Dhanraj Capital |
850 |
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4,400 |
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4,400 |
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Partners’ Capital Accounts |
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Dr. |
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Cr. |
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Particulars |
Pradeep |
Dhanraj |
Leander |
Particulars |
Pradeep |
Dhanraj |
Leander |
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Balance b/d |
60,000 |
20,000 |
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Balance c/d |
90,550 |
24,850 |
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Reserve Fund |
12,000 |
4,000 |
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(after adjustments) |
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Revaluation |
2,550 |
850 |
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Premium for Goodwill |
16,000 |
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90,550 |
24,850 |
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90,550 |
24,850 |
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Balance c/d |
90,550 |
24,850 |
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Cash |
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69,240 |
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Balance c/d |
90,550 |
24,850 |
69,240 |
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90,550 |
24,850 |
69,240 |
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90,550 |
24,850 |
69,240 |
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Balance Sheet as on March 31, 2021 after Leander’s admission |
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Liabilities |
Amount ` |
Assets |
Amount ` |
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Creditors |
30,000 |
Debtors |
50,000 |
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Bills Receivable |
1,000 |
Less: Prov. for D. Debts |
3,000 |
47,000 |
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Outstanding Salary |
3,000 |
Stock |
30,000 |
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Capital A/cs: |
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Bills Receivable |
10,000 |
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Pradeep |
90,550 |
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Machinery |
40,000 |
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Dhanraj |
24,850 |
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Typewriter |
2,400 |
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Leander |
69,240 |
1,84,640 |
Cash |
89,240 |
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2,18,640 |
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2,18,640 |
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Working Notes
WN1
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Pradeep |
Dhanraj |
Leander |
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OLD RATION |
3 : |
1 |
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NEW RATIO |
3 : |
2 : |
3 |
Sacrificing
Ratio =Old ratio- new ratio
Pradeep = 3/4-3/8=3/8
Dhanraj =1/4-2/8=0/8
Leander
acquires his share of profit from Pradeep only. Therefore, amount for goodwill
brought by Leander will be taken by Pradeep alone.
WN2
Distribution of Revaluation Profit
Pradeep ‘s
share =3,400×3/4=2,550
Dhanraj’s share=3,400×1/4=850
WN3
Distribution of Reserve Fund
Pradeep ‘s
share =16,000×3/4=12,000
Dhanraj’s share=16,000×1/4=4,000
WN4
Calculation of Leander’s Capital
Combined Capital of Pradeep and Dhanraj after all adjustments = 90,550 + 24,850
= 1, 15,400
Combined share of profit of Pradeep and Dhanraj = 1 − Leander share
=1-3/8=5/8
Total Capital of the firm on the basis of combined capital of Pradeep and
Dhanraj
=1,15,400×8/5=1,84,640
Leander’s capital=1,84,640×3/8=69,240
WN5
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Cash Account |
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Dr. |
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Cr. |
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Particulars |
Amount ` |
Particulars |
Amount ` |
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Balance b/d |
4,000 |
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Leander’s Capital |
69,240 |
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Premium for Goodwill |
16,000 |
Balance c/d |
89,240 |
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89,240 |
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89,240 |
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Page No 5.111:
Question 92:
Kalpana and Kanika were partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2021, they admitted Karuna as a new partner for 1/5th share in the profits of the firm. The Balance Sheet of Kalpana and Kanika as on 1st April, 2021 was as follows:
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BALANCE SHEET OF
KALPANA AND KANIKA as on 1st April, 2021 |
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Liabilities |
` |
Assets |
` |
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Capital
A/cs: |
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Land
and Building
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2,10,000 |
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Kalpana |
4,80,000 |
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Plant |
2,70,000 |
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Kanika |
2,10,000 |
6,90,000 |
Stock |
2,10,000 |
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General
Reserve |
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60,000 |
Debtors |
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1,32,000 |
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Workmen's
Compensation Fund |
|
1,00,000 |
Less: Provision |
12,000 |
1,20,000 |
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Creditors |
90,000 |
Cash |
26,000 |
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1,30,000 |
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9,40,000 |
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9,40,000 |
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It was agreed that:
(a) the value of Land and Building will be appreciated by 20%.
(b) the value of plant be increased by
` 60,000.
(c) Karuna will bring ` 80,000 for her share of goodwill premium.
(d) the liabilities of Workmen's Compensation Fund were determined
at ` 60,000.
(e) Karuna will bring in cash as capital to the extent of 1/5th share of the
total capital of the new firm.
Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of
the new firm.
(Foreign
2014, Modified)
Answer:
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Revaluation Account |
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Dr. |
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Cr. |
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Particulars |
Amount ` |
Particulars |
Amount ` |
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Revaluation Profit |
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Land and Building A/c |
42,000 |
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Kalpana’s Capital A/c |
61,200 |
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Plant A/c |
60,000 |
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Kanika’s Capital A/c |
40,800 |
1,02,000 |
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1,02,000 |
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1,02,000 |
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Partners’ Capital Accounts |
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Dr. |
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Cr. |
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Particulars |
Kalpana |
Kanika |
Karuna |
Particulars |
Kalpana |
Kanika |
Karuna |
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Balance b/d |
4,80,000 |
2,10,000 |
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Cash |
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2,43,000 |
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Balance c/d |
6,49,200 |
3,22,800 |
2,43,000 |
General Reserve |
36,000 |
24,000 |
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Workmen Compensation Fund |
24,000 |
16,000 |
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Revaluation A/c |
61,200 |
40,800 |
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Premium for Goodwill |
48,000 |
32,000 |
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6,49,200 |
3,22,800 |
2,43,000 |
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6,49,200 |
3,22,800 |
2,43,000 |
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Balance Sheet as on April 01, 2021 after Karuna’s admission |
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Liabilities |
Amount ` |
Assets |
Amount ` |
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Creditors |
90,000 |
Cash in Hand |
4,53,000 |
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Capitals: |
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Debtors |
1,32,000 |
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Kalpana |
6,49,200 |
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Less: Provision for debtors |
12,000 |
1,20,000 |
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Kanika |
3,22,800 |
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Stock |
2,10,000 |
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Karuna |
2,43,000 |
12,15,000 |
Land and Building |
2,52,000 |
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Liability for Workmen Compensation |
60,000 |
Plant |
3,30,000 |
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|
13,65,000 |
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13,65,000 |
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Working Notes:
WN1 Calculation of New share
Karuna is admitted for 1/5th share
Let the total share of the firm be 1
Remaining share =1-15=45
This remaining share will be shared among old partners in their old ratio i.e.
3 : 2
Kalpana's Share =4/5×3/5=12/25
Kanika's Share =4/5×2/5=8/25
New Ratio = 12 : 8 : 5
Calculation of Sacrificing Ratio
Sacrificing Ratio = Old Ratio – New Ratio
Kalpana=3/5-12/25=3/25
Kanika=2/5-8/25=2/25
Sacrificing Ratio = 3 : 2
WN2 Calculate of Karuna's Capital
Adjusted Capital of Kalpana = 6.49,200
Adjusted Capital of Kanika = 3,22,800
Total Adjusted Capital = 9,72,000 (6,49,200+3,22,800)
Karuna’s capital =9,72,000 ×1/5×5/4=2,43,000
Page No 5.112:
Question 93:
A and B
are partners sharing profits in the ratio of 3 : 2. They admit C as a
new partner from 1st April, 2021. They have decided to share future profits in
the ratio of 4 : 3 : 3. The Balance Sheet as at 31st March, 2021 is given
below:
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Liabilities |
` |
Assets |
` |
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A's Capital |
1,76,000 |
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Goodwill |
34,000 |
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B's Capital |
2,54,000 |
4,30,000 |
Land
and Building |
60,000 |
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Workmen
Compensation Reserve |
|
20,000 |
Investment (Market
value `45,000) |
50,000 |
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Investments
Fluctuation Reserve |
|
10,000 |
Debtors |
1,00,000 |
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Employee's
Provident Fund |
|
34,000 |
Less: Provision for
Doubtful Debts |
10,000 |
90,000 |
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C's
Loan |
3,00,000 |
Stock |
3,00,000 |
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Bank
Balance |
2,50,000 |
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Advertising
Suspense A/c |
10,000 |
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7,94,000 |
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7,94,000 |
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Terms of C's admission are as follows:
(i) C contributes proportionate capital and 60% of his share of
goodwill in cash.
(ii) Goodwill is to be valued at 2 years' purchase of super profit of last
three completed years. Profits for the years ended 31st March were:
2017 − ` 4,80,000; 2018 − ‹
` 9,30,000; 2021
− ` 13,80,000.
The normal profit is ` 5,30,000 with same amount of capital invested in similar
industry.
(iii) Land and Building was found undervalued by ` 1,00,000.
(iv) Stock was found overvalued by ‹ ` 31,000.
(v) Provision for Doubtful Debts is to be made equal to 5% of the debtors.
(vi) Claim on account of Workmen Compensation is ` 11,000.
Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet.
Answer:
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Revaluation Account |
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Dr. |
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Cr. |
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Particulars |
Amount ` |
Particulars |
Amount ` |
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Stock |
31,000 |
Land & Building |
1,00,000 |
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Profit transferred to: |
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Provision for Doubtful Debts |
5,000 |
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A’s Capital A/c |
44,400 |
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B’s Capital A/c |
29,600 |
74,000 |
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1,05,000 |
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1,05,000 |
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Partners’ Capital Accounts |
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Dr. |
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Cr. |
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Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
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Goodwill |
20,400 |
13,600 |
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Balance b/d |
1,76,000 |
2,54,000 |
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Advertisement Suspense A/c |
6,000 |
4,000 |
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Bank A/c |
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|
3,06,000 |
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Balance c/d |
3,62,400 |
3,51,600 |
3,06,000 |
Premium for Goodwill A/c |
96,000 |
48,000 |
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C’s Current A/c |
64,000 |
32,000 |
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Revaluation A/c |
44,400 |
29,600 |
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IFR |
3,000 |
2,000 |
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WCR |
5,400 |
3,600 |
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3,88,800 |
3,69,200 |
3,06,000 |
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3,88,800 |
3,69,200 |
3,06,000 |
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Bank Account |
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Dr. |
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Cr. |
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Particulars |
Amount ` |
Particulars |
Amount ` |
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Balance b/d |
2,50,000 |
Balance c/d |
7,00,000 |
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C’s Capital |
3,06,000 |
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Premium for Goodwill |
1,44,000 |
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|
7,00,000 |
|
7,00,000 |
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Balance Sheet as on 1st April, 2021 after C’s admission |
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|
Liabilities |
Amount ` |
Assets |
Amount ` |
||
|
Workmen Compensation Reserve |
11,000 |
Land & Building |
1,60,000 |
||
|
Employees Provident Fund |
34,000 |
Bank A/c |
7,00,000 |
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C ‘s Loan |
3,00,000 |
Investment |
45,000 |
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Capital |
|
Stock |
2,69,000 |
||
|
A |
3,62,400 |
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C ‘s Current A/c |
96,000 |
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|
B |
3,51,600 |
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Debtors |
1,00,000 |
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|
C |
3,06,000 |
10,20,000 |
Less : Provision for Doubtful Debts |
5,000 |
95,000 |
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||
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|
13,65,000 |
|
13,65,000 |
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Working Notes:
WN1: Calculation of Sacrifice or Gain
A :B=3:2 (Old Ratio)
A :B :C=4:3 :3 (New Ratio)S
acrificing (or Gaining) Ratio = Old Ratio - New Ratio
A's share=3/5−4/10=6−4/10=2/10
B's share=2/5−3/10=4−3/10=1/10
A:B=2:1
WN:2 Calculation of Goodwill
Goodwill=Super Profit×No. of Years' Purchase
=4,00,000×2= ` 8,00,000
C's share of Goodwill=8,00,000×3/10= ` 2,40,000
Goodwill brought in cash = 2,40,000×60/100= ` 1,44,000
Average Profit=Total Profits of past years givenNumber of Years =27,90,000/3= ` 9,30,000
Normal Profit=Capital Employed×Normal Rate of Return/100
= ` 5,30,000
Super Profit
=
Average Profit-Normal Profit
=9,30,000-5,30,000= ` 4,00,000
WN:3 Calculation of C’s Capital
Combined Capital A and B's Capital for 7/10th=3,62,400 + 3,51,600 = ` 7,14,000
So, C's Capital = 7,14,000×10/7×3/10= ` 3,06,000
Page No 5.110:
Question 94: On 31st March, 2021 the Balance Sheet of Ram and Shyam who share profits and losses in the ratio of 3:2 was as follows:
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BALANCE SHEET OF RAM AND SHYAM as at 31st March, 2021 |
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Liabilities |
` |
Assets |
` |
|
||
|
Creditors General Reserve Employees' Provident Fund |
70,000 25,000 55,000 |
Cash at Bank |
25,000 1,50,000 82,500 142,500 |
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Debtors Less: Provision for Doubtful debts |
1,62,500 12,500 |
|
||||
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Stock Machinery |
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|||||
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Capitals: Ram Shyam |
1,50,000 1,00,000 |
2,50,000 |
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|
4,00,000 |
|
4,00,000 |
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They decided to admit Mahesh on 1st April, 2021 for 1/5th share which Mahesh acquired wholly from Shyam on the following terms:
(i) Mahesh shall bring `25,000 as his share of premium for Goodwill.
(ii) A debtor whose dues of `7,500 were written off as bad debt paid `5,000 in settlement.
(iii) A claim of `12,500 on account of workmen's compensation was to be provided for.
(iv) Machinery were undervalued by `5,000. Stock was valued 10% more than its market value.
(v) Mahesh was to bring in capital equal to 20% of the combined capitals of Ram and Shyam after all adjustments.
Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the new firm.
Answer:
Revaluation A/c
|
|||
Particulars
|
`
|
Particulars
|
`
|
To Worker compensation Liabilities
To Stock
(82,500×10/110)
|
12,500
7,500
|
By Bad debts Recovered
By Machinery
By Loss Transferred to-
Ram’s Capital =6,000
Shyam’s Capital =4,000
|
5,000
5,000
10,000
|
|
|
20,000
|
|
20,000
|
|
Partners’ Capital Accounts |
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|
Dr. |
Cr. |
|||||||||
|
Particulars |
Ram |
Shyam |
Mahesh |
Particulars |
Ram |
Shyam |
Mahesh |
|||
|
To Revaluation A/c |
6,000 |
4,000 |
|
By Balance b/d |
1,50,000 |
1,00,000 |
|
|||
|
By Premium A/c |
|
25,000 |
||||||||
|
To Balance c/d |
1,59,000 |
1,31,000 |
By General Reserve |
15,000 |
10,000 |
|
||||
|
|
1,65,000 |
1,35,000 |
|
1,65,000 |
1,35,000 |
|||||
|
To Balance c/d |
1,59,000 |
1,31,000 |
58,000 |
Balance b/d |
1,59,000 |
1,31,000 |
|
|||
|
Bank a/c |
58,000 |
|||||||||
|
1,59,000 |
1,31,000 |
58,000 |
1,59,000 |
1,31,000 |
58,000 |
|||||
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|
Balance Sheet as on 1st April, 2021 |
|||||
|
Liabilities |
Amount ` |
Assets |
Amount ` |
||
|
Workmen Compensation Reserve |
12,500 |
Bank A/c |
1,13,000 |
||
|
Employees Provident Fund |
5,500 |
(25,000+25,000+58,000+5,000) |
|||
|
Creditors |
70,000 |
machinery |
1,47,500 |
||
|
Capital |
|
Stock |
75,000 |
||
|
Ram |
1,59,000 |
|
|||
|
Shyam |
1,31,000 |
|
Debtors |
1,62,500 |
|
|
Mahesh |
58,000 |
3,48,000 |
Less : Provision for Doubtful Debts |
12,500 |
1,50,000 |
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4,85,500 |
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4,85,500 |
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Working notes;
WN-1
Calculation of Old and sacrificing ratio
Old ratio of Ram and shyam= 3:2
New ratio of –
Ram=3/5
Shyam=2/5-1/5=2-1/5=1/5
Mahesh= 1/5
New ratio of Ram, shyam and Mahesh=3:1:1
Sacrificing ratio of –
Ram =3/5-3/5=3-3/5=0/5
Shyam=2/5-1/5=2-1/5=1/5
Sacrificing ratio of Ram and Shyam = 0:1
WN-2
Adjusted Capital of Ram and shyam= 1,59,000+1,31,000=2,90,000
Mahesh’s capital= 2,90,000×20/100=58,000
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