12th | Ts grewal 2021-2022 Question 91 to 94 | Admission of a partner

 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:

 

Liabilities

   `

Assets

   `

Creditors

30,000

Cash

4,000

Bills Payable

1,000

Debtors

50,000

 

Reserve Fund

         

16,000

Less: Provision for Doubtful Debts

5,000

45,000

Outstanding Salary

 

3,000

Stock

30,000

Capital A/cs:

 

 

Bills Receivable

10,000

 Pradeep

60,000

 

Patents

1,000

 Dhanraj               

20,000

80,000

Machinery  

40,000

 

 

 

 

 

 

 

 

 

1,30,000

 

1,30,000

 

 

 

 


  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:

Revaluation Account

Dr.

 

 

Cr.

Particulars

Amount

 `

Particulars

Amount

 `

Patents

1,000

Provision for Doubtful Debts

2,000

Profit on transferred to      

 

Typewriter

2,400

   Pradeep Capital

2,550

 

 

   Dhanraj Capital

850

 

 

 

4,400

 

4,400

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

Pradeep

Dhanraj

Leander

Particulars

Pradeep

Dhanraj

Leander

 

 

 

 

Balance b/d

60,000

20,000

 

Balance c/d

90,550

24,850

 

Reserve Fund

12,000

4,000

 

(after adjustments)

 

 

 

Revaluation

2,550

850

 

 

 

 

 

Premium for Goodwill

16,000

 

 

 

90,550

24,850

 

 

90,550

24,850

 

 

 

 

 

Balance c/d

90,550

24,850

 

 

 

 

 

Cash

 

 

69,240

Balance c/d

90,550

24,850

69,240

 

 

 

 

 

90,550

24,850

69,240

 

90,550

24,850

69,240

 

 

 

 

 

 

 

 

 

Balance Sheet

as on March 31, 2021 after Leander’s admission

Liabilities

Amount

 `

Assets

Amount

 `

Creditors

30,000

Debtors

50,000

 

Bills Receivable

1,000

Less: Prov. for D. Debts

3,000

47,000

Outstanding Salary                    

3,000

Stock

30,000

Capital A/cs:

 

Bills Receivable

10,000

Pradeep

90,550

 

Machinery

40,000

Dhanraj

24,850

 

Typewriter

2,400

Leander

69,240

1,84,640

Cash

89,240

 

 

 

 

 

 

2,18,640

 

2,18,640

 

 

 

 


Working Notes

WN1

 

Pradeep

Dhanraj

Leander

OLD RATION

3  :

1

 

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

Cash Account

Dr.

 

Cr.

Particulars

Amount

 `

Particulars

Amount

 `

Balance b/d

4,000

 

 

Leander’s Capital

69,240

 

 

Premium for Goodwill

16,000

Balance c/d

89,240

 

 

 

 

 

89,240

 

89,240

 

 

 

 

 



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:

 

BALANCE SHEET OF KALPANA AND KANIKA as on 1st April, 2021

Liabilities

   `

Assets

   `

Capital A/cs:

 

Land and Building               

2,10,000

Kalpana

4,80,000

 

Plant

2,70,000

Kanika

2,10,000

 6,90,000

Stock

   2,10,000

General Reserve

 

60,000

Debtors

 

  1,32,000

 

Workmen's Compensation Fund

 

1,00,000

 Less: Provision

12,000

1,20,000

Creditors

90,000

Cash

26,000

 

 

 

1,30,000

 

 

 

 

 

9,40,000

 

9,40,000

 

 

 

 


  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:

Revaluation Account

Dr.

 

Cr.

Particulars

Amount

 `

Particulars

Amount

 `

Revaluation Profit

 

Land and Building A/c

42,000

Kalpana’s Capital A/c

61,200

 

Plant A/c

60,000

Kanika’s Capital A/c

40,800

1,02,000

 

 

 

 

 

 

 

1,02,000

 

1,02,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

Kalpana

Kanika

Karuna

Particulars

Kalpana

Kanika

Karuna

 

 

 

 

Balance b/d

4,80,000

2,10,000

 

 

 

 

 

Cash

 

 

2,43,000

Balance c/d  

6,49,200

3,22,800

2,43,000

General Reserve

36,000

24,000

 

 

 

 

 

Workmen Compensation Fund

24,000

16,000

 

 

 

 

 

Revaluation A/c

61,200

40,800

 

 

 

 

 

Premium for Goodwill

48,000

32,000

 

 

 

 

 

 

 

 

 

 

6,49,200

3,22,800

2,43,000

 

6,49,200

3,22,800

2,43,000

 

 

 

 

 

 

 

 

 

Balance Sheet

as on April 01, 2021 after Karuna’s admission

Liabilities

Amount

 `

Assets

Amount

 `

Creditors

90,000

Cash in Hand

4,53,000

Capitals:

 

Debtors

1,32,000

 

  Kalpana

6,49,200

 

  Less: Provision for debtors

12,000

1,20,000

  Kanika

3,22,800

 

Stock

2,10,000

  Karuna

2,43,000

12,15,000

Land and Building

2,52,000

Liability for Workmen Compensation

60,000

Plant

3,30,000

 

13,65,000

 

13,65,000

 

 

 

 


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:

 

Liabilities

   `

Assets

   `

A's Capital

1,76,000

 

Goodwill

34,000

B's Capital

     2,54,000

 4,30,000

Land and Building

   60,000

Workmen Compensation Reserve

 

20,000

Investment

(Market value  `45,000)

50,000

Investments Fluctuation Reserve 

 

10,000

Debtors

1,00,000

 

Employee's Provident Fund

 

34,000

Less: Provision for Doubtful Debts

10,000

90,000

 C's Loan

3,00,000

Stock

3,00,000

 

 

Bank Balance

2,50,000

 

 

Advertising Suspense A/c

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

7,94,000

 

7,94,000

 

 

 

 


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:

Revaluation Account

Dr.

 

Cr.

Particulars

Amount

 `

Particulars

Amount

 `

 

 

 

 

Stock

31,000

Land & Building

1,00,000

Profit transferred to:

 

Provision for Doubtful Debts

5,000

A’s Capital A/c

44,400

 

 

 

B’s Capital A/c

29,600

74,000

 

 

 

 

 

 

 

1,05,000

 

1,05,000

 

 

 

 

 

 

 

 

 

 

 

                    

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

A

B

C

Particulars

A

B

C

Goodwill

20,400

13,600

 

Balance b/d

1,76,000

2,54,000

 

Advertisement Suspense A/c

6,000

4,000

 

Bank A/c

 

 

3,06,000

Balance c/d

3,62,400

3,51,600

3,06,000

Premium for Goodwill A/c

96,000

48,000

 

 

 

 

 

C’s Current A/c

64,000

32,000

 

 

 

 

 

Revaluation A/c

44,400

29,600

 

 

 

 

 

IFR

3,000

2,000

 

 

 

 

 

WCR

5,400

3,600

 

 

 

 

 

 

 

 

 

 

3,88,800

3,69,200

3,06,000

 

3,88,800

3,69,200

3,06,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank Account

Dr.

 

Cr.

Particulars

Amount

 `

Particulars

Amount

 `

Balance b/d

2,50,000

Balance c/d

7,00,000

C’s Capital

3,06,000

 

 

Premium for Goodwill

1,44,000

 

 

 

7,00,000

 

7,00,000

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet

as on 1st April, 2021 after C’s admission

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

C ‘s Loan

3,00,000

Investment

45,000

Capital

 

Stock

2,69,000

A

3,62,400

 

C ‘s Current A/c

96,000

B

3,51,600

 

Debtors

1,00,000

 

C

3,06,000

10,20,000

Less : Provision for Doubtful Debts

5,000

95,000

 

 

 

 

 

13,65,000

 

13,65,000

 

 

 

 

 

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:

BALANCE SHEET OF RAM AND SHYAM as at 31st March, 2021

 

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

 

Debtors

Less: Provision for Doubtful debts

1,62,500

12,500

 

Stock

Machinery

 

Capitals:

Ram

Shyam

 

1,50,000

1,00,000

 

 

2,50,000

 

 

4,00,000

 

4,00,000

 

 

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

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

 

 

 

 

 

 

 

 

 

 

 

  

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

 

 

 

 

 

4,85,500

 

4,85,500

 

 

 

 

 

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