Page No 5.107:
Question 91:
Mohan and Sohan are in partnership sharing profits in the proportion of 3/5th and 2/5th respectively. Their Balance Sheet as at 31st March, 2019 was:
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Liabilities |
` |
Assets |
` |
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Mohan's
Capital |
2,000 |
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Plant |
650 |
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Sohan's Capital |
1,000 |
3,000 |
Cash |
650 |
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Creditors |
|
400 |
Debtors |
|
1,000 |
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Less: Provision for Doubtful
Debts |
400 |
600 |
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Stock |
1,500 |
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3,400 |
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3,400 |
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They admit Rohan to a 1/3rd share upon the terms that
he is to pay into the business ` 1,000 as Goodwill and sufficient Capital to give him a
1/3rd share of the total capital of the new firm. It was agreed that the
Provision for Doubtful Debts be reduced to ` 100 and the Stock be revalued at ` 2,000 and that the Plant be reduced to ` 500.
You are required to record the above in the Ledger of the firm and show Balance
Sheet of the new partnership.
Answer:
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Revaluation Account |
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Dr. |
|
Cr. |
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|
Particulars |
Amount ` |
Particulars |
Amount ` |
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Plant (650 – 500) |
150 |
Reserve for Doubtful Debts |
300 |
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Profit transferred to |
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(400 – 100) |
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Mohan Capital |
390 |
Stock |
500 |
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Sohan Capital |
260 |
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|
800 |
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800 |
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Partners’ Capital Accounts |
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Dr. |
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Cr. |
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Particulars |
Mohan |
Sohan |
Rohan |
Particulars |
Mohan |
Sohan |
Rohan |
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Balance b/d |
2,000 |
1,000 |
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Balance c/d |
2,990 |
1,660 |
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Revaluation |
390 |
260 |
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(after adjustments) |
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Premium for Goodwill |
600 |
400 |
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|
2,990 |
1,660 |
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2,990 |
1,660 |
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Balance b/d |
2,990 |
1,660 |
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Balance c/d |
2,990 |
1,660 |
2,325 |
Cash |
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|
2,325 |
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2,990 |
1,660 |
2,325 |
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2,990 |
1,660 |
2,325 |
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Balance Sheet as on March 31, 2019 after Rohan’s admission |
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Liabilities |
Amount ` |
Assets |
Amount ` |
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Capital A/cs: |
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Cash |
3,975 |
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Mohan |
2,990 |
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Debtors |
1,000 |
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Sohan |
1,660 |
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Less: Reserve for D. Debts |
100 |
900 |
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Rohan |
2,325 |
6,975 |
Stock |
2,000 |
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Creditors |
400 |
Plant |
500 |
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7,375 |
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7,375 |
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Working Notes
WN1
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A |
B |
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OLD RATION |
3 : |
2 |
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SACRIFICE RATIO |
3 : |
2 |
WN2
Distribution of Premium for Goodwill
A will get =1,000×3/5=600
B will get =1,000×2/5=400
WN3
Distribution of Revaluation Profit
Mohan‘s share
=650×3/5=390
Sohan’s
share=650×2/5=260
WN4
Calculation Rohan’s Capital
Combined Capital of Mohan and Sohan after all
adjustments = 2,990 + 1,660 = ` 4,650
Total Capital of the firm on the basis of combined capital of Mohan and Sohan = 4,650×3/2=6,975
Rohan’s Capital =6,975×1/3=2,325
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 |
650 |
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Rohan’s Capital |
2,325 |
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Premium for Goodwill |
1,000 |
Balance c/d |
3,975 |
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3,975 |
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3,975 |
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Page No 5.108:
Question 92:
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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To workers’ compensation Liabilities To Stock |
40,000 16,000 |
By loss transferred to ; Rohit×3/5=33,600 Leena×2/5=22,400 |
56,000 |
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56,000 |
56,000 |
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Partners’ Capital Accounts |
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Dr. |
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Cr. |
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Particulars |
Leena |
Rohit |
Manoj |
Particulars |
Leena |
Rohit |
Manoj |
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To Revaluation a/c |
32,600 |
22,400 |
By Balance b/d |
160,000 |
140,000 |
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To Balance c/d |
1,93,400 |
1,75,600 |
By Premium a/c |
40,000 |
40,000 |
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By General reserve A/c |
27,000 |
18,000 |
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2,27,000 |
1,98,000 |
2,27,000 |
1,98,000 |
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To Balance c/d |
1,61,600 |
1,02,400 |
92,250 |
By Balance b/d |
1,93,400 |
1,75,600 |
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By Cash A/c |
92,250 |
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1,61,600 |
1,02,400 |
92,250 |
1,61,600 |
1,02,400 |
92,250 |
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Balance Sheet as on March 31,
2019 after Leander’s admission |
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Liabilities |
Amount ` |
Assets |
Amount ` |
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Creditors Bills payables Workers’ compensation liabilities |
80,000 38,000 40,000 |
Cash (42,000+80,000+92,250) Debtors Less; prov. For doubtful debts |
1,32,000 7,000 |
2,14,250 1,25,000 |
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Capital a/c; Leena 1,61,600 Rohit 1,02,400 Manoj 92,250 |
4,61,250 |
Stock Plant and machinery |
1,30,000 1,50,000 |
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6,19,250 |
6,19,250 |
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1 |
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Working Notes;
WN 1:
Calculation of old ratio and sacrificing ratio
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Leena |
Rohit |
Manoj |
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OLD RATION |
3 : |
2 |
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NEW RATIO |
5 : |
3 : |
2 |
Sacrificing ratio= Old ratio – New Ratio
Leena =3/5-5/10=6-5/10=1/10
Rohit =2/5-3/10=4-3/10=1/10
Sacrificing ratio of Leena : Rohit=1:1
WN 2:
Calculation of Manoj’s
capital
Capital of Leena and Rohit
= 1,93,400+1,75,600=3,69,000
Share of Leena and Rohit = 8/10
Hence Capital of Leena ,Rohit and Manoj=3,69,000×10/8=4,61,250
Accordingly capital of Manoj=4,61,250-3,69,000=92,250
Page No 5.108:
Question 93:
Pradeep and Dhanraj were partners in a firm sharing profits in the ratio of 3 : 1. Their Balance Sheet on 31st March, 2019 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 ` |
|
Patents |
1,000 |
Provision for Doubtful Debts |
2,000 |
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Profit on transferred to |
|
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, 2019 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 |
|
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
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Cash Account |
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Dr. |
|
Cr. |
|
|
Particulars |
Amount ` |
Particulars |
Amount ` |
|
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 5.109:
Question 94:
Following is the Balance Sheet of X and Y as at 31st March, 2019. Z is admitted as a partner on that date when the position of X and Y was:
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Liabilities |
` |
Assets |
` |
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X's Capital |
10,000 |
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Cash
in Hand
|
9,000 |
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Y's Capital |
8,000 |
18,000 |
Debtors |
11,000 |
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Creditors |
|
12,000 |
Stock |
|
12,000 |
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General
Reserve |
|
16,000 |
Building |
|
8,000 |
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Workmen
Compensation Reserve |
|
4,000 |
Machinery |
|
10,000 |
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50,000 |
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50,000 |
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X and Y share profits in the proportion of 3
: 2. The following terms of admission are agreed upon:
(a) Revaluation of assets: Building
` 18,000; Stock ` 16,000.
(b) The liability on Workmen Compensation Reserve is determined at ` 2,000.
(c) Z brought in as his share of goodwill
` 10,000 in cash.
(d) Z was to bring in further cash as would make his capital equal to 20% of
the combined capital of X and Y after above revaluation and
adjustments are carried out.
(e) The further profit-sharing proportions were: X−2/5th, Y−2/5th
and Z−1/5th.
Prepare new Balance Sheet of the firm and Capital Accounts of the Partners.
Answer:
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Revaluation Account |
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|
Dr. |
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|
Cr. |
|
Particulars |
Amount ` |
Particulars |
Amount ` |
|
Profit transferred to |
|
Building (18,000 – 8,000) |
10,000 |
|
X Capital |
8,400 |
Stock (16,000 – 12,000) |
4,000 |
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Y Capital |
5,600 |
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|
14,000 |
|
14,000 |
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Partners’ Capital Accounts |
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Dr. |
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Cr. |
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Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
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Balance b/d |
10,000 |
8,000 |
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General Reserve |
9,600 |
6,400 |
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Workmen’s Compensation Fund |
1,200 |
800 |
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Balance c/d |
39,200 |
20,800 |
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Revaluation (Profit) |
8,400 |
5,600 |
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|
Premium for Goodwill |
10,000 |
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|
39,200 |
20,800 |
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|
39,200 |
20,800 |
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Balance b/d |
39,200 |
20,800 |
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Cash |
|
|
12,000 |
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Balance c/d |
39,200 |
20,800 |
12,000 |
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|
39,200 |
20,800 |
12,000 |
|
39,200 |
20,800 |
12,000 |
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Balance Sheet as on March 31, 2019 after Z’s admission |
||||
|
Liabilities |
Amount ` |
Assets |
Amount ` |
|
|
Capital A/cs: |
|
Cash in Hand |
31,000 |
|
|
X |
39,200 |
|
Debtors |
11,000 |
|
Y |
20,800 |
|
Stock |
16,000 |
|
Z |
12,000 |
72,000 |
Building |
18,000 |
|
Creditors |
12,000 |
Machinery |
10,000 |
|
|
Outstanding Workmen’s Compensation Claim |
2,000 |
|
|
|
|
|
|
|
|
|
|
|
86,000 |
|
86,000 |
|
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|
|
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Working Notes
WN1: Sacrificing Ratio
|
|
X |
Y |
Z |
|
OLD RATION |
3 : |
2 : |
|
|
NEW RATIO |
2 : |
2 : |
1 |
Sacrificing Ratio =Old ratio- new ratio
X=
3/5-2/5/=1/5
Y=2/5-2/5/=0
Only
X is sacrificing 1/5 portion of profit in favour of
Z. Therefore, amount of Premium for Goodwill will be taken by X only.
WN2: Treatment of Workmen Compensation Fund
|
Particulars |
L.F. |
Debit Amount |
Credit Amount |
|
|
Workmen’s Compensation Fund A/c |
Dr. |
|
4,000 |
|
|
To Outstanding Workmen’s Compensation Claim A/c |
|
|
|
2,000 |
|
To X’s Capital A/c |
Dr. |
|
|
1,200 |
|
To Y’s Capital A/c |
|
|
800 |
|
|
(Outstanding Workmen’s Compensation charged from the fund and remaining fund transferred to partner’s capital in their old ratio) |
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|
WN3: Calculation of Z’s Capital
Combined Capital of X and Y after all adjustments = 39,200 + 20,800 = ` 60,000
Z’s Capital =60,000×20/100=12,000
WN4: Calculation of Cash Balance
|
Cash Account |
|||
|
Dr. |
|
Cr. |
|
|
Particulars |
Amount ` |
Particulars |
Amount ` |
|
Balance b/d |
9,000 |
|
|
|
Z’s Capital |
12,000 |
|
|
|
Premium for Goodwill |
10,000 |
Balance c/d |
31,000 |
|
|
31,000 |
|
31,000 |
|
|
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|
Page No 5.109:
Question 95:
Kalpana and Kanika were partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2019, 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, 2019 was as follows:
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BALANCE SHEET OF KALPANA
AND KANIKA as on 1st April, 2019 |
||||||
|
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 |
|||
|
|
|
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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.
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, 2019 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