Volume-1 | Chapter-5 | Question: 91 to 95 | Admission Of A Partner | Ts grewal solution 2020-21 | Class-12th

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:

 

Liabilities

   `

Assets

   `

Mohan's Capital

2,000

 

Plant

650

Sohan's Capital

     1,000

 3,000

Cash

   650

Creditors

 

400

Debtors

  

  1,000

 

 

 

 

Less: Provision for Doubtful Debts

400

600

 

 

Stock

1,500

 

 

 

 

 

3,400

 

3,400

 

 

 

 


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:

Revaluation Account

Dr.

 

Cr.

Particulars

Amount

 `

Particulars

Amount

 `

Plant (650 – 500)

150

Reserve for Doubtful Debts

300

Profit transferred to

 

(400 – 100)

 

Mohan Capital

390

Stock

500

Sohan Capital

260

 

 

 

800

 

800

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

Mohan

Sohan

Rohan

Particulars

Mohan

Sohan

Rohan

 

 

 

 

Balance b/d

2,000

1,000

 

Balance c/d

2,990

1,660

 

Revaluation

390

260

 

(after adjustments)

 

 

 

Premium for Goodwill

600

400

 

 

2,990

1,660

 

 

2,990

1,660

 

 

 

 

 

Balance b/d

2,990

1,660

 

Balance c/d

2,990

1,660

2,325

Cash

 

 

2,325

 

2,990

1,660

2,325

 

2,990

1,660

2,325

 

 

 

 

 

 

 

 

 

Balance Sheet

as on March 31, 2019 after Rohan’s admission

Liabilities

Amount

 `

Assets

Amount

 `

Capital A/cs:                             

 

Cash

3,975

Mohan

2,990

 

Debtors

1,000

 

Sohan

1,660

 

Less: Reserve for D. Debts

100

900

Rohan

2,325

6,975

Stock

2,000

Creditors

400

Plant

500

 

 

 

 

 

7,375

 

7,375

 

 

 

 


Working Notes

WN1

 

A

B

OLD RATION

3  :

2 

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

Cash Account

Dr.

 

 

Cr.

Particulars

Amount

 `

Particulars

Amount

 `

Balance b/d

650

 

 

Rohan’s Capital

2,325

 

 

Premium for Goodwill

1,000

Balance c/d

3,975

 

3,975

 

3,975

 

 

 

 



Page No 5.108:

Question 92:



Answer:

Revaluation Account

Dr.

 

 

Cr.

Particulars

Amount

 `

Particulars

Amount

 `

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

56,000

56,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

Leena

Rohit

Manoj

Particulars

Leena

Rohit

Manoj

To Revaluation a/c

32,600

22,400

By Balance b/d

160,000

140,000

To Balance c/d

1,93,400

1,75,600

By Premium a/c

40,000

40,000

By General reserve A/c

27,000

18,000

2,27,000

1,98,000

2,27,000

1,98,000

To Balance c/d

1,61,600

1,02,400

92,250

By Balance b/d

1,93,400

1,75,600

By Cash A/c

92,250

1,61,600

1,02,400

92,250

1,61,600

1,02,400

92,250

 

 

 

 

 

 

 

 

 

Balance Sheet

as on March 31, 2019 after Leander’s admission

Liabilities

Amount

 `

Assets

Amount

 `

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

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

6,19,250

6,19,250

1


Working Notes;

WN 1:
Calculation of old ratio and sacrificing ratio

 

Leena

Rohit

Manoj

OLD RATION

3  :

2

 

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:

 

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, 2019 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 5.109:

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:

 

Liabilities

   `

Assets

   `

X's Capital

10,000

 

Cash in Hand                            

9,000

Y's Capital

8,000

 18,000

Debtors

   11,000

Creditors

 

12,000

Stock

 

12,000

General Reserve

 

16,000

Building

 

8,000

Workmen Compensation Reserve

 

4,000

Machinery

 

10,000

 

 

 

 

 

50,000

 

50,000

 

 

 

 


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:

Revaluation Account

Dr.

 

 

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

   Y Capital

5,600

 

 

 

14,000

 

14,000

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

X

Y

Z

Particulars

X

Y

Z

 

 

 

 

Balance b/d

10,000

8,000

 

 

 

 

 

General Reserve

9,600

6,400

 

 

 

 

 

Workmen’s Compensation Fund

1,200

800

 

Balance c/d

39,200

20,800

 

Revaluation (Profit)

8,400

5,600

 

 

 

 

 

Premium for Goodwill

10,000

 

 

 

39,200

20,800

 

 

39,200

20,800

 

 

 

 

 

Balance b/d

39,200

20,800

 

 

 

 

 

Cash

 

 

12,000

Balance c/d

39,200

20,800

12,000

 

 

 

 

 

39,200

20,800

12,000

 

39,200

20,800

12,000

 

 

 

 

 

 

 

 

 

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

 

 

 

 


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)

 

 

 

 

 

 

 


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

 

 

 

 



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:

 

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

 

 

 

 


  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


Click on Below link for more questions Of Volume-1 | 
Chapter-5: Admission Of A Partner 2020

From Question No. 1 to 5

From Question No. 6 to 10

From Question No. 11 to 15

From Question No. 16 to 20

From Question No. 21 to 25

From Question No. 26 to 30

Jump to chapter list of solution-2020-21
Jump to chapter list of solution-2019-20