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Accountancy · 2023 · 6 marks
Reconstitution of a Partnership Firm – Admission of a PartnerRevaluation of Assets and Reassessment of Liabilities6 markslong answer
CBSE 2023 · Region 1 · Set 1 · Q24
Yuv and Veer were partners in a firm sharing profits and losses in the ratio of 3: 1. Their Balance Sheet as on 31st March, 2022 was as under:…
Yuv and Veer were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$ : 1. Their Balance Sheet as on 31st March, $\displaystyle 2022$ was as under :
Balance Sheet of Yuv and Veer as at 31st March, $\displaystyle 2022$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | $\displaystyle 41,000$ | Plant and Machinery | $\displaystyle 60,000$ |
| General Reserve | $\displaystyle 80,000$ | Building | $\displaystyle 40,000$ |
| Outstanding Expenses | $\displaystyle 12,000$ | Investments | $\displaystyle 60,000$ |
| Capitals : | Stock | $\displaystyle 50,000$ | |
| Yuv $\displaystyle 79,000$ | Debtors $\displaystyle 38,000$ | ||
| Veer $\displaystyle 48,000$ | $\displaystyle 1,27,000$ | Less : Provision for Doubtful Debts $\displaystyle 4,000$ | $\displaystyle 34,000$ |
| Cash | $\displaystyle 16,000$ | ||
| $\displaystyle 2,60,000$ | $\displaystyle 2,60,000$ |
They decided to admit Yash in the firm on 1st April, $\displaystyle 2022$ for $\displaystyle 1$ share in profits on the following terms : $\displaystyle 4$ (i) Yash will bring in proportionate capital and ₹ $\displaystyle 4,000$ as his share of goodwill premium in cash. (ii) Investments were valued at ₹ $\displaystyle 68$,000. (iii) Plant and Machinery was to be depreciated by $\displaystyle 10$%. Prepare Revaluation Accounts and Partners ' Capital Accounts.
Reyansh, Aayushman and Sabhya were partners in a firm sharing profits and losses in the ratio of $\displaystyle 5$ : $\displaystyle 3$ : 2. Their Balance Sheet as at 31st March, $\displaystyle 2022$ was as under :
Balance Sheet of Reyansh, Aayushman and Sabhya as at 31st March, $\displaystyle 2022$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Sundry Creditors | $\displaystyle 2,20,000$ | Cash | $\displaystyle 1,60,000$ |
| General Reserve | $\displaystyle 1,20,000$ | Debtors $\displaystyle 1,80,000$ | |
| Capitals : | Less : Provision for Doubtful Debts $\displaystyle 20,000$ | $\displaystyle 1,60,000$ | |
| Reyansh $\displaystyle 6,00,000$ | Stock | $\displaystyle 2,00,000$ | |
| Aayushman $\displaystyle 5,00,000$ | Machinery | $\displaystyle 6,00,000$ | |
| Sabhya $\displaystyle 3,00,000$ | $\displaystyle 14,00,000$ | Building | $\displaystyle 4,00,000$ |
| Patents | $\displaystyle 1,20,000$ | ||
| Profit and Loss A/c | $\displaystyle 1,00,000$ | ||
| $\displaystyle 17,40,000$ | $\displaystyle 17,40,000$ |
Reyansh retired on the above date and it was agreed that : (i) Goodwill of the firm on Reyansh's retiree nt was valued at ₹ $\displaystyle 12,00$,000. (ii) Aayushman and Sabhya will share future profits in the ratio of $\displaystyle 2$ : 3. (iii) An unrecorded creditor of ₹ $\displaystyle 40,000$ will be taken into account. (iv) Debtors of ₹ $\displaystyle 30,000$ will be written off as bad debts. (v) Amount payable to Reyansh was to be transferred to his loan amount. Pass necessary journal entries for the above transactions in the books of the firm.
Marking-scheme solution
(a)
Dr. Revaluation A/c Cr.
Particulars (₹) Particulars (₹)
To Plant & Machinery A/c $\displaystyle 6,000$ By Investment A/c $\displaystyle 8,000$
To Profit transferred to
partners’ capital A/cs :
Yuv $\displaystyle 1,500$
Veer $\displaystyle 500$ $\displaystyle 2,000$
$\displaystyle 8,000$ $\displaystyle 8,000$
Dr. Partners’ Capital A/cs Cr.
Particulars Yuv Veer Yash Particulars Yuv Veer Yash
(₹) (₹)
(₹) (₹) (₹) (₹)
To Balance c/d $\displaystyle 1,43,500$ $\displaystyle 69,500$ $\displaystyle 71,000$ By Balance b/d $\displaystyle 79,000$ $\displaystyle 48,000$
By General
$\displaystyle 60,000$ $\displaystyle 20,000$
Reserve A/c
By Premium for
goodwill A/c $\displaystyle 3,000$ $\displaystyle 1,000$
By Revaluation
A/c $\displaystyle 1,500$ $\displaystyle 500$
By Cash A/c /
$\displaystyle 71,000$
Bank A/c
$\displaystyle 1,43,500$ $\displaystyle 69,500$ $\displaystyle 71,000$ $\displaystyle 1,43,500$ $\displaystyle 69,500$ $\displaystyle 71,000$
Workings:
Adjusted capital of partners ₹
Yuv $\displaystyle 143500$
Veer $\displaystyle 69500$
Total $\displaystyle 2,13,000$
Capital of the new firm $\displaystyle 213000$ x $\displaystyle 4$/$\displaystyle 3$= ₹$\displaystyle 2,84,000$
Capital brought in by Yash = $\displaystyle 2,84,000$ x1/$\displaystyle 4$ = ₹$\displaystyle 71,000$
Q. (b) Reyansh, Aayushman and Sabhya ………….
Ans. (b)
Books of Reyansh, Aayushman and Sabhya
Journal
Debit Credit
Date Particulars L.F
Amount Amount
(₹) (₹)
$\displaystyle 2022$ Aayushman’s Capital A/c Dr. $\displaystyle 1,20,000$
March $\displaystyle 31$ Sabhya’s Capital A/c Dr. $\displaystyle 4,80,000$
$\displaystyle 6,00,000$
To Reyansh’s Capital A/c
(Adjustment for goodwill in gaining ratio without
opening goodwill account)
,, General Reserve A/c Dr. $\displaystyle 1,20,000$
To Reyansh’s Capital A/c $\displaystyle 60,000$
To Aayushman’s Capital A/c $\displaystyle 36,000$
To Sabhya’s Capital A/c $\displaystyle 24,000$
(General reserve distributed among partners)
,,
Reyansh’s Capital A/c Dr. $\displaystyle 50,000$
Aayushman’s Capital A/c Dr. $\displaystyle 30,000$
Sabhya’s Capital A/c Dr. $\displaystyle 20,000$
To Profit and Loss A/c $\displaystyle 1,00,000$
(Accumulated losses shared by partners in old ratio)
,, Revaluation A/c Dr. $\displaystyle 40,000$
To Sundry Creditors A/c $\displaystyle 40,000$
(Unrecorded creditors taken into account)
,, Bad debts A/c Dr. $\displaystyle 30,000$
To Debtors A/c $\displaystyle 30,000$
(₹$\displaystyle 30,000$ written off as bad debts)
,, Provision for doubtful debts A/c Dr. $\displaystyle 20,000$
Revaluation A/c Dr. $\displaystyle 10,000$
To Bad debts A/c $\displaystyle 30,000$
(Bad debts transferred to provision for doubtful debts
and revaluation account)
,, Reyansh’s Capital A/c Dr. $\displaystyle 25,000$
Aayushman’s Capital A/c Dr. $\displaystyle 15,000$
Sabhya’s Capital A/c Dr. $\displaystyle 10,000$
To Revaluation A/c $\displaystyle 50,000$
(Loss on revaluation transferred to partners’ capital
accounts in old ratio)
,, Reyansh’s Capital A/c Dr. $\displaystyle 11,85,000$
To Reyansh’s Loan A/c $\displaystyle 11,85,000$
(Amount due to Reyansh transferred to his loan
account)
Workings:
Calculation of gaining ratio
Share gained = New share – Old Share
Aayushman Sabhya
$\displaystyle 2$/$\displaystyle 5$ – $\displaystyle 3$/$\displaystyle 10$ $\displaystyle 3$/$\displaystyle 5$ – $\displaystyle 2$/$\displaystyle 10$
= $\displaystyle 1$/$\displaystyle 10$ = $\displaystyle 4$/$\displaystyle 10$
Gaining ratio is $\displaystyle 1$:$\displaystyle 4$
Amount to be transferred to Reyansh’s loan account
$\displaystyle 6,00,000$+$\displaystyle 6,00,000$+$\displaystyle 60,000$ – $\displaystyle 50,000$ – $\displaystyle 25,000$
= ₹$\displaystyle 11,85,000$
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CBSE Class 12 Accountancy past-paper question from the 2023 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.