12th Standard English Medium Accountancy Subject Admission of a Partner Book Back 3 Mark Questions with Solution Part - II | QB365

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12th Standard English Medium Accountancy Subject Admission of a Partner Book Back 3 Mark Questions with Solution Part - II

Published on: 03/06/2021

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Std: 12th Standard - Accountancy

chapter: - Book back Questions

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Questions:

Generic 2

3 x 2 = 6

Arun, Babu and Charles are partners sharing profits and losses equally. They admit Durai into partnership for 1/4 share in future profits. The goodwill of the firm is valued at Rs. 36,000 and Durai brought cash for his share of goodwill. The existing partners withdraw half of the amount of their share of goodwill. Pass necessary journal entries on the assumption that the fluctuating capital method is followed.

Amudha and Bhuvana are partners who share profits and losses in the ratio of 5:3. Chithra joins the firm on 1st January, 2019 for 3/8 share of profits and brings in cash for her share of goodwill of Rs. 8,000. Pass necessary journal entry for adjusting goodwill on the assumption that the fluctuating capital method is followed and the partners withdraw the entire amount of their share of goodwill.

Rathna Kumar and Arockia Das are partners in a firm sharing profits and losses in the ratio of 3:2. Their balance sheet as on 31st March, 2017 is as follows:

Liabilities	Rs.	Rs.	Assets	Rs.
Capital accounts:			Buildings	30,000
Rathna Kumar	30,000		Plant	60,000
Arockia Das	50,000	80,000	Furniture	20,000
Profit and loss appropriation A/c		20,000	Debtors	10,000
General reserve		5,000	Stock	15,000
Workmen compensation fund		15,000	Cash at bank	15,000
Sundry creditors		30,000
		1,50,000		1,50,000

David was admitted into the partnership on 1.4.2017. Pass journal entry to distribute the accumulated profits and reserve on admission.

Generic 3

1 x 3 = 3

Rajesh and Ramesh are partners sharing profits in the ratio 3:2. Raman is admitted as a new partner and the new profit sharing ratio is decided as 5:3:2. The following revaluations are made. Pass journal entries and prepare revaluation account.
(a) The value of building is increased by Rs. 15,000.
(b) The value of the machinery is decreased by Rs. 4,000.
(c) Provision for doubtful debt is made for Rs. 1,000.

Generic 5

1 x 5 = 5

Sriram and Raj are partners sharing profits and losses in the ratio of 2:1. Nelson joins as a partner on 1st April 2017. The following adjustments are to be made:
(i) Increase the value of stock by Rs. 5,000
(ii) Bring into record investment of Rs. 7,000 which had not been recorded in the books of the firm.
(iii) Reduce the value of office equipment by Rs. 10,000
(iv) A provision would also be made for outstanding wages for Rs. 9,500.
Give journal entries and prepare revaluation account.

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Answers Key:

Generic 2

3 x 2 = 6

Durai’s share of goodwill = 36,000 × 1/4 = Rs. 9,000
As the sacrifice made by the existing partners is not mentioned, it is assumed that they sacrifice in their old profit sharing ratio 1:1:1. Therefore, sacrificing ratio is 1:1:1.

**Journal Entries**
Particulars		Debit Rs.	Credit Rs.
Bank A/c	Dr..	9,000
To Arun’s capital A/c			3,000
To Babu’s capital A/c			3,000
To Charles’s capital A/c (Cash brought for goodwill credited to old partners’ capital account in sacrificing ratio)			3,000
Arun’s capital A/c	Dr.	1,500
Babu’s capital A/c		1,500
Charles’s capital A/c		1,500
To Bank A/c (Cash withdrawn by the partners			4,500

As the sacrifice made by the existing partners is not mentioned, it is assumed that they sacrifice in their old profit sharing ratio 5:3. Therefore, sacrificing ratio is 5:3.

**Journal Entry**
Date	Particulars		Debit Rs.	Credit Rs.
2019		Dr..	8,000
January 1	To Amudha’s capital A/c (5/8)			5,000
	To Bhuvana’s capital A/c (3/8) (Cash brought for goodwill credited to Amudha and Bhuvana in sacrificing ratio)			3,000
	Amudha’s capital A/c	Dr.	5,000
	Bhuvana’s capital A/c	Dr.	3,000
	To Bank A/c (Amount withdrawn by the partners)			8,000

**Journal entry**
Date	Particulars		Debit Rs.	Credir Rs.
2017	Profit and loss appropriation A/c	Dr.	20,000
April 1	General reserve A/c	Dr.	5,000
	Workmen compensation fund A/c	Dr.	15,000
	To Rathna Kumar’s capital A/c (40,000 \(\times\) 3/5)			24,000
	To Arockia Das’s capital A/c (40,000 \(\times\) 2/5)			16,000
	(Accumulated profit and reserve transferred to old partners’ capital account in the old profit sharing ratio)

Generic 3

1 x 3 = 3

**Journal entries**
Particulars		Debit Rs.	Credit Rs.
Buildings A/c	Dr.	15,000
To Revaluation A/c (Appreciation in value of buildings recorded)			15,000
Revaluation A/c	Dr.	5,000
To Machinery A/c			4,000
To Provision for doubtful debts A/c (Decrease in assets recorded and provision made)			1,000
Revaluation A/c	Dr.	10,000
To Rajesh’s capital A/c			6,000
To Ramesh’s capital A/c (Profit on revaluation transferred)			4,000

**Dr. Revaluation Account Cr.**
Particulars	Rs.	Rs.	Particulars	Rs.
To Machinery A/c		4,000	By Buildings A/c	15,000
To Provision for doubtful debts A/c		1,000
To Profit on revaluation transferred to
Rajesh’s capital A/c (3/5)	6,000
Ramesh’s capital A/c (2/5)	4,000	10,000
		15,000		15,000

Generic 5

1 x 5 = 5

**Journal entries**
Date	Particulars		Debit Rs.	Credit Rs.
2017	Stock A/c	Dr.	5,000
April 1	Investment A/c	Dr.	7,000
	To Revaluation A/c (Increase in the value of stock and unrecorded investment accounted)			12,000
"	Revaluation A/c	Dr.	19,500
	To Office equipment A/c			10,000
	To Outstanding wages A/c (Reduction in the value of office equipment and provision of outstanding wages recorded)			9,500
"	Sriram’s capital A/c	Dr.	5,000
	Raj’s capital A/c	Dr.	2,500
	To Revaluation A/c (Loss on revaluation transferred)			7,500

**Dr. Revaluation Account Cr.**
Particulars	Rs.	Particulars	Rs.	Rs.
To Office equipment A/c	10,000	By Stock A/c		5,000
To Outstanding wages A/c	9,500	By Investment A/c		7,000
		By Loss on revaluation transferred to
		Sriram’s capital A/c (2/3)	5,000
		Raj’s capital A/c (1/3)	2,500	7,500
	19,500			19,500