T. S. Grewal Solutions for Class 12-commerce Accountancy CBSE Chapter 5: Admission of a Partner

Admission of a Partner Exercise 5.85

Solution Ex. 1

A is to be provided 1/5^th share of Profits

Assuming combined share of profit for all partners after A's admission be = 1

Accordingly, combined share of X, Y and Z after A's admission = 1 - A's share

Solution Ex. 2

Solution Ex. 3

Solution Ex. 4

Profit sharing Ratio of A, B and C = 3:2:1

Solution Ex. 5

Old Ratio between Bharti and Astha = 3:2

Solution Ex. 6

Admission of a Partner Exercise 5.86

Solution Ex. 7

Solution Ex. 8

Solution Ex. 9

Admission of a Partner Exercise 5.87

Solution Ex. 10

Solution Ex. 11

Solution Ex. 12

Solution Ex. 13

Solution Ex. 14

Solution Ex. 15

Solution Ex. 16

Calculation of New Profit Sharing Ratio

Solution Ex. 17

Solution Ex. 18

Old Ratio between P and Q = 3:2

Solution Ex. 19

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	A's Capital A/c	Dr.		10,000
	B's Capital A/c	Dr.		5,000
	---------To Goodwill A/c				15,000
	(Being goodwill written-off between A and B in old ratio of 2:1)

Note:-

The amount brought in by C as Goodwill will not be recorded in the books of the firm as he paid to A and B privately in the old ratio.

Solution Ex. 20

Solution Ex. 21

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		21,000
	-----To Premium for Goodwill A/c				21,000
	(Being premium for goodwill brought in by C )
	Premium for Goodwill A/c	Dr.		21,000
	-----To A's Capital A/c				9,000
	-----To B's Capital A/c				12,000
	(Being premium for Goodwill brought in by C distributed between A and B in sacrificing ratio i.e. 3 : 4)

Solution Ex. 22

(a)

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		2,000
	-----To Premium for Goodwill A/c				2,000
	(Being premium for goodwill brought in by D)
	Premium for Goodwill A/c	Dr.		2,000
	-----To B's Capital A/c				1,200
	-----To C's Capital A/c				800
	(Being premium for goodwill distributed between B and C in sacrificing ratio i.e. 3:2)

Working Note:

(b)

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		2,100
	-----To Premium for Goodwill A/c				2,100
	(Being premium for goodwill brought by D in cash)
	Premium for Goodwill A/c	Dr.		2,100
	-----To B's Capital A/c				1,400
	-----To C's Capital A/c				700
	(Being premium for goodwill distributed between B and C in sacrificing ratio i.e. 2:1)

Working Note:

1.

Solution Ex. 23

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		15,000
	-----To Premium for Goodwill A/c				15,000
	(Being D brought his share of Goodwill in cash)
	Premium for Goodwill A/c	Dr.		15,000
	-----To B's Capital A/c				15,000
	(Being premium for goodwill transferred to B's Capital)
	C's Capital A/c	Dr.		3,750
	-----To B's Capital A/c				3,750
	(Being goodwill charged from C's Capital Account due to his gain in profit sharing)

Working Notes:

1.

Solution Ex. 24

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		25,000
	----To Premium for Goodwill A/c				25,000
	( Being R brought his share of Goodwill in cash)
	Premium for Goodwill A/c	Dr.		25,000
	-----To M's Capital A/c				12,500
	-----To J's Capital A/c				12,500
	(Being C's share of Goodwill distributed in M and J in their sacrificing Ratio)

Working Notes:

1.

Solution Ex. 25

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		52,000
	-----To C's Capital A/c				40,000
	-----To Premium for Goodwill A/c				12,000
	(Being capital and share of goodwill brought in by C in cash)
	Premium for Goodwill A/c	Dr.		12,000
	-----To A's Capital A/c				6,000
	-----To, B's Capital A/c				6,000
	(Being C's share of goodwill distributed between A and B)

Working Notes:

1.

Admission of a Partner Exercise 5.88

Solution Ex. 26

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		13,600
	---------To C's Capital A/c				10,000
	---------To Premium for Goodwill A/c				3,600
	(Being capital and share of goodwill brought in by C)
	Premium for Goodwill A/c	Dr.		3,600
	---------To A's Capital A/c				900
	---------To B's Capital A/c				2,700
	(Being C's share of goodwill transferred to A and B in their sacrificing ratio i.e. 3:1 )
	Profit and Loss Appropriation A/c	Dr.		24,000
	---------To A's Capital A/c				13,000
	---------To, B's Capital A/c				7,000
	---------To, C's Capital A/c				4,000
	(Being Profit after C's admission distributed )

Working Notes:

1.

Solution Ex. 27

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		30,000
	---------To Premium for Goodwill A/c				30,000
	(Being X brought his share of goodwill )

	Premium for Goodwill A/c	Dr.		30,000
	Y's Capital A/c	Dr.		7,500
	---------To X's Capital A/c				37,500
	(Being Z share of gain and goodwill transferred to X's Capital Account)

Working Notes:

1.

X's will get Z's share of goodwill + Y's share of gain

i.e. 30,000 + 7,500 =Rs.37,500

Solution Ex. 28

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash or Bank A/c	Dr.		8,37,500
	--------- To Payal's Capital A/c To Premium for Goodwill A/c				5,00,000 3,37,500
	(Being Capital and share of Goodwill brought by Payal)

	Premium for Goodwill A/c	Dr.		3,37,500
	To Ansul's Capital A/c				2,02,500
	--------- To Parul's Capital A/c				1,35,000
	(Being Payal's share of goodwill transferred to Ansul and Parul's Capital Accounts in their sacrificing ratio)

Working Notes: Calculation of Payal's Share of Goodwill

Calculation of Adjusted Profits

Years	2015-16	2016-17	2017-18	2018-19
Profit /(Loss)	4,00,000	5,00,000	6,00,000	7,00,000
Adjustments: Undervaluation of Stock Overvaluation of Stock Management Cost	- - (1,00,000)	- - (1,00,000)	50,000 - (1,00,000)	- (50,000) (1,00,000)
Normal Profit	3,00,000	4,00,000	5,50,000	5,50,000

Solution Ex. 29

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	A's Capital A/c	Dr.		1,800
	B's Capital A/c	Dr.		1,200
	------To Goodwill A/c				3,000
	(Being Goodwill written-off)
	Cash A/c	Dr.		40,000
	-----To C's Capital A/c				30,000
	-----To Premium for Goodwill A/c				10,000
	(Being C brought capital and his share of goodwill in cash)
	Premium for Goodwill	Dr.		10,000
	------To A's Capital A/c				5,000
	------To B's Capital A/c				5,000
	(Being Premium of Goodwill distributed)

Solution Ex. 30

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Anu's Capital A/c	Dr.		3,30,000
	Bhagwan's Capital A/c	Dr.		1,10,000
	-----To Goodwill A/c				4,40,000
	( Being old goodwill written off in old ratio)

	Cash A/c	Dr.		1,50,000
	-----To Raja's Capital A/c				1,00,000
	-----To Premium for Goodwill A/c				50,000
	(Being capital and goodwill brought in by raju)

	Premium for Goodwill A/c	Dr.		50,000
	Bhagwan's Capital A/c	Dr.		37,500
	-----To, Anu's Capital A/c				87,500
	(Being premium for goodwill adjusted )

Working Notes:

1.

Solution Ex. 31

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Stock A/c	Dr.		60,000
	Debtors A/c	Dr.		80,000
	Land A/c	Dr.		1,00,000
	Plant and Machinery A/c	Dr.		40,000
	---------To Z's Capital A/c				1,30,000
	---------To Premium for Goodwill A/c				1,50,000
	(Being Z brought assets for his share of goodwill and Capital)
	Premium for Goodwill A/c	Dr.		1,50,000
	---------To X's Capital A/c				90,000
	---------To Y's Capital A/c				60,000
	(Being Z's share of goodwill distributed between X and Y in sacrificing ratio )

Working Notes:

1.

Admission of a Partner Exercise 5.89

Solution Ex. 32

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		14,000
	---------To C's Capital A/c				8,000
	---------To Premium for Goodwill A/c				6,000
	(Being C brought capital and his share of goodwill)
	Premium for Goodwill A/c	Dr.		6,000
	---------To A's Capital A/c				2,000
	---------To B's Capital A/c				4,000
	(Being C's share of goodwill distributed between A and B in sacrificing ratio i.e. 1:2 )
	A's Capital A/c	Dr.		2,000
	B's Capital A/c	Dr.		4,000
	---------To Cash A/c				6,000
	(Being amount of goodwill withdrawn by A and B)

Partner's Capital Accounts
Dr								Cr
Particulars	A	B	C	Particulars	A	B	C
To Cash A/c	2,000	4,000		By Balance b/d	8,000	10,000
To Balance c/d	8,000	10,000	8,000	By Cash A/c			8,000
				By Premium for Goodwill A/c	2,000	4,000
	10,000	14,000	8,000		10,000	14,000	8,000

Solution Ex. 33

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		3,50,000
	---------To C's Capital A/c				2,00,000
	---------To Premium for Goodwill A/c				1,50,000
	(Being C brought capital and Premium for goodwill)
	Premium for Goodwill A/c	Dr.		1,50,000
	---------To A's Capital A/c				1,10,000
	---------To B's Capital A/c				40,000
	(Being premium for Goodwill distributed)
	A's Capital A/c	Dr.		55,000
	B's Capital A/c	Dr.		20,000
	---------To Cash A/c				75,000
	(Being half of the goodwill withdrawn by A and B)

Working Notes:

1.

Solution Ex. 34

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	A's Capital A/c	Dr.		12,000
	B's Capital A/c	Dr.		6,000
	---------To Goodwill A/c				18,000
	( Being goodwill written-off)
	Cash A/c	Dr.		38,000
	---------To C's Capital A/c				30,000
	---------To Premium for Goodwill A/c				8,000
	(Being C brought capital and goodwill)
	Premium for Goodwill A/c	Dr.		8,000
	C's Capital A/c	Dr.		2,000
	---------To A's Capital A/c				6,667
	---------To B's Capital A/c				3,333
	(Being C's share of goodwill distributed between A and B in sacrificing Ratio)

Working Notes:

1.

Solution Ex. 35

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.

	Bank A/c	Dr.		15,000
	----------To Premium for Goodwill A/c				15,000
	(Being goodwill brought in cash)

	Premium for Goodwill A/c	Dr.		15,000
	----------To A's Capital A/c				10,000
	----------To B's Capital A/c				5,000
	(Being goodwill distributed between A and B in sacrificing ratio)

	C's Capital A/c	Dr.		10,000
	----------To A's capital A/c				6,667
	----------To B's Capital A/c				3,333
	(Being goodwill adjusted)

Working Note:

1.

Calculation of Sacrificing Ratio

2.

Calculation of share in goodwill of new partner

Solution Ex. 36

A) Where there is no Goodwill Account

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Rao's Capital A/c	Dr.		7,500
	---------To Murty's Capital A/c				4,500
	---------To Shah's Capital A/c				3,000
	(Being Rao's share of goodwill charged from his capital account and distributed between Murty and Shah in sacrificing ratio i.e. 3:2)

B) When Goodwill appears at 10,000

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Murty's Capital A/c	Dr.		6,000
	Shah's Capital A/c	Dr.		4,000
	---------To Goodwill A/c				10,000
	(Being goodwill written-off at the time of Rao's admission in old ratio)
	Rao's Capital A/c	Dr.		7,500
	---------To Murty's Capital A/c				4,500
	---------To Shah's Capital A/c				3,000
	(Being Rao's share of goodwill charged from his capital Account and distributed between Murty and Shah in sacrificing ratio i.e. 3:2)

Working Notes:

Solution Ex. 37

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	A's Capital A/c	Dr.		1,200
	B's Capital A/c	Dr.		800
	---------To Goodwill A/c				2,000
	(Being goodwill written-off at the time of C's admission)
	Cash A/c	Dr.		10,000
	---------To C's Capital A/c				10,000
	(Being Capital brought by C)
	C's Capital A/c	Dr.		3,000
	---------To A's Capital A/c				1,800
	---------To B's Capital A/c				1,200
	(Being C's share of capital charged from his capital distributed between A and B in their sacrificing ratio)

Working Notes:

Solution Ex. 38

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.

	Bank A/c	Dr.		3,30,000
	----------To D's Capital A/c				1,20,000
	----------To E's Capital A/c				1,20,000
	----------To Premium for Goodwill A/c				90,000
	(Being capital and goodwill brought in cash)

	C's Capital A/c	Dr.		36,000
	E's Capital A/c	Dr.		45,000
	Premium for goodwill A/c	Dr.		90,000
	----------To A's Capital A/c				1,35,000
	----------To B's Capital A/c				36,000
	(Being goodwill adjusted)

Working Notes:

1.

Calculation of Sacrificing Ratio

Old ratio (A: B: C) = 5: 4: 1

New ratio (A: B: C: D: E) = 3: 4: 2: 2: 1

Sacrificing (or Gaining) Ratio = Old Ratio - New Ratio

2.

Adjustment of Goodwill

Admission of a Partner Exercise 5.90

Solution Ex. 39

Journal
Date	Particulars		L.F.	Debit (Rs.)	Credit (Rs.)

(a)	Mohan's Capital A/c	Dr.		1,21,500
	Sohan's Capital A/c	Dr.		81,000
	-----To Goodwill A/c				2,02,500
	(Being old goodwill written-off in old ratio)

	Ram's Capital A/c	Dr.		50,625
	-----To Mohan's Capital A/c				30,375
	-----To Sohan's Capital A/c				20,250
	(Being premium not brought debited to Ram and credited to sacrificing partners)

(b)	Mohan's Capital A/c	Dr.		1,500
	Sohan's Capital A/c	Dr.		1,000
	-----To Goodwill A/c				2,500
	(Being old goodwill written-off in old ratio)

	Ram's Capital A/c	Dr.		50,625
	-----To Mohan's Capital A/c				30,375
	-----To Sohan's Capital A/c				20,250
	(Being premium not brought debited to Ram and credited to sacrificing partners)

(c)	Mohan's Capital A/c	Dr.		1,23,000
	Sohan's Capital A/c	Dr.		82,000
	-----To Goodwill A/c				2,02,500
	(Being old goodwill written-off in old ratio)

	Ram's Capital A/c	Dr.		50,625
	-----To Mohan's Capital A/c				30,375
	-----To Sohan's Capital A/c				20,250
	(Being premium not brought debited to Ram and credited to sacrificing partners)

Working Notes:

WN1: Calculation of Goodwill

Note: Since no information is given about the share of sacrifice, it is assumed that the old partners are sacrificing in their old profit sharing ratio.

Solution Ex. 40

Journal
Sr. no.	Particulars		L.F.	Debit Rs.	Credit Rs.

a)	Sooraj's Capital A/c	Dr.		1,50,000
	----------To Mohan's Capital A/c				1,20,000
	----------To Gopal's Capital A/c				30,000
	(Being goodwill not raised and written off in their sacrificing ratio)

b)	Goodwill A/c	Dr.		4,50,000
	To Madan's Capital A/c				2,70,000
	To Gopal's Capital A/c				1,80,000
	(Being goodwill raised in the books of the firm) Madan's Capital A/c Gopal's Capital A/c Sooraj's Capital A/c To Goodwill A/c (Being entry passed to write off the amount of goodwill raised in the new profit sharing ratio of partners)	Dr. Dr. Dr.		1,50,000 1,50,000 1,50,000	4,50,000

Working Notes:

1.

Calculation of Sacrificing Ratio

Old ratio = 5: 4: 1

New ratio = 1:1:1

Sacrificing (or Gaining) Ratio = Old Ratio - New Ratio

Solution Ex. 41

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Bank A/c	Dr.		3,20,000
	---------To Charu's Capital A/c				3,20,000
	(Being capital brought in by Charu)
	Charu's Current A/c	Dr.		1,00,000
	---------To Anil's Capital A/c				50,000
	---------To Sunil's Capital A/c				50,000
	(Being Charu's share of goodwill adjusted through current accounts)

Working Notes:

Admission of a Partner Exercise 5.91

Solution Ex. 42

Solution Ex. 43

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Bank/ Cash A/c	Dr.		75,000
	---------To Atul's Capital A/c				75,000
	(Being capital brought in)
	Atul's Capital A/c	Dr.		25,000
	---------To Bhuwan's Capital A/c				15,000
	---------To Shivam's Capital A/c				10,000
	(Being goodwill distributed in sacrificing ratio of 3:2)

Solution Ex. 44

Solution Ex. 45

Solution Ex. 46

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Ajay's Capital A/c	Dr.		2,00,000
	---------To Asin's Capital A/c				1,00,000
	---------To Shreya's Capital A/c				1,00,000
	(Being Ajay's share of goodwill distributed among the old partners in their sacrificing ratio 1:1)

Working Notes:

Solution Ex. 47

Journal Entries
S.No.		Particulars			L.F.	Debit Rs.	Credit Rs.
Case (a)
	Cash A/c			Dr.		24,000
		To Ghosh's Capital A/c					20,000
		To Premium for Goodwill A/c					4,000
	(Capital and Goodwill his share brought by Ghosh)

	Premium for Godwill A/c			Dr.		4,000
		To Verma's Capital A/c					2,500
		To Sharma's Capital A/c					1,500
	(Goodwill brought by Ghosh credited to Old Partners in Sacrificing ratio)

Case (b)	Cash A/c			Dr.		24,000
		To Ghosh Capital A/c					20,000
		To Premium for Goodwill A/c					4,000
	(Capital and Goodwill brought by Ghosh for (1/5) share of profit)

	Premium for Goodwill A/c			Dr.		4,000
		To Verma's Capital A/c					2,500
		To Sharma's Capital A/c					1,500
	(Goodwill brought by Ghosh credited in Old Partner in Sacrificing Ratio)

	Verma's Capital A/c		Dr.			2,500
	Sharma's Capital A/c		Dr.			1,500
		To Cash A/c					4,000
	(Amount of Premium for Goodwill withdrawn by Old Partners)

Case (c)	Cash A/c			Dr.		24,000
		To Ghosh's Capital A/c					20,000
		To Premium for Goodwill A/c					4,000
	(Capital and Goodwill brought by Ghosh for (1/5) share of profit)

	Premium for Goodwill A/c			Dr.		4,000
		To Verma's Capital A/c					2,500
		To Sharma's Capital A/c					1,500
	(Premium for Goodwill credited to Old Partner's Capital Account in sacrificing ratio)

	Verma's Capital A/c			Dr.		1,250
	Sharma's Capital A/c					750
		To Cash A/c					2,000
	(Half of the amount of premium for goodwill withdrawn by Old partners)

Case (d)	No entry: Goodwill was not brought into firm

Solution Ex. 48

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Bank A/c	Dr.		3,00,000
	---------To Hina's Capital A/c				3,00,000
	(Being capital brought in by Hina)
	Hina's Current A/c	Dr.		84,000
	---------To Disha's Current A/c				50,400
	---------To Divya's Current A/c				33,600
	(Being Hina's Share of goodwill adjusted through current accounts)

Working Notes:

Solution Ex. 49

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		50,000
	Machinery A/c	Dr.		70,000
	---------To Premium for Goodwill A/c				1,20,000
	(Being cash Rs.50,000 and Machinery Rs. 70,000 brought in by G for his share of Goodwill)
	Premium for Goodwill A/c	Dr.		1,20,000
	---------To E's Capital A/c				1,20,000
	(Being G share of goodwill transferred to E's Capital Account)
	F's Capital A/c	Dr.		30,000
	---------To E's Capital A/c				30,000
	(Being F's share of gain in goodwill charged from his capital and transferred to E's capital)

Working Notes:

Admission of a Partner Exercise 5.92

Solution Ex. 50

Capital as on April 01, 2013	2,50,000
Less: Loss in 2014	(5,000)
Add: Profit in 2015	13,000
Add: Profit in 2016	17,000
Add: Profit in 2017	20,000
Add: Profit in 2018	25,000
	3,20,000
Less: Drawings	(40,000)
A's Capital as on March 31,2018	2,80,000

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		3,01,000
	---------To B's Capital A/c	Dr.			2,80,000
	---------To Premium for Goodwill A/c				21,000
	(Being capital and goodwill brought in)
	Premium for Goodwill A/c	Dr.		21,000
	---------To A's Capital A/c				21,000
	(Being B's share of goodwill transferred to A's capital Accounts)

Solution Ex. 51

Journal
Sr. No.	Particulars		L.F.	Debit Rs.	Credit Rs.

(i)	Revaluation A/c	Dr.		16,000
	----------To Machinery A/c				16,000
	(Being value of machinery decreased)

(ii)	Building A/c	Dr.		40,000
	----------To Revaluation A/c				40,000
	(Being value of building increased)

(iii)	Revaluation A/c	Dr.		4,000
	----------To Provision for doubtful Debts A/c				4,000
	(Being provision created on debtors)

(iv)	Revaluation A/c	Dr.		12,000
	----------To provision for warranty claims A/c				12,000
	(Being liability recorded)

Solution Ex. 52

Journal
Sr. No.	Particulars		L.F.	Debit Rs.	Credit Rs.

(i)	Investment A/c	Dr.		20,000
	----------To Revaluation A/c				20,000
	(Being investments recorded)

(ii)	Revaluation A/c	Dr.		5,000
	----------To Creditors A/c				5,000
	(Being liability recorded)

(iii)	Creditors A/c	Dr.		1,600
	----------To Revaluation A/c				1,600
	(Being liability decreased)

Solution Ex. 54

Journal
Sr. No.	Particulars		L.F.	Debit Rs.	Credit Rs.

(i)	Revaluation A/c	Dr.		76,000
	----------To Stock A/c				40,000
	----------To Furniture A/c				36,000
	(Being value of assets decreased)

(ii)	X's Capital A/c	Dr.		45,600
	Y's Capital A/c	Dr.		30,400
	----------To Revaluation A/c				76,000
	(Being loss on revaluation transferred to partners capital A/c)

Solution Ex. 55

Journal
Sr. No.	Particulars		L.F.	Debit Rs.	Credit Rs.

(i)	X's Capital A/c	Dr.		24,000
	Y's Capital A/c	Dr.		16,000
	----------To Investment A/c				40,000
	(Being half of the investment taken over by X and Y)

(ii)	Investment A/c	Dr.		10,000
	----------To Revaluation A/c				10,000
	(Being value of investment increased)

(iii)	Revaluation A/c	Dr.		10,000
	----------To X's Capital A/c				6,000
	----------To Y's Capital A/c				4,000
	(Being profit on revaluation transferred to partners capital A/c)

Solution Ex. 53

Journal
Sr. No.	Particulars		L.F.	Debit Rs.	Credit Rs.

(a)	Provision for doubtful debts A/c	Dr.		5,000
	----------To Revaluation A/c				5,000
	(Being provision on debtors reduced)

(b)	Revaluation A/c	Dr.		5,000
	----------To X's Capital A/c				3,000
	----------To Y's Capital A/c				2,000
	(Being profit on revaluation transferred to partners' capital A/c)

Admission of a Partner Exercise 5.93

Solution Ex. 56

Journal
Sr. No.	Particulars		L.F.	Debit Rs.	Credit Rs.

(i)	Bad Debts A/c	Dr.		6,000
	----------To Debtors A/c				6,000
	(Being bad debts incurred)

(ii)	Provision for doubtful debts A/c	Dr.		6,000
	----------To Bad Debts A/c				6,000
	(Being bad debts adjusted)

(iii)	Revaluation A/c	Dr.		1,500
	----------To Provision for doubtful debts A/c				1,500
	(Being provision created)

(iv)	X's Capital A/c	Dr.		900
	Y's Capital A/c	Dr.		600
	----------To Revaluation A/c				1,500
	(Being loss on revaluation transferred to partners' capital A/c)

Working Notes:

1.

Calculation of provision for Doubtful Debts

Solution Ex. 57

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.

	Z's Capital A/c	Dr.		7,000
	W's Capital A/c	Dr.		3,500
	----------To X's Capital A/c				10,500
	(Being adjustment entry made)

Working Notes:

1.

Revaluation Account
Dr.				Cr.
Particular		Rs.	Particular	Rs.
To Plant and Machinery A/c		10,000	By Land and Building A/c	50,000
To Outstanding Expenses A/c		15,000	By Trade Creditors A/c	10,000
To Profit t/f to:
-----X's Capital A/c	21,000
-----Y's Capital A/c	10,500
-----Z's Capital A/c	3,500	35,000
		60,000		60,000

2.

Calculation of Sacrificing or gain

Old Ratio X: Y: Z = 6: 3: 1

New Ratio X: Y: Z: W = 3: 3: 3 :1

Sacrificing (or Gaining) Ratio = Old Ratio - New Ratio

3.

Adjustment of Revaluation Profit

Solution Ex. 58

Journal
Sr. No.	Particulars		L.F.	Debit Rs.	Credit Rs.

(i)	Creditors A/c	Dr.		5,000
	Building A/c	Dr.		40,000
	Investment A/c	Dr.		15,000
	----------To Revaluation A/c				60,000
	(Being increase in assets and decrease in liabilities transferred to revaluation account)

(ii)	Revaluation A/c	Dr.		10,000
	----------To Provision for doubtful debts A/c				5,000
	----------To Reserve for outstanding Repair Bill A/c				2,000
	----------To Creditors A/c				3,000
	(Being increase in liabilities, decrease in assets and reserves and provision created transferred to revaluation account)

(iii)	Revaluation A/c	Dr.		50,000
	----------To old partners capital A/c				50,000
	(Being profit on revaluation transferred to partners' capital)

Solution Ex. 59

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	General Reserve A/c	Dr.		1,50,000
	---------To X's Capital A/c				90,000
	---------To Y's Capital A/c				60,000
	(Being balance in General Reserves adjusted in old ratio)
	X's Capital A/c	Dr.		12,000
	Y's Capital A/c	Dr.		8,000
	---------To Profit and Loss A/c				20,000
	(Being debit balance in PandL A/c adjusted in old ratio)

Working Notes:

Solution Ex. 60

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	General Reserve A/c	Dr.		2,50,000
	Profit and Loss A/c	Dr.		50,000
	---------To X's Capital A/c				2,00,000
	---------To Y's Capital A/c				1,00,000
	(Being General Reserve A/c and balance in PandL adjusted in old ratio)

Working Note:

Admission of a Partner Exercise 5.94

Solution Ex. 61

Journal
Sr. No.	Particulars		L.F.	Debit Rs.	Credit Rs.

(a)	General Reserve A/c	Dr.		36,000
	Contingency Reserve A/c	Dr.		6,000
	Profit and Loss A/c	Dr.		18,000
	----------To X's Capital A/c				30,000
	----------To Y's Capital A/c				18,000
	----------To Z's Capital A/c				12,000
	(Being reserves distributed)

	X's Capital A/c	Dr.		12,000
	Y's Capital A/c	Dr.		7,200
	Z's Capital A/c	Dr.		4,800
	----------To Advertisement Suspense A/c				24,000
	(Being advertisement suspense distributed)

(b)	General Reserve A/c	Dr.		84,000
	----------To A's capital A/c				48,000
	----------To B's Capital A/c				36,000
	(Being general reserve distributed)

	A's capital A/c	Dr.		4,800
	B's Capital A/c	Dr.		3,600
	----------To Profit and Loss A/c				8,400
	(Being profit and loss a/c distributed)

(c)	Workman Compensation Reserve A/c	Dr.		72,000
	----------To X's Capital A/c				36,000
	----------To Y's Capital A/c				36,000
	(Being workman compensation reserve distributed)

(d)	Workman Compensation Reserve A/c	Dr.		72,000
	----------To Workman Compensation Claim A/c				48,000
	----------To X's Capital A/c				12,000
	----------To Y's Capital A/c				12,000
	(Being surplus workmen compensation reserve distributed)

(e)	Investment Fluctuation Reserve A/c	Dr.		24,000
	----------To Investment A/c				10,000
	----------To X's Capital A/c				7,000
	----------To Y's Capital A/c				7,000
	(Being surplus investment fluctuation reserve distributed)

(f)	General Reserve A/c	Dr.		4,800
	----------To Investment Fluctuation Reserve A/c				960
	----------To X's Capital A/c				1,920
	----------To Y's Capital A/c				1,920
	(Being surplus general reserve distribution)

(g)	C's Current A/c	Dr.		36,000
	D's Current A/c	Dr.		18,000
	----------To A's Current A/c				54,000
	(Being adjustment entry made)

Working Notes:

1.

Calculation of Sacrifice or Gain

Old Ratio (A, B and C) = 6: 3: 1

New Ratio (A, B, C and D) = 3: 3: 3: 1

Sacrificing (or Gaining Ratio) = Old Ratio - New Ratio

2.

Calculation and Adjustment of Net Effect

General Reserve	1,50,000
Contingency Reserve	60,000
Profit and Loss A/c (Cr.)	90,000
	3,00,000
Less: Advertisement Suspense A/c (Dr.)	(1,20,000)
Net Effect	1,80,000

Adjustment

Admission of a Partner Exercise 5.95

Solution Ex. 62

Balance Sheet (before admission of W)
Liabilities			Rs.	Assets	Rs.
				Motors	1,200
Capital :				Furniture	400
	X	1,500		Stock	2,650
	Y	1,750		Debtors	3,780
	Z	2,000	5,250	Cash (Balancing Fig.)	220
Other Liabilities			3,000
			8,250		8,250

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		3,300
	---------To W's Capital A/c				1,800
	---------To Premium for Goodwill A/c				1,500
	(Being goodwill and capital brought in by W in cash)
	Premium for Goodwill A/c	Dr.		1,500
	---------To X's Capital A/c				500
	---------To Y's Capital A/c				500
	---------To Z's Capital A/c				500
	(Being premium for goodwill distributed between X,Y and Z in sacrificing ratio)
	Revaluation A/c	Dr.		270
	---------To Motors A/c				250
	---------To Furniture A/c				20
	(Being decrease in value of Motors and Furniture transferred to Revaluation Account)
	X's Capital A/c	Dr.		90
	Y's Capital A/c	Dr.		90
	Z's Capital A/c	Dr.		90
	---------To Revaluation A/c				270
	(Being loss on revaluation transferred to Capital Account)

Balance Sheet (after admission of W)
Liabilities		Rs.	Assets	Rs.
			Motors (1,200 - 250)	950
Capital :			Furniture (400 -20)	380
	X ( 1,500 - 90+500)	1,910	Stock	2,650
	Y (1,750 - 90+500)	2,160	Debtors	3,780
	Z (2,000 - 90+500)	2,410	Cash (220+3,300)	3,520
	W	1,800
Other Liabilities		3,000
		11,280		11,280

Solution Ex. 63

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		5,880
	To Premium on Goodwill A/c (Being share of Goodwill brought in by the incoming partner)				5,880
	Premium on Goodwill A/c To A's Capital A/c To B's Capital A/c (Being Premium on Goodwill credited to A and B in their sacrificing ratio 3:2)	Dr.		5,880	3,528 2,352
	Cash A/c To C's Capital A/c (Being cash brought in by C as his capital in the firm)	Dr.		15,000	15,000

Balance Sheet (after admission of C)
Liabilities		Rs.	Assets	Rs.
Creditors		11,800	Cash (1,500+5,880+15,000)	22,380
Capital :			Stock	28,000
	A ( 51,450 +3,528)	54,978	Debtors	19,500
	B (36,750 + 2,352)	39,102	Furniture	2,500
	C	15,000	Machinery	48,500
		1,20,880		1,20,880

Calculation of New Profit Sharing Ratio:

Working Note:

1. Calculation of C's share in Goodwill:

Solution Ex. 64

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Profit and Loss Adjustment A/c	Dr.		1,750
	---------To Stock A/c				500
	---------To Plant and Machinery A/c				875
	---------To Reserve for doubtful debts A/c				375
	(Being decrease in stock and Plant and Reserve for Doubtful Debt so created transferred to Profit and Loss Adjustment Account)
	Building A/c	Dr.		2,500
	----------To Profit and Loss Adjustment A/c				2,500
	(Being increase in value of Building transferred to Profit and Loss Adjustment Account)
	Profit and Loss Adjustment A/c	Dr.		750
	---------To A's Capital A/c				500
	---------To B's Capital A/c				250
	(Being profit on revaluation of asset and liabilities distributed between A and B in their old ratio)
	Cash A/c	Dr.		10,500
	---------To C's Capital A/c				7,500
	---------To premium for Goodwill A/c				3,000
	(Being C brought capital and his share of goodwill)
	Premium for Goodwill A/c	Dr.		3,000
	---------To A's Capital A/c				2,000
	---------To B's Capital A/c				1,000
	(Being premium for goodwill distributed between A and B in their sacrificing ratio i.e. 2:1)

Profit and Loss Adjustment Account
Dr.					Cr.
Particulars		Rs.	Particulars	Rs.
To Stock A/c		500	By Building A/c	2,500
To Plant and Machinery A/c		875
To Reserve for Doubtful Debts A/c		375
To Profit transferred to
	A's Capital A/c	500
	B's Capital A/c	250
		2,500		2,500

	Partners Capital Accounts
Dr.							Cr.
Particulars	A	B	C	Particulars	A	B	C
To Balance c/d	17,500	11,250	7,500	By Balance b/d	15,000	10,000
				By Cash A/c			7,500
				By Premium for Goodwill A/c	2,000	1,000
				By Profit and Loss
				Adjustment A/c (Profit)	500	250
	17,500	11,250	7,500		17,500	11,250	7,500

Balance Sheet as on March 31, 2019 after C's admission
Liabilities			Rs.	Assets			Rs.
				Building (25,000+2,500)			27,500
Capital:				Plant and Machinery ( 17,500 - 875)			16,625
	A	17,500		Stock (10,000 - 500)			9,500
	B	11,250		Sundry Debtors		4,850
	C	7,500	36,250		Less: Provision for Doubtful Debt	(375)	4,475
Sundry Creditors			32,950	Cash in Hand ( 600 + 10,500)			11,100
			69,200				69,200

Admission of a Partner Exercise 5.96

Solution Ex. 65

Journal
Date	Particulars			L.F.	Dr. Rs.	Cr. Rs.
2019
Mar 31	Bank A/c		Dr.		1,60,000
		To C's Capital A/c				1,00,000
		To Premium for Goodwill A/c				60,000
	(Capital and premium for goodwill brought by C for 1/4 share)

	Premium for Goodwill A/c		Dr.		60,000
		To A's Capital A/c				40,000
		To B's Capital A/c				20,000
	(Premium for Goodwill brought transferred to old partners' capital account in their sacrificing ratio)

	Plant A/c		Dr.		20,000
	Building A/c		Dr.		15,000
		To Revaluation A/c				35,000
	(Increase in value of assets)

	Revaluation A/c		Dr.		8,000
		To Stock				4,000
		To Provision for Doubtful Debts A/c				3,000
		To Creditors A/c (Unrecorded)				1,000
	(Assets and liabilities revalued)

	Revaluation A/c		Dr.		27,000
		To A's Capital A/c				18,000
		To B's Capital A/c				9,000
	(Profit on revaluation transferred to old partners)

Revaluation Account
Dr.				Cr.
Particulars			Rs.		Particulars	Rs.
Stock			4,000		Plant	20,000
Provision for Doubtful Debts			3,000		Building	15,000
Creditors (Unrecorded)			1,000
Revaluation Profit
	A's Capital	18,000
	B's Capital	9,000	27,000
			35,000			35,000

Partners' Capital Account
Dr.					Cr.
Particulars	A	B	C	Particulars		A	B	C
Balance c/d	2,38,000	1,79,000	1,00,000	Balance b/d		1,80,000	1,50,000
				Bank				1,00,000
				Premium for Goodwill		40,000	20,000
				Revaluation		18,000	9,000

	2,38,000	1,79,000	1,00,000			2,38,000	1,79,000	1,00,000

Balance Sheet as on March 31, 2019
Liabilities			Rs.	Assets		Rs.
Bills Payable			10,000	Cash in Hand		10,000
Creditors			59,000	Cash at Bank		2,00,000
Outstanding Expenses			2,000	Sundry Debtors	60,000
Capital:				Less: Provision for Doubtful Debt	3,000	57,000
	A	2,38,000		Stock		36,000
	B	1,79,000		Plant		1,20,000
	C	1,00,000	5,17,000	Building		1,65,000
			5,88,000			5,88,000

Note: Since no information is given about the share of sacrifice, it is assumed that the old partners are sacrificing in their old profit sharing ratio.

Solution Ex. 66

a. If M acquires his share of profit from the firm in the original ratio.

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		4,00,000
	---------To M's Capital A/c				3,00,000
	---------To Premium for Goodwill A/c				1,00,000
	(Being capital and goodwill brought in by M in cash )
	Premium for Goodwill A/c	Dr.		1,00,000
	---------To J's Capital A/c				60,000
	---------To K's Capital A/c				40,000
	(Being premium for goodwill distributed between J and K in their Sacrificing Ratio)
	Reserve A/c	Dr.		1,00,000
	---------To J's Capital A/c				60,000
	---------To K's Capital A/c				40,000
	(Being reserve distributed between J and K in their old ratio)

Partners Capital Accounts
Dr.								Cr.
Particulars	J	K	M	Particulars	J	K	M
To Balance c/d	2,70,000	1,80,000	3,00,000	By Balance b/d	1,50,000	1,00,000
				By Cash A/c			3,00,000
				By Premium for Goodwill A/c	60,000	40,000
				By Reserve A/c	60,000	40,000
	2,70,000	1,80,000	3,00,000		2,70,000	1,80,000	3,00,000

Balance Sheet as on April 01, 2019 after M's admission
Liabilities	Rs.	Assets	Rs.
J's Capital	2,70,000	Cash (2,00,000+4,00,000)	6,00,000
K's Capital	1,80,000	Other Assets	1,50,000
M's Capital	3,00,000
	7,50,000		7,50,000

b. If M acquires his share of profit from the firm in equal proportions from the original partners.

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Reserve A/c	Dr.		1,00,000
	---------To J's Capital A/c				60,000
	---------To K's Capital A/c				40,000
	(Being reserve distributed between J and K in old ratio)
	Cash A/c	Dr.		4,00,000
	---------To M's Capital A/c				3,00,000
	---------To Premium for Goodwill A/c				1,00,000
	(Being M brought capital and his share of goodwill)
	Premium for Goodwill A/c	Dr.		1,00,000
	---------To J's capital A/c				50,000
	---------To K's capital A/c				50,000
	(Being premium for goodwill distributed between J and K in their sacrificing ratio i.e.1:1)

Partner's Capital Accounts
Dr.								Cr.
Particulars	J	K	M	Particulars	J	K	M
To Balance c/d	2,60,000	1,90,000	3,00,000	By Balance b/d	1,50,000	1,00,000
				By Cash A/c			3,00,000
				By Premium for Goodwill A/c	50,000	50,000
				By Reserve A/c	60,000	40,000

	2,60,000	1,90,000	3,00,000		2,60,000	1,90,000	3,00,000

Balance Sheet as on April 01, 2019 after M's admission
Liabilities	Rs.	Assets	Rs.
J's Capital	2,60,000	Cash(2,00,000+4,00,000)	6,00,000
K's Capital	1,90,000	Other Assets	1,50,000
M's Capital	3,00,000
	7,50,000		7,50,000

C. If M acquires his share of profit in the ratio of 3:1 from the original partners.

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Reserve A/c	Dr.		1,00,000
	---------To J's Capital A/c				60,000
	(Being reserve distributed between J and K at the time of M's admission)
	Cash A/c	Dr.		4,00,000
	---------To M's Capital A/c				3,00,000
	---------To Premium for Goodwill A/c				1,00,000
	(Being capital and share of goodwill brought in by M)
	Premium for Goodwill A/c	Dr.		1,00,000
	---------To J's capital A/c				75,000
	---------To K's capital A/c				25,000
	(Being premium for goodwill distributed between J and K in their sacrificing ratio i.e. 3:1)

Partner's Capital Accounts
Dr.								Cr.
Particulars	J	K	M	Particulars	J	K	M
To Balance c/d	2,85,000	1,65,000	3,00,000	By Balance b/d	1,50,000	1,00,000
				By Cash A/c			3,00,000
				By Premium for Goodwill A/c	75,000	25,000
				By Reserve A/c	60,000	40,000

	2,85,000	1,65,000	3,00,000		2,85,000	1,65,000	3,00,000

Balance Sheet as on April 01, 2019 after M's admission
Liabilities	Rs.	Assets	Rs.
J's Capital	2,85,000	Cash (2,00,000 + 4,00,000)	6,00,000
K's Capital	1,65,000	Other Assets	1,50,000
M's Capital	3,00,000
	7,50,000		7,50,000

Solution Ex. 67

Revaluation Account
Dr.				Cr.
Particulars			Rs.		Particulars	Rs.
Provision for Doubtful Debts			5,000		Land and Building	26,000
Claim against Workmen Compensation			6,000
Revaluation Profit
	Madhu's Capital	6,000
	Vidhi's Capital	9,000	15,000
			35,000			35,000

Partners' Capital Account
Dr.					Cr.
Particulars	Madhu	Vidhi	Gayatri	Particulars		Madhu	Vidhi	Gayatri
Balance c/d	5,98,000	4,17,000	4,00,000	Balance b/d		5,20,000	3,00,000
				Bank				4,00,000
				General Reserve		12,000	18,000
				Premium for Goodwill		60,000	90,000
				Revaluation		6,000	9,000

	5,98,000	4,17,000	4,00,000			5,98,000	4,17,000	4,00,000

Balance Sheet as on March 31, 2016
Liabilities			Rs.	Assets		Rs.
Bills Payable			1,50,000	Bank (50,000 + 4,00,000 + 1,50,000)		6,00,000
Claim for Workmen Compensation			6,000	Sundry Debtors	3,00,000
Capital:				Less: Provision for Doubtful Debt	15,000	2,85,000
	Madhu	5,98,000		Stock		80,000
	Vidhi	4,17,000		Machinery		2,80,000
	Gayatri	4,00,000	14,15,000	Land and Building		3,26,000
			15,71,000			15,71,000

Working Notes:

WN1: Calculation of Gayatri's Share of Goodwill

WN1: Calculation of Sacrificing Ratio

Sacrificing Ratio = Old Ratio - New Ratio

Admission of a Partner Exercise 5.97

Solution Ex. 68

Profit and Loss Adjustment Account
Dr.				Cr.
Particulars		Rs.	Particulars	Rs.
To Stock A/c		1,800	By Building A/c	15,000
To Furniture A/c		440	By Accrued Income A/c	2,400
To Provision for Doubtful Debts A/c		275	By Debts Recovered A/c	2,400
To Outstanding Rent A/c		4,800
To Profit transferred to:
----Shyamlal Capital A/c	4,994
----Sanjay Capital A/c	7,491	12,485
		19,800		19,800

Partners Capital Accounts
Dr.								Cr.
Particulars	Shyamlal	Sanjay	Shankar	Particulars	Shyamlal	Sanjay	Shankar
To Balance c/d	47,044	53,541	30,000	By Balance b/d	34,050	34,050
				By Cash A/c			30,000
				By Premium for Goodwill A/c	8,000	12,000
				By Revaluation A/c	4,994	7,491

	47,044	53,541	30,000		47,044	53,541	30,000

Balance sheet as on April 01, 2019 after Shanker's admission
Liabilities		Rs.	Assets			Rs.
Sundry Creditors		12,435	Cash in Hand(710+50,000 + 2,400)			53,110
Outstanding Rent		4,800	Cash at Bank			11,925
Capital			Sundry Debtors		5,500
Shyamlal	47,044			Less: Provision for D. Debts	275	5,225
Sanjay	53,541		Stock (18,000 - 1,800)			16,200
Shanker	30,000	1,30,585	Building(40,000+15,000)			55,000
			Furniture(4,400 - 440)			3,960
			Accrued Income			2,400
		1,47,820				1,47,820

Solution Ex. 69

Revaluation Account
Dr.					Cr.
Particulars	Rs.	Particulars			Rs.
To Provision for doubtful Debts A/c	1,700	By Prepaid Advt. Expenses A/c			1,200
To A's Capital A/c	2,100	By B's Capital A/c (Expenses)			2,000
		By Loss transferred to:
			A Capital A/c	300
			B Capital A/c	200
			C Capital A/c	100	600
	3,800				3,800

Partners Capital Accounts
Dr.										Cr.
Particulars	A	B	C	D	Particulars	A	B	C	D
To Revaluation A/c (Personal Exp.)		2,000			By Balance b/d	60,000	60,000	40,000
To Revaluation A/c (Loss)	300	200	100		By Creditors A/c				10,000
To Balance c/d	61,800	57,800	39,900	50,000	By Cash A/c				40,000
					By Revaluation A/c (Expenses)	2,100
	62,100	60,000	40,000	50,000		62,100	60,000	40,000	50,000

Balance Sheet as on April 01, 2019 after D's admission
Liabilities			Rs.	Assets			Rs.
Capital				Land and Building			50,000
	A	61,800		Plant and Machinery			40,000
	B	57,800		Furniture			30,000
	C	39,900		Prepaid Advt. Exp.			1,200
	D	50,000	2,09,500	Stock			20,000
				Debtors		30,000
Bill Payable			10,000		Add : B/R dishonored	4,000
Creditors		30,000			Less : 5% Provision for Doubtful debts	(1,700)	32,300
Less: D's Capital		(10,000)	20,000	Bills Receivable			20,000
				Bank (10,000 + 40,000 - 4,000)			46,000
			2,39,500				2,39,500

Admission of a Partner Exercise 5.98

Solution Ex. 70

Revaluation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Stock A/c	20,000	By Bad Debts A/c	4,000
To Outstanding Salaries A/c	12,000	By Loss on Revaluation Abhir's Capital A/c 21,000 Divya's Capital A/c 7,000	28,000
	32,000		32,000

Dr. Partners' Capital Accounts Cr.

Particulars	Abhir	Divya	Vibhor	Particulars	Abhir	Divya	Vibhor
To Revaluation A/c (Loss)	21,000	7,000	-	By Balance b/d	6,00,000	4,00,000	-
To Balance c/d	7,59,000	4,53,000	3,03,000	By General Reserves A/c By Premium on Goodwill A/c	90,000 60,000	30,000 20,000	- -
				By Investments A/c By Cash or Bank A/c	30,000 -	10,000 -	- 3,03,000
	7,80,000	4,60,000	3,03,000		7,80,000	4,60,000	3,03,000

Balance Sheet as on April 01, 2017 after Vibhor's admission
Liabilities			Rs.	Assets	Rs.
Capital				Investments	4,40,000
	Abhir	7,59,000		Stock	2,80,000
	Divya	4,53,000		Debtors	6,00,000
	Vibhor	3,03,000	15,15,000	Cash at Bank	5,27,000
Creditors			2,20,000
Employees' Provident Fund			1,00,000
Outstanding Salaries			12,000

			18,47,000		18,47,000

Solution Ex. 71

Revaluation Account
Dr.					Cr.
Particulars	Rs.	Particulars		Rs.
To Stock A/c	3,000	By Provision for Doubtful Debts A/c		600
To Creditors A/c	1,000	By Loss transferred to:
To Fixed Assets A/c	10,000		X Capital A/c	11,500
To Provident Fund A/c	5,000		Y Capital A/c	6,900
	19,000			19,000

Partner's Capital Accounts
Dr.								Cr.
Particulars	X	Y	Z	Particulars	X	Y	Z
To Revaluation A/c (Loss)	11,500	6,900		By Balance b/d	70,000	31,000
To Profit and Loss A/c	1,500	900		By Workmen's Compensation Fund A/c	3,625	2,175
To Balance c/d	72,625	25,375	20,000	By Cash A/c			20,000
				By Premium for Goodwill A/c	12,000
	85,625	33,175	20,000		85,625	33,175	20,000

Balance Sheet as on April 01, 2019 after Z's admission
Liabilities			Rs.	Assets	Rs.
Creditors (15,000+1,000)			16,000	Cash at Bank	5,000
Provident Fund (10,000+5,000)			15,000	Sundry Debtors	20,000
Capital				Stock (25,000 - 3,000)	22,000
	X	72,625		Fixed Assets (80,000 - 10,000)	70,000
	Y	25,375		Cash	32,000
	Z	20,000	1,18,000

			1,49,000		1,49,000

4.

Z's premium for goodwill will be transferred to X's Capital Account because Z receives his entire share from X.

Admission of a Partner Exercise 5.99

Solution Ex. 72

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.

	Revaluation A/c	Dr.		2,000
	----------To Provision for Doubtful Debts A/c				2,000
	(Being provision on debtors increased)

	Revaluation A/c	Dr.		2,000
	----------To Creditors A/c				2,000
	(Being creditors increased)

	Revaluation A/c	Dr.		2,000
	----------To Claim for Damages A/c				2,000
	(Being liability increased)

	Outstanding Rent A/c	Dr.		1,800
	----------To Revaluation A/c				1,800
	(Being liability decreased)

	X's Capital A/c	Dr.		2,520
	Y's Capital A/c	Dr.		1,680
	----------To Revaluation A/c				4,200
	(Being loss on revaluation transferred to partners' capital A/c)

	Workmen Compensation Reserve A/c	Dr.		5,600
	----------To Workmen Compensation claim A/c				3,000
	----------To X's Capital A/c				1,560
	----------To Y's Capital A/c				1,040
	(Being surplus workmen compensation reserve distributed)

	Bank A/c	Dr.		40,000
	----------To Z's Capital A/c				40,000
	(Being capital brought in cash)

	Z's Current A/c	Dr.		3,000
	----------To X's Capital A/c				1,800
	----------To Y's capital A/c				1,200
	(Being goodwill adjusted in the ratio 3:2)

Partners' Capital Account
Dr.							Cr.
Particular	X	Y	Z	Particular	X	Y	Z
To Profit and Loss A/c	2,400	1,600		By Balance b/d	50,000	60,000
To Revaluation A/c	2,520	1,680		By Bank A/c			40,000
To Balance c/d	48,440	58,960	40,000	By Workmen Compensation Reserve A/c	1,560	1,040
				By Z's Current A/c	1,800	1,200
	53,360	62,240	40,000		53,360	62,240	40,000

Balance sheet as on 1^st April 2019 after Z's admission

Liabilities		Rs.	Assets		Rs.
Outstanding Rent		11,200	Cash		50,000
Workmen Compensation Claim		3,000	Stock		20,000
Creditors		22,000	Machinery		38,600
Claim for Damages		2,000	Z's Current A/c		3,000
Capital			Debtors	80,000
X	48,440		Less: Provision for D. Debts.	(6,000)	74,000
Y	58,960
Z	40,000	1,47,400

		1,85,600			1,85,600

Working Notes:

1.

Calculation of Goodwill

2.

Calculation of Z's Share of goodwill

Solution Ex. 73

Revaluation Account
Dr.					Cr.
Particulars			Rs.	Particulars	Rs.
To Stock A/c			750	By Building A/c	5,000
To Provision for Doubtful Debts A/c		500
	Less: Old Provision	(400)	100
To Furniture A/c			500
To Profit on Revaluation transferred to :
	Rajesh Capital A/c		2,190
	Ravi Capital A/c		1,460
			5,000		5,000

Partners Capital Account
Dr.							Cr.
Particulars	Rajesh	Ravi	Raman	Particulars	Rajesh	Ravi	Raman
To Balance c/d	31,190	16,460	16,000	By Balance b/d	1,50,000	1,00,000
(before adjustment of goodwill)				By Revaluation A/c	2,190	1,460
				By Cash A/c			16,000
	31,190	16,460	16,000		31,190	16,460	16,000

To Rajesh's Capital A/c			1,635	By Balance c/d	31,190	16,460	16,000
To Raman's Capital A/c			1,635	By Raman Capital A/c	1,635	1,635
To Balance c/d	32,825	18,095	12,730


	32,825	18,095	16,000		32,825	18,095	16,000

Balance Sheet
As on 31^st March 2019 after Raman's admission
Liabilities			Rs.	Assets			Rs.
Creditors			38,500	Cash ( 2,000+ 16,000)			18,000
Outstanding Rent			4,000	Stock (15,000-750)			14,250
Capital				Prepaid Insurance			1,500
	Rajesh	32,825		Debtors		9,400
	Ravi	18,095			Less: Provision for Doubtful Debts	(500)	8,900
	Raman	12,730	63,650	Machinery			19,000
				Building (35,000+ 5,000)			40,000
				Furniture (5,000- 500)			4,500

			1,06,150				1,06,150

Working Notes:

2.

Calculation of Goodwill

Actual Capital of all Partners before adjustment of goodwill

= Rajesh Capital + Ravi's Capital + Raman Capital

= 31,190 + 16,460+16,000

= Rs.63,650

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Raman Capital A/c	Dr.		3,270
	-------To Rajesh's Capital A/c				1,635
	-------To Ravi's Capital A/c				1,635
	(Being Raman's share of goodwill adjusted)

Admission of a Partner Exercise 5.100

Solution Ex. 74

Revaluation Account
Dr.				Cr.
Particulars	Rs.	Particulars		Rs.
To Stock A/c(2,000 - 400)	1,600	By Prepaid Insurance A/c		600
To Bank A/c(Charges)	200	By Loss transferred to:
To Building A/c	3,000		A's Capital A/c	3,000
To Creditors A/c	800		B's Capital A/c	2,000

	5,600			5,600

Partners Capital Account
Dr.							Cr.
Particulars	A	B	C	Particulars	A	B	C
To Revaluation A/ c	3,000	2,000		By Balance b/d	60,000	40,000
To Balance c/d	63,000	42,000	30,000	By Bank A/c			30,000
				By Premium for Goodwill A/c	6,000	4,000

	66,000	44,000	30,000		66,000	44,000	30,000

Balance Sheet
as on April 01, 2019 after C's admission
Liabilities			Rs.	Assets	Rs.
Capital				Building ( 50,000 - 3,000)	47,000
	A	63,000		Plant and Machinery	30,000
	B	42,000		Stock	18,400
	C	30,000	1,35,000	Debtors	10,000
Creditors (20,000+800)			20,800	Bank	49,800
				Prepaid Insurance	600
			1,55,800		1,55,800

Bank Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	10,000	By Revaluation A/c ( Bank Charges)	200
To C's Capital A/c	30,000	By Balance c/d	49,800
To Premium for Goodwill A/c	10,000

	50,000		50,000

Working Notes:

Solution Ex. 75

Dr.	Revaluation Account			Cr.
Particulars		Rs.	Particulars	Rs.
To Creditors		7,000	By Machinery	20,000
To Partner's Capital A/c			By Outstanding Expenses	1,000
Divya	7,700
Yasmin	4,900
Fatima	1,400	14,000
		21,000		21,000

Dr.		Partners' Capital Account							Cr.
Particulars	Divya	Yasmin	Fatima	Aditya	Particulars	Divya	Yasmin	Fatima	Aditya
To Furniture A/ c	80,000	80,000	80,000		By Balance b/d	5,10,000	3,00,000	5,00,000
To Balance c/d	5,97000	3,76,400	4,50,000	4,50,000	By Bank A/c		50,000		4,50,0,000
					By Reserve Fund By Premium for Goodwill A/c By Revaluation A/c	49,500 1,10,000 7,700	31,500 70,000 4,900	9,000 20,000 1,400

	6,77,200	4,56,400	5,30,400	4,50,000		6,77,200	4,56,400	5,30,400	4,50,000

Balance Sheet
*As at 1.4.2018*
Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Sundry Creditors Public Deposits Outstanding Expenses Capital Account: Divya Yasmin Fatima Aditya	5,97,000 3,76,400 4,50,400 4,50,000	77,000 1,19,000 9,000 18,74,000	Factory Building Plant and Machinery Furniture Stock Debtors Less: Provision Cash at bank	1,50,000 (30,000)	7,35,000 2,00,000 20,000 1,45,000 1,20,000 8,59,000
		20,79,000			20,79,000

Dr. Bank Account Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	1,59,000	By Balance c/d	8,59,000
To Aditya's Capital A/c	4,50,000
To Premium for Goodwill A/c To Yasmin's Capital A/c	2,00,000 50,000

	8,59,000		8,59,000

Admission of a Partner Exercise 5.101

Solution Ex. 76

Revaluation Account
Dr.				Cr.
Particulars	Rs.	Particulars		Rs.
To Bad Debts A/c	2,000	By Stock A/c		2,000
To Provision for Doubtful Debts A/c (4,000× 50%)	2,000	By Creditors A/c (4,000- 3,200)		800
		By Loss transferred to:
			A's Capital A/c	720
			B's Capital A/c	480

	4,000			4,000

Partners' Capital Account
Dr.							Cr.
Particulars	A	B	C	Particulars	A	B	C
To Revaluation A/c	720	480		By Balance b/d	50,000	40,000
To Balance c/d	58,280	45,520	25,000	By Reserve A/c	6,000	4,000
				By Bank A/c			25,000
				By Premium for Goodwill A/c	3,000	2,000

	59,000	46,000	25,000		59,000	46,000	25,000

Balance Sheet
As on 1^st April 2019 after C's admission
Liabilities			Rs.	Assets			Rs.
Capital				Building			50,000
	A	58,280		Plant and Machinery			30,000
	B	45,520		Stock (18,000×100/90)			20,000
	C	25,000	1,28,800	Debtors		22,000
Creditors (20,000- 800)			19,200		Less: Bad Debts	(2,000)
Outstanding Expense			5,000		Less: Provision for D. Debts	(2,000)	18,000
				Bank ( 5,000 + 30,000)			35,000

			1,53,000				1,53,000

Working Notes:

Solution Ex. 77

Revaluation Account
Dr.				Cr.
Particulars		Rs.	Particulars	Rs.
To Profit transferred to:			By Fixed Assets:
	A's Capital A/c	15,000	Furniture A/c (95,000×10%)	9,500
	B's Capital A/c	10,000	Business Premises A/c	20,500
	C's Capital A/c	5,000	(2,05,000×10%)


		30,000		30,000

Partners' Capital Account
Dr.									Cr.
Particulars	A	B	C	D	Particulars	A	B	C	D
To A's Capital A/c (Goodwill)			7,500		By Balance b/d	1,20,000	1,20,000	1,20,000
To B's Capital A/c (Goodwill)			2,500		By Revaluation A/c (Profit)	15,000	10,000	5,000
To Balance c/d	1,65,000	1,40,000	1,15,000	1,20,000	By Cash A/c				1,20,000
					By Premium for Goodwill A/c	22,500	7,500
					By C's Capital A/c (Goodwill)	7,500	2,500
	1,65,000	1,40,000	1,25,000	1,20,000		1,65,000	1,40,000	1,25,000	1,20,000

Balance Sheet as on 1^st April 2019 after D's admission
Liabilities			Rs.	Assets	Rs.
Capital A/c s:				Furniture (95,000+ 9,500)	1,04,500
	A	1,65,000		Business Premises (2,05,000+20,500)	2,25,500
	B	1,40,000		Stock-in-trade	40,000
	C	1,15,000		Debtors	28,000
	D	1,20,000	5,40,000	Cash at Bank	15,000
Sundry Creditors			20,000	Cash in hand (4,200+1,50,000)	1,54,200
Outstanding salaries and wages			7,200


			5,67,200		5,67,200

Working Notes:

4.

Journal Entries for Capital brought in by D and distribution of Goodwill

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Cash A/c	Dr.		1,50,000
	-------To D's Capital A/c				1,20,000
	-------To Premium for Goodwill A/c				30,000
	(Being D brought capital and share of capital)

	Premium for Goodwill A/c	Dr.		30,000
	C's Capital A/c	Dr.		10,000
	-------To A's Capital A/c				30,000
	-------To B's Capital A/c				10,000
	(Being gain goodwill distributed between A and B in sacrificing ratio i.e 3:1)

Admission of a Partner Exercise 5.102

Solution Ex. 78

Revaluation Account
Dr.				Cr.
Particulars	Rs.	Particulars		Rs.
To Bad Debts A/c	3,000	By A's Capital A/c		300
To Provision for Doubtful Debts A/c	1,200	By Loss transferred to:
To Investment A/c (5,000-4,900)	100		A Capital A/c	2,400
			B Capital A/c	1,600

	4,300			4,300

Partners Capital Account
Dr.							Cr.
Particulars	A	B	C	Particulars	A	B	C
To Revaluation A/c	2,400	1,600		By Balance b/d	50,000	30,000
To Revaluation A/c	300			By Bank A/c			20,000
To Balance c/d	50,300	30,400	20,000	By Premium for Goodwill A/c	3,000	2,000

	53,000	32,000	20,000		53,000	32,000	20,000

Balance Sheet As on 1^ST April 2019 after C's admission
Liabilities			Rs.	Assets			Rs.
Capital				Building			35,000
	A	50,300		Machinery			25,000
	B	30,400		Stock			15,000
	C	20,000	1,00,700	Debtors		15,000
Creditors			20,000		Bad Debts	3,000
						12,000
					Less: 10% Provision for Doubtful Debts	(1,200)	10,800
				Bank			34,900
			1,20,700				1,20,700

Bank Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	5,000	By Balance c/d	34,900
To C's Capital A/c	20,000
To Premium for Goodwill A/c	5,000
To Investment A/c	4,900
	34,900		34,900

Working Notes:

3.
Sale of Investment
Bank A/c	Dr.	4,900
Revaluation A/c	Dr.	100
-------- To Investment A/c			5,000

4.
Bad debt recovered
A's Capital A/c	Dr.	300
------- To Revaluation A/c			300

Solution Ex. 79

Revaluation Account
Dr.				Cr.
Particulars		Rs.	Particulars	Rs.
To Stock A/c		10,000	By Land and Building A/c (1,25,000× 20%)	25,000
To Furniture A/c		500
To Provision for Doubtful Debts A/c		4,000
To Profit transferred to:
	X Capital A/c	7,875
	Y Capital A/c	2,625
		25,000		25,000

Partners Capital Account
Dr.							Cr.
Particulars	X	Y	Z	Particulars	X	Y	Z
To X's Capital A/c			15,000	By Balance b/d	1,50,000	80,000
To Y's Capital A/c			5,000	By Workmen's Compensation Fund A/c	15,000	5,000
To Balance c/d	1,87,875	92,625	30,000	By Revaluation A/c (Profit)	7,875	2,625
				By Cash A/c			50,000
				By Z's Capital A/c	15,000	5,000
	1,87,875	92,625	50,000		1,87,875	92,625	50,000

Balance Sheet as on 1^st April, 2019 after Z's admission
Liabilities			Rs.	Assets			Rs.
Capital				Land and Building (1,25,000+25,000)			1,50,000
	X	1,87,875		office Furniture (5,000-500)			4,500
	Y	92,625		Stock (1,00,000-10,000)			90,000
	Z	30,000	3,10,500	Sundry Debtors		80,000
Sundry Creditors			1,50,000		Less: 5% Provision for Doubtful Debts	(4,000)	76,000
Bills Payable			37,500	Cash at Bank			1,00,000
				Cash in Hand (12,500 + 50,000)			62,500
				Bills Receivable			15,000

			4,98,000				4,98,000

Working Notes:

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Z's Capital A/c	Dr.		20,000
	-------To X's Capital A/c				15,000
	-------To Y's Capital A/c				5,000
	(Being Z's share of goodwill changes from his capital account)

	Workmen Compensation Fund A/c	Dr.		20,000
	-------To X's Capital A/c				15,000
	-------To Y's Capital A/c				5,000
	(Being workmen compensation fund distributed)

Admission of a Partner Exercise 5.103

Solution Ex. 80

Revaluation Account
Dr.					Cr.
Particulars			Rs.	Particulars	Rs.
To Reserve for Doubtful Debts A/c		4,000		By Plant and Machinery A/c ( 60,000 - 48,000)	12,000
	Less: Old Reserve	(800)	3,200	By Stock A/c (40,00-32,000)	8,000
To Furniture A/c (10,000× 10% )			1,000	By Land and Building A/c (50,000×20%)	10,000
To Outstanding salary A/c			8,000
To Profit transferred to:
	Deepika Capital A/c		10,680
	Rajshree Capital A/c		7,120
			30,000		30,000

Partners' Capital Account
Dr.							Cr.
Particulars	Deepika	Rajshree	Anshu	Particulars	Deepika	Rajshree	Anshu
				By Balance b/d	48,000	40,000
To Balance c/d(before goodwill)	58,680	47,120	32,000	By Revaluation A/c	10,680	7,120
				By Cash A/c			32,000
	58,680	47,120	32,000		58,680	47,120	32,000

To Deepika's Capital A/c			2,220	By Balance c/d	58,680	47,120	32,000
To Rajshree's Capital A/c			2,220	By Anshu's Capital A/c	2,220	2,220
To Balance c/d	60,900	49,340	27,560


	60,900	49,340	32,000		60,900	49,340	32,000

Balance Sheet
as on 1^st April. 2019 after Anshu's admission
Liabilities			Rs.	Assets			Rs.
Outstanding Salaries			8,000	Cash in Hand			1,200
Sundry Creditors			16,000	Cash at Bank			28,800
Public Deposits			61,000	Stock			40,000
Outstanding Liabilities			2,000	Prepaid insurance			1,000
Capital A/c s:				Sundry Debtors		28,800
	Deepika	60,900			Less: Reserve for Doubtful Debts	(4,000)	24,800
	Rajshree	49,340		Plant and Machinery			60,000
	Anshu	27,560	1,37,800	Land and Building			60,000
				Furniture			9,000


			2,24,800				2,24,800

Admission of a Partner Exercise 5.104

Solution Ex. 81

Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
	Cash/Bank A/c Creditor's A/c	Dr. Dr.		65,000 10,000
	-------To Abhay's Capital A/c To Premium on Goodwill A/c				70,000 5,000
	(Being capital brought in by Abhay after adjusting amount due to him included in creditors and his share of goodwill)
	Premium for Goodwill A/c	Dr.		5,000
	-------To Atul's Current A/c				3,000
	-------To Amit's Current A/c				2,000
	(Being Premium for goodwill transferred to partners current account in sacrificing ratio i.e. 3:2)
	Plant and Machinery A/c To Furniture A/c To Revaluation A/c (Being decrease in the value of furniture and increase in the value of Plant and Machinery recorded)	Dr.		18,000	3,000 15,000
	Revaluation A/c To Stock A/c To Provision for Doubtful Debts A/c (Being overvaluation of stock adjusted and provision for doubtful debts @5% created through Revaluation Account)	Dr.		6,500	4,000 2,500
	Revaluation A/c To Atul's Current A/c To Amit's Current A/c (Being gain on revaluation distributed between old partners)	Dr.		8,500	5,100 3,400

Working Notes:

1. Valuation of Goodwill:

2. Calculation of Revaluation Gain or Loss:

Revaluation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Furniture A/c To Stock	3,000 4,000	By Plant and Machinery A/c	18,000
To Provision for Doubtful Debts A/c (50,000× 5%) To Gain on Revaluation transferred to Partners' Current Account: Atul's Current A/c 5,100 Amit's Current A/c 3,400	2,500 8,500

	18,000		18,000

Solution Ex. 82

Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
	Cash/Bank A/c To Ramesh's Capital A/c	Dr.		5,00,000	5,00,000
	(Being capital brought in by Ramesh)

	Ramesh's Current A/c To Yogesh's Current A/c To Naresh's Current A/c	Dr.		1,00,000	80,000 20,000
	(Being Ramesh's share of goodwill debited to his current account by crediting the remaining partners' current account in their sacrificing ratio i.e. 4:1)
	Building A/c Land A/c To Revaluation A/c (Being increase in the value of Building and Land recorded in the books of the firm)	Dr Dr.		40,000 40,000	80,000
	Revaluation A/c To Furniture A/c (Being reduction in the value of Furniture recorded in the books of the firm)	Dr.		10,000	10,000
	Revaluation A/c To Provision for doubtful debts A/c (Being provision for doubtful debts increased to 10% through Revaluation Account)	Dr.		11,000	11,000
	Revaluation A/c To Liability for damages A/c (Being liability for damages created through Revaluation Account)	Dr.		10,000	10,000
	Revaluation A/c To Yogesh's Current A/c To Naresh's Current A/c (Being gain on revaluation transferred to Partners' Capital A/c)	Dr.		49,000	29,400 19,600

Revaluation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Furniture A/c To Provision for Doubtful Debts A/c To Liability for Damages A/c To Gain on Revaluation transferred to Partners' Current Account: Yogesh's Current A/c 29,400 Naresh's Current A/c 19,600	10,000 11,000 10,000 49,000	By Land A/c By Building A/c	40,000 40,000

	80,000		80,000

Admission of a Partner Exercise 5.105

Solution Ex. 83

Revaluation Account
Dr.				Cr.
Particular	Rs.	Particular		Rs.
To Reserve for D. Debts A/c (27,500×2%)	550	By Free hold Premises A/c (22,400-20,000)		2,400
To Stock A/c	705	By Loss transferred to:
To Plant and Machinery A/c (13,500-11,800)	1,700		Ram's Current A/c	717
To Fixture and Fittings A/c	210		Shyam's Current A/c	598
To Vehicles A/c	550

	3,715			3,715

Partners Capital Account
Dr.							Cr.
Particular	Ram	Shyam	Arjun	Particular	Ram	Shyam	Arjun
To Balance c/d	30,000	25,000	20,000	By Balance b/d	30,000	25,000
				By Cash A/c			20,000

	30,000	25,000	20,000		30,000	25,000	20,000

Partners' Current Account
Dr.							Cr.
Particular	Ram	Shyam	Arjun	Particular	Ram	Shyam	Arjun
To Revaluation A/c	717	598		By Balance b/d	2,000	1,800
To Balance c/d	4,883	4,202		By Premium for Goodwill A/c	3,600	3,000

	5,600	4,800	Nil		5,600	4,800	Nil

Balance Sheet
Dr.						Cr.
Liabilities			Rs.	Assets			Rs.
Creditors			19,000	Freehold Premises			22,400
Bills Payable			16,000	Plant and Machinery			11,800
Capital				Fixture and Fittings			1,540
	Ram	30,000		Vehicles			800
	Shyam	25,000		Stock (14,100-750)			13,395
	Arjun	20,000	75,000	Bills Receivables			13,060
Capital				Debtors		27,500
	Ram	4,883			Less: Reserve for D. Debts	(550)	26,950
	Shaym	4,202	9,085	Bank			1,590
				Cash (950+20,000+6,000)			27,550
			1,19,085				1,19,085

Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
	Cash A/c	Dr.		26,600
	-------To Arjun's Capital A/c				20,000
	-------To Premium for Goodwill A/c				6,600
	(Being capital and goodwill brought in by Arjun)

	Premium for Goodwill A/c	Dr.		6,600
	-------To Ram's Current A/c				3,600
	-------To Shyam's Current A/c				3,000
	(Being Premium for goodwill transferred to partners current account in sacrificing ratio i.e. 6:5)

Solution Ex. 84

Revaluation Account
Dr.				Cr.
Particular	Rs.	Particular		Rs.
To Prov. For D. Debts A/c	600	By Accrued Income A/c		4,500
To Outstanding Rent A/c	15,000	By Loss transferred to:
To Investment A/c	6,000		X's Current A/c	10,260
			Y's Current A/c	6,840

	21,600			21,600

Partners Capital Account
Dr.							Cr.
Particular	X	Y	Z	Particular	X	Y	Z
To Balance c/d	1,80,000	90,000	60,000	By Balance b/d	1,80,000	90,000
				By Bank A/c			60,000

	1,80,000	90,000	60,000		1,80,000	90,000	60,000

Partners' Current Account
Dr.							Cr.
Particular	X	Y	Z	Particular	X	Y	Z
To Revaluation A/c	10,260	6,840		By Balance b/d	30,000	6,000
				By General Reserve A/c	21,600	14,400
To Goodwill A/c	18,000	12,000		By Premium for Goodwill A/c	25,200	10,800
To Bank A/c	12,600	5,400
To Investment A/c	18,000
To Balance c/d	17,940	6,960

	76,800	31,200	Nil		76,800	31,200	Nil

Balance Sheet
Dr.						Cr.
Liabilities			Rs.	Assets			Rs.
Capital				Patents			44,400
	X	1,80,000		Fixed Assets			2,16,000
	Y	90,000		Accrued Income			4,500
	Z	60,000	3,30,000	Cash at Bank(15,000+96,000-18,000)			93,000
Outstanding rent			15,000	Debtors		60,000
Current					Less:5% Reserve for D. Debts	(3,000)	57,000
	X	17,940
	Y	6,960	24,900
Creditors			45,000
			4,14,900				4,14,900

Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
	Bank A/c	Dr.		96,000
	-------To Z's Capital A/c				60,000
	-------To Premium for Goodwill A/c				36,000
	(Being Z brought capital and share of goodwill)

	Premium for Goodwill A/c	Dr.		36,000
	-------To X's Current A/c				25,200
	-------To Y's Current A/c				10,800
	(Being Premium for goodwill transferred to partners current account in sacrificing ratio i. e 7:3

	X's Current A/c	Dr.		12,600
	Y's Current A/c	Dr.		5,400
	-------To Bank A/c				18,000
	(Being half of goodwill withdrawn by partners)

Admission of a Partner Exercise 5.106

Solution Ex. 85

Revaluation Account
Dr.				Cr.
Particular	Rs.	Particular		Rs.
To Reserve for D. Debts A/c	2,500	By Creditors A/c		7,500
To Liability for WCF A/c	10,000	By Loss transferred to:
			X's Current A/c	2,500
			Y's Current A/c	2,500

	12,500			12,500

Partners' Current Account
Dr.					Cr.
Particular	X	Y	Particular	X	Y
To Revaluation A/c	2,500	2,500	By Balance b/d	40,000	30,000
To Balance c/d	37,500	27,500

	40,000	30,000		40,000	30,000

Partners' Capital Account
Dr.							Cr.
Particular	X	Y	Z	Particular	X	Y	Z
To Balance c/d	1,87,500	1,27,500	1,25,000	By Balance b/d	1,50,000	1,00,000
				By Current A/c	37,500	27,500
				By Bank A/c			1,25,000
	1,87,500	1,27,500	1,25,000		1,87,500	1,27,500	1,25,000

Balance Sheet
Dr.					Cr.
Liabilities			Rs.	Assets		Rs.
Creditors			1,02,500	Land and Building		1,50,000
( 1,30,000-7,500-20,000)				Plant and Machinery		1,00,000
Bills Payable			70,000	Fixture and Fittings		25,000
( 50,000+20,000)				Stock		75,000
Capital A/c s:				Bills Receivables		30,000
	X	1,87,500		Bank (50,000+1,25,000+50,000)		2,25,000
	Y	1,27,500		Debtors	75,000
	Z	1,25,000	4,40,000	Less: 10% Reserve for D. Debts	(7,500)	67,500
X's Loan			50,000
Liability for WCF			10,000


			6,72,500			6,72,500

Solution Ex. 86

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Revaluation A/c	Dr.		14,700
	-------To Typewriter A/c				1,000
	-------To Fixed Assets A/c				13,700
	(Being decrease in value of typewriter and fixed assets transferred to revaluation account)

	Stationery A/c	Dr.		1,000
	Investment A/c	Dr.		2,000
	-------To Revaluation A/c				3,000
	(Being increase in stationary and investment transferred to revaluation account)

	X's Capital A/c	Dr.		7,800
	Y's Capital A/c	Dr.		3,900
	-------To Revaluation A/c				11,700
	(Being revaluation loss transferred to X and Y 's capital account in their old ratio)

	Reserve Fund A/c	Dr.		18,000
	-------To X's Capital A/c				12,000
	-------To Y's Capital A/c				6,000
	(Being reserve fund distributed)

	Cash A/c	Dr.		55,000
	-------To Z's Capital A/c				40,000
	-------To Premium for Goodwill A/c				15,000
	(Being Z brought capital and share of goodwill)

	Premium for Goodwill A/c	Dr.		15,000
	-------To X's Capital A/c				10,000
	-------To Y's Capital A/c				5,000
	(Being premium for goodwill distributed between X and Y in their sacrificing ratio i. e. 2: 1)

	X's Capital A/c	Dr.		5,000
	Y's Capital A/c	Dr.		2,500
	-------To Cash A/c				7,500
	(Being half of the premium for goodwill withdrawn by X and Y)

	X's Capital A/c	Dr.		10,000
	-------To Investment A/c				10,000
	(Being X took over the investment)

	Cash A/c	Dr.		4,800
	-------To X's Capital A/c				4,800
	(Being X brought cash to make up deficiency in capital )

	Y's Capital A/c	Dr.		26,600
	-------To Cash A/c				26,600
	(Being Y withdrew excess capital after adjustment)

Cash/Bank Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	5,000	By X's Capital A/c (Goodwill)	5,000
To Z's Capital A/c	40,000	By Y's Capital A/c (Goodwill)	2,500
To Premium for Goodwill A/c	15,000	By Y's Capital A/c	26,600
To X's Capital A/c	5,800	By Balance c/d	31,700

	65,800		65,800

Revaluation Account
Dr.				Cr.
Particulars	Rs.	Particulars		Rs.
To Typewriter A/c (5,000 ×20% )	1,000	By Investment A/c		2,000
To Fixed assets A/c (1,37,000 ×10%)	13,700	By Stationery A/c		1,000
		By Loss transferred to:
			X Capital A/c	7,800
			Y Capital A/c	3,900
	14,700			14,700

Partners' Capital Account
Dr.							Cr.
Particulars	X	Y	Z	Particulars	X	Y	Z
To Revaluation A/c	7,800	3,900		By Balance b/d	75,000	62,000
To Investment A/c	10,000			By Reserve Fund A/c	12,000	6,000
To Cash A/c	5,000	2,500		By Cash A/c			40,000
To Balance c/d	74,200	66,600	40,000	By Premium for Goodwill A/c	10,000	5,000

	97,000	73,000	40,000		97,000	73,000	40,000

To Cash A/c		26,600		By Balance b/d	74,200	66,600	40,000
To Balance c/d (adjusted)	80,000	40,000	40,000	By Cash A/c	5,800
	80,000	66,600	40,000		80,000	66,600	40,000

Balance Sheet as on 31^st March 2019 after Z's admission
Liabilities			Rs.	Assets	Rs.
Sundry Creditors			25,000	Cash	31,700
Capital				Sundry Debtors	15,000
	X	80,000		Stock	10,000
	Y	40,000		Typewriter (5,000 - 20%)	4,000
	Z	40,000	1,60,000	Fixed Assets (1,37,000 - 10%)	1,23,300
				Stationery	1,000

			1,85,000		1,85,000

Working Notes:

Solution Ex. 87

Revaluation Account
Dr.				Cr.
Particulars		Rs.	Particulars	Rs.
To Plant and Machinery A/c (4,000×10%)		400	By Stock A/c ( 24,940 -22,000)	2,940
To Provision for Bad Debts A/c		500
To Profit transferred to:
	A Capital A/c	1,360
	B Capital A/c	680

		2,940		2,940

Partners' Capital Account
Dr.							Cr.
Particulars	A	B	C	Particulars	A	B	C
To Balance c/d	18,360	11,680	10,000	By Balance b/d	15,000	10,000
				By Cash A/c			10,000
				By Premium for Goodwill A/c	2,000	1,000
				By Revaluation A/c	1,360	680
	18,360	11,680	10,000		18,360	11,680	10,000
To Cash A/c		1,680		By Balance b/d	18,360	11,680	10,000
To Balance c/d	20,000	10,000	10,000	By Cash A/c	1,640

	20,000	11,680	10,000		20,000	11,680	10,000

Balance Sheet as on 1^st April 2019 after C's admission
Liabilities			Rs.	Assets			Rs.
Sundry Creditors			2,000	Cash			13,960
Bank Overdraft			15,000	Sundry Debtors		15,000
Capital					Less: Prov. for Bad Debts	(500)	14,500
	A	20,000		Stock			24,940
	B	10,000		Plant and Machinery			3,600
	C	10,000	40,000

			57,000				57,000

Cash Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	1,000	By B's Capital A/c	1,680
To C's Capital A/c	10,000	By Balance c/d	13,960
To Premium for Goodwill A/c	3,000
To A's Capital A/c	1,640


	15,640		15,640

Admission of a Partner Exercise 5.107

Solution Ex. 88

Revaluation Account
Dr.				Cr.
Particulars		Rs.	Particulars	Rs.
To Plant and Machinery A/c (70,000 - 60,000)		10,000	By Land and Building A/c (65,000 - 40,000)	25,000
To Profit transferred to:			By Provision for D. Debts A/c	400
	A Capital A/c	12,450	By Creditors A/c	1,200
	B Capital A/c	4,150

		26,600		26,600

Partners' Capital Account
Dr.							Cr.
Particulars	A	B	C	Particulars	A	B	C
To Balance c/d	74,450	88,150	60,000	By Balance b/d	50,000	80,000
				By General Reserve A/c	7,500	2,500
				By Revaluation A/c	12,450	4,150
				By Cash A/c			60,000
				By Premium for Goodwill A/c	4,500	1,500

	74,450	88,150	60,000		74,450	88,150	60,000
To B's Current A/c		43,150		By Balance b/d	74,450	88,150	60,000
To Balance c/d	1,35,000	45,000	60,000	By A's Current A/c	60,550

	1,35,000	88,150	60,000		1,35,000	88,150	60,000

Balance Sheet
as on 1^st April 2019 after C's admission
Liabilities			Rs.	Assets			Rs.
Creditors (70,000-1,200)			68,800	Land and Building			65,000
Capital				Plant and Machinery			60,000
	A	1,35,000		Stock			30,000
	B	45,000		Debtors		35,000
	C	60,000	2,40,000		Less: Prov. For Doubtful Debts	600	34,400
B's Current A/c			43,150	Debts
				Investments			26,000
				Cash			76,000
				A's Current A/c			60,550
			3,51,950				3,51,950

3 :

5.

Cash Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	10,000	By Balance c/d	76,000
To C 's Capital A/c	60,000
To Premium for Goodwill A/c	6,000
	76,000		76,000

Solution Ex. 89

Revaluation Account
Dr.					Cr.
Particulars	Rs.	Particulars			Rs.
To Stock A/c	27,400	By Land and Building A/c			35,000
To Furniture A/c	16,000	By Plant and machinery A/c			6,750
To Investment A/c	7,300	By Loss transferred to:
			X's Capital A/c	4,475
			Y's Capital A/c	2,983
			Z's Capital A/c	1,492	8,950

	50,700				50,700

Partners' Current Account
Dr.							Cr.
Particulars	X	Y	Z	Particulars	X	Y	Z
To Balance b/d		7,000		By Balance b/d	4,000		6,000
To Revaluation A/c (loss)	4,475	2,983	1,492	By General Reserve A/c	7,500	5,000	2,500
To Balance c/d	1,00,525	47,350	83,175	By Profit and loss A/c	3,500	2,333	1,167
				By Premium for Goodwill A/c	15,000
				By Capital A/c	75,000	50,000	75,000
	1,05,000	57,333	84,667		1,05,000	57,333	84,667

Partners Capital Account
Dr.									Cr.
Particulars	X	Y	Z	W	Particulars	X	Y	Z	W
To Current A/c	75,000	50,000	75,000		By Balance b/d	1,75,000	1,50,000	1,25,000
To Balance c/d	1,00,000	1,00,000	50,000	50,000	By Cash A/c				50,000

	1,75,000	1,50,000	1,25,000	50,000		1,75,000	1,50,000	1,25,000	50,000

Admission of a Partner Exercise 5.108

Solution Ex. 90

Revaluation Account
Dr.					Cr.
Particulars			Rs.	Particulars	Rs.
To Machinery A/c			45,000	By Land and Building A/c	70,000
To Profit transferred to:
	Shikhar's Capital A/c	17,500
	Rohit's Capital A/c	7,500	25,000

			70,000		70,000

Partners Capital Account
Dr.							Cr.
Particulars	Shiker	Rohit	Kavi	Particulars	Shiker	Rohit	Kavi
				By Balance b/d	8,00,000	3,50,000
To Balance c/d	9,40,000	4,10,000	4,30,000	By General Reserve A/c	70,000	30,000
				By Workmen's Compensation fund A/c	35,000	15,000
				By Cash A/c			4,30,000
				By Premium for Goodwill A/c	17,500	7,500
				By Revaluation A/c	17,500	7,500
	9,40,000	4,10,000	4,30,000		9,40,000	4,10,000	4,30,000
To Cash A/c	37,000	23,000		By Balance b/d	9,40,000	4,10,000	4,30,000
To Balance c/d	9,03,000	3,87,000	4,30,000

	9,40,000	4,10,000	4,30,000		9,40,000	4,10,000	4,30,000

Balance Sheet as on 1^st April 2013 after Kavi's admission
Liabilities			Rs.	Assets			Rs.
Liability for Workmen's Compensation			50,000	Land and Building			4,20,000
Creditors			1,50,000	Machinery		4,50,000
Capital					Less: Depreciation @ 10%	(45,000)	4,05,000
	Shikhar	9,03,000		Debtors		2,20,000
	Rohit	3,87,000			Less: Provision	(20,000)	2,00,000
	Kavi	4,30,000	17,20,000	Stock			3,50,000
				Cash			5,45,000

			19,20,000				19,20,000

Working Notes

Solution Ex. 91

Revaluation Account
Dr.					Cr.
Particulars			Rs.	Particulars	Rs.
To Profit transferred to:				By Building A/c	19,600
	Raghu's Capital A/c	22,440		By Provision for Doubtful Debts A/c	7,000
	Rishu's Capital A/c	14,960	37,400	By Liability for Creditors A/c	10,800

			37,400		37,400

Partners Capital Account
Dr.							Cr.
Particulars	Raghu	Rishu	Rishabh	Particulars	Raghu	Rishu	Rishabh
				By Balance b/d	1,19,000	1,12,000
To Cash A/c	48,040	84,860		By Cash A/c			50,000
To Balance c/d	1,00,000	50,000	50,000	By Investment Fluctuation Fund A/c	2,400	1,600
				By Premium for Goodwill A/c	4,200	6,300
				By Revaluation A/c (Profit)	22,440	14,960


	1,48,040	1,34,860	50,000		1,48,040	1,34,860	50,000

Balance Sheet
as on 31^st March 2009
Liabilities			Rs.	Assets	Rs.
Creditors		86,00		Cash	4,600
	Less: Liability	(10,800)	75,200	Debtors	42,000
Employees Provident Fund			10,000	Investment	21,000
Capital				Buildings ( 98,000+19,600)	1,17,600
	Raghu	1,00,000		Plant and Machinery	1,00,000
	Rishu	50,000
	Rishabh	50,000	2,00,000


			2,85,200		2,85,200

4.

Cash Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	77,000	By Raghu's Capital A/c	48,040
To Rishabh's Capital A/c	50,000	By Rishu's Capital A/c	84,860
To Premium for Goodwill A/c	10,500	By Balance c/d	4,600

	1,37,500		1,37,500

Admission of a Partner Exercise 5.109

Solution Ex. 92

Revaluation Account
Dr.					Cr.
Particulars	Rs.	Particulars			Rs.
To Bad Debts A/c	500	By Stock A/c			500
To Plant and Machinery A/c	28,000	By Loss on Revaluation A/c
			Abhy's Capital A/c	14,000
			BInay's Capital A/c	14,000	28,000



	28,500				28,500

Partners Capital Account
Dr.							Cr.
Particulars	Abha	Binay	Chitra	Particulars	Abha	Binay	Chitra
To Revaluation A/c	14,000	14,000		By Balance b/d	55,000	30,000
To Goodwill A/c	5,000	5,000		By Bank A/c			18,000
To Profit and Loss A/c	2,500	2,500		By Premium for Goodwill A/c	2,500	2,500
To Stock A/c	4,000	4,000		By WCF A/c	7,500	7,500
To Balance c/d	39,500	14,500	18,000

	65,000	40,000	18,000		65,000	40,000	18,000

To Bank A/c	12,500			By Balance c/d	39,500	14,500	18,000
To Balance c/d (adjustment)	27,000	27,000	18,000	By Bank A/c		12,500

	39,500	27,000	18,000		39,500	27,000	18,000

Working Note:

1.

Chitra's Capital = Total Adjusted Capital of Abha and Binay × Reciprocal of Combined Profit Share × Chira's Profit Share.

Abha's Adjusted Capital = 55,000+2,500+ 7,500 - 14,000 - 5,000 - 2,500 - 4,000 = Rs.39,5000

Binay's Adjusted Capital = 30,000 + 2,500 +7,500 - 14,000 - 5,000 - 2,500 - 4,000 = Rs.14,500

Solution Ex. 93

In the books of firm

Revaluation Account
Dr.				Cr.
Particulars		Rs.	Particulars	Rs.
To Stock A/c		10,000	By Plant and Machinery A/c	14,000
To Revaluation Gain A/c			By Creditors A/c By Investments A/c	3,000 5,000
Sarthak's Capital A/c	8,000
Vansh's Capital A/c	4,000	12,000
		22,000		22,000

Partners' Capital Account
Dr.							Cr.
Particulars	Sarthak	Vansh	Mansi	Particulars	Sarthak	Vansh	Mansi
To Investment A/c	20,000	-	-	By Balance b/d	70,000	60,000	-
To Balance c/d	1,10,000	90,000	1,00,000	By General Reserve A/c	12,000	6,000	-
				By Revaluation Gain A/c By Premium for Goodwill A/c	8,000	4,000
					40,000	20,000	1,00,000


	1,30,000	90,000	1,00,000		1,30,000	90,000	1,00,000

Balance Sheet
Liabilities		Rs.	Assets	Rs.
Capital			Plant	80,000
Sarthak	1,10,000		Furniture	30,000
Vansh	90,000		Investment	25,000
Mansi	1,00,000	3,00,000	Stock	36,000
			Debtors	34,000
Bank Loan		18,000	Cash	1,82,000
Creditors		69,000


		3,87,000		3,87,000

Working Note:

1. Calculation of Mansi's Capital:

Chitra's Capital = Total Adjusted Capital of Sarthak and Vansh× Reciprocal of Combined Profit Share × Chira's Profit Share.

Sarthak's Adjusted Capital = Rs.1,10000

Vansh's Adjusted Capital = Rs.90,000

Admission of a Partner Exercise 5.110

Solution Ex.94


Dr. Revaluation Account Cr.
Particulars	Rs.	Particulars	Rs.
To Machinery A/c To Outstanding Rent A/c	14,100 1,900	By Stock A/c By Creditors A/c	4,000 12,000

	16,000		16,000

	Partners' Capital Account
Dr.								Cr.
Particulars	A	B	C	D	Particulars	A	B	C	D
					By Balance b/d	36,000	44,000	52,000	-
To Goodwill To Balance c/d	4,000 36,000	6,000 44,000	10,000 52,000	- 88,000	By Premium on Goodwill By General Reserves By Cash A/c	1,200 2,800 -	1,800 4,200 -	3,000 7,000 -	- - 88,000

	40,000	50,000	62,000	88,000		40,000	50,000	62,000	88,000

Balance Sheet
as on 31^st March 2019
Liabilities			Rs.	Assets	Rs.
Creditors		64,000		Cash	1,12,000
	Less: Not to be paid	(12,000)	52,000	Bills Receivable	14,000
Outstanding Rent Bills Payable			1,900 22,000	Stock Debtors	48,000 42,000
Capital A/cs:				Machinery	79,900
	A	36,000
	B	44,000
	C D	52,000 88,000	2,20,000

			2,95,900		2,95,900

Cash Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	18,000
To D's Capital A/c	88,000
To Premium for Goodwill A/c	6,000	By Balance c/d	1,12,000
	1,12,000		1,12,000

Working Note:

1. Calculation of D's Capital:

D's Capital = Total Adjusted Capital of A, B and C × Reciprocal of Combined Profit Share ×D's Share

Solution Ex.95


Dr.		Partner's Capital Account					Cr.
Particulars	A	B	C	Particulars	A	B	C
				By Balance b/d	3,00,000	3,00,000	-
To Bank A/c* To Balance c/d	1,16,000 2,00,000	1,04,000 2,00,000	- 2,00,000	By Premium on Goodwill By Bank A/c	16,000 -	4,000 -	- 2,00,000

	3,16,000	304,000	2,00,000		3,16,000	304,000	2,00,000

*Since it is already given that total capital of 6,00,000 is contributed equally by all partners, closing balance of A, B and C's Capital will be 2,00,00 each (6,00,000/3). Therefore, the difference between the debit and credit side totals (i.e., the balancing fig.) of the capital accounts will either be cash to be paid to the partners or cash to be brought in the partners.

Bank Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	40,000	By A's Capital A/c	1,16,000
To C's Capital A/c	2,00,000	By B's Capital A/c	1,04,000
To Premium for Goodwill A/c	20,000	By Balance c/d	40,000
	2,60,000		2,60,000

Working Note:

1. Calculation of Sacrificing Ratio:

2. C's share of Goodwill:

This share of Goodwill will be distributed among the existing partners in their sacrificing ratio 4:1 as follows:

Admission of a Partner Exercise 5.111

Solution Ex.96

Revaluation Account
Dr.				Cr.
Particular	Rs.	Particular		Rs.
To Investment A/c	24,000	By Creditors A/c		6,000
To Machinery A/c	12,000	By Loss on Revaluation
		L's Capital A/c	15,000
		M's Capital A/c	10,000
		N's Capital A/c	5,000	30,000

	36,000			36,000

Partners Capital Account
Dr.					Cr.
Particular	X	Y	Z	O	Particular	X	Y	Z	O
To Revaluation A/c	15,000	10,000	5,000		Balance b/d	1,20,000	80,000	40,000
Balance c/d	1,56,000	84,000	42,000	56,400	By Gen. Reserve A/c	21,000	14,000	7,000
					By P. for Goodwill A/c	30,000
					By Cash A/c				56,400
	1,71,000	94,000	47,000	56,400		1,71,000	94,000	47,000	56,400

Balance sheet as on 31^st March 2015

Liabilities		Rs.	Assets	Rs.
Creditors		1,62,000	Bank (34,000+56,400+30,000)	1,20,400
Capitals:			Debtors	46,000
L	1,56,000		Stock	2,20,000
M	84,000		Investments	36,000
N	42,000		Furniture	20,000
O	56,400	3,38,400	Machinery	58,000

		5,00,400		5,00,400

Working Notes:

1.

Sacrificing Ratio = Old Ratio - New Ratio

2.

WN 3.

Calculation of O's Proportionate Capital

Solution Ex. 97

Revaluation Account
Dr.					Cr.
Particulars	Rs.	Particulars			Rs.
To Bad Debts A/c	1,000	By Loss on Revaluation :
			A's Capital A/c	750
			B's Capital A/c	250	1,000


	1,000				1,000

Partners' Capital Account
Dr.							Cr.
Particulars	A	B	C	Particulars	A	B	C
To Revaluation A/c	750	250		By Balance b/d	54,000	35,000
To Goodwill A/c	30,000	10,000		By Bank A/c			23,200
To Balance c/d	39,450	30,150	23,200	By Premium for Goodwill A/c	12,000	4,000
				By WCF A/c	3,000	1,000
				By IFF A/c	1,200	400
	70,200	40,400	23,200		70,200	40,400	23,200

Working Notes:

1.

Calculation of C's Capital

A's Adjusted Capital = 54,000 + 12,000 + 3,000 + 1,200 - 750 - 30,000 = Rs.39,450

B's Adjusted Capital = 35,000 + 4,000 + 1,000 + 400 - 250 -10,000 = Rs.30,150

C's Capital = Total Adjusted Capital of A and B ×Reciprocal of Combined Profit Share × C's Profit Share

Notes:

Premium for Goodwill Rs.16,000à Distributed between A and B in sacrificing ratio i.e. 3: 1.
Excess WCF of Rs.4,000à Shared in old ratio among old partners.
Excess IFF of Rs.1,600à Shared in old ratio among old partners.

Admission of a Partner Exercise 5.112

Solution Ex. 98

Revaluation Account
Dr.				Cr.
Particulars		Rs.	Particulars	Rs.
To Plant A/c		150	By Reserve for Doubtful Debts A/c (400- 100)	300
To Profit transferred to:			By Stock A/c	500
	Mohan Capital A/c	390
	Sohan Capital A/c	260

		800		800

Partners Capital Account
Dr.							Cr.
Particulars	A	B	C	Particulars	A	B	C
To Balance c/d	2,990	1,660		By Balance b/d	2,000	1,000
				By Revaluation A/c	390	260
				By Premium for Goodwill A/c	600	400
	2,990	1,660			2,990	1,660
				By Balance b/d	2,990	1,660
To Balance c/d	2,990	1,660	2,325	By Cash A/c			2,325

	2,990	1,660	2,325		2,990	1,660	2,325

Balance Sheet as on 31^st March 2019 after Rohan's admission
Liabilities			Rs.	Assets			Rs.
Capital				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

5.

Cash Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	650	By Balance c/d	3,975
To Rohan 's Capital A/c	2,325
To Premium for Goodwill A/c	1,000

	3,975		3,975

Solution Ex. 99

Revaluation Account
Dr.				Cr.
Particulars		Rs.	Particulars	Rs.
To Patents A/c		1,000	By Provision for Doubtful Debts A/c	2,000
To Profit transferred to:			By Typewriter A/c	2,400
	Pradeep Capital A/c	2,550
	Dhanraj Capital A/c	850

		4,400		4,400

Partners' Capital Account
Dr.							Cr.
Particulars	A	B	C	Particulars	A	B	C
To Balance c/d	90,550	24,850		By Balance b/d	60,000	20,000
				By Reserve Fund A/c	12,000	4,000
				By Revaluation A/c	2,550	850
				By Premium for Goodwill A/c	16,000

	90,550	24,850			90,550	24,850
To Balance c/d	90,550	24,850	69,240	By Balance b/d	90,550	24,850
				By Cash A/c			69,240
	90,550	24,850	69,240		90,550	24,850	69,240

Balance Sheet as on 31^st March 2019 after Leander's admission
Liabilities			Rs.	Assets			Rs.
Creditors			30,000	Debtors		50,000
Bills Receivable			1,000		Less: Prov. for Doubtful Debts	(3,000)	47,000
Outstanding Salary			3,000	Stock			30,000
Capital				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

5

Cash Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	4,000	By Balance c/d	89,240
To Leander 's Capital A/c	69,240
To Premium for Goodwill A/c	16,000

	89,240		89,240

Solution Ex. 100

Revaluation Account
Dr.				Cr.
Particulars		Rs.	Particulars	Rs.
To Profit transferred to:			By Building A/c ( 18,000- 8,000)	10,000
	X Capital A/c	8,400	By Stock A/c ( 16,000 - 12,000)	4,000
	Y Capital A/c	5,600

		14,000		14,000

Partners Capital Account
Dr.							Cr.
Particulars	X	Y	Z	Particulars	X	Y	Z
				By Balance b/d	10,000	8,000
To Balance c/d	39,200	20,800		By General Reserve A/c	9,600	6,400
				By Workmen's Compensation Fund A/c	1,200	800
				By Revaluation A/c (Profit)	8,400	5,600
				By Premium for Goodwill A/c	10,000

	39,200	20,800			39,200	20,800
To Balance c/d	39,200	20,800	12,000	By Balance b/d	39,200	20,800
				By Cash A/c			12,000

	39,200	20,800	12,000		39,200	20,800	12,000

Balance Sheet
As on 31^ST March 2019 after Z's admission
Liabilities			Rs.	Assets	Rs.
Capital A/c s:				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 W.C. C.			2,000

			86,000		86,000

2.

Treatment of Workmen Compensation Fund

Journal
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	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				1,200
	-------To Y's Capital A/c				800
	(Being outstanding workmen's compensation charges from the fund and remaining fund transferred to partner's capital in their old ratio)

4.

Calculation of Cash Balance

Cash Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	9,000	By Balance c/d	31,000
To Z's Capital A/c	12,000
To Premium for Goodwill A/c	10,000
	31,000		31,000

Admission of a Partner Exercise 5.113

Solution Ex. 102

Revaluation Account
Dr.				Cr.
Particular		Rs.	Particular	Rs.
To Stock A/c		31,000	By Land and Building A/c	1,00,000
To Profit transferred to:			By Provision for Doubtful Debts A/c	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 Account
Dr.				Cr.
Particular	A	B	C	Particular	A	B	C
To Goodwill A/c	20,400	13,600		By Balance b/d	1,76,000	2,54,000
To Advertisement A/c	6,000	4,000		By Bank A/c
To Suspense A/c				By P. for Goodwill A/c	96,000	48,000	3,06,000
To Balance c/d	3,62,400	3,51,600	3,06,000	By C's current A/c	64,000	32,000
				By Revaluation A/c	44,400	29,600
				By I.F.R. A/c	3,000	2,000
				By W.C.R. A/c	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.
Particular	Rs.	Particular	Rs.
To Balance b/d	2,50,000	By Balance c/d	7,00,000
To C's Capital A/c	3,06,000
To Premium for Goodwill A/c	1,44,000

	7,00,000		7,00,000

Balance sheet as on 1^st April ,2019 after C's admission

Liabilities		Rs.	Assets		Rs.
Workmen Compensation Reserve		11,000	Land and 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 D. Debts	(5,000)	95,000
		13,65,000			13,65,000

Working Notes:

1.

Old Ratio A and B = 3:2

New Ratio A,B and C = 4: 3:3

Sacrificing Ratio = Old Ratio - New Ratio

2. Calculation of Goodwill

Goodwill = Super Profit × No. of Years Purchase

= 4,00,000 × 2 = Rs.8,00,000

3.

Calculation of C's Capital

Solution Ex. 101

Revaluation Account
Dr.					Cr.
Particulars			Rs.	Particulars	Rs.
To Revaluation Profit :				By Land and Building A/c	42,000
	Kalpana's Capital A/c	61,200		By Plant A/c	60,000
	Kanika's Capital A/c	40,800	1,02,000

			1,02,000		1,02,000

Partners' Capital Account
Dr.							Cr.
Particulars	Kalpana	Kanika	Karuna	Particulars	Kalpana	Kanika	Karuna
To Balance c/d	6,49,200	3,22,800	2,43,000	By Balance b/d	4,80,000	2,10,000
				By Cash A/c			2,43,000
				By General Reserve A/c	36,000	24,000
				By W.C.F. A/c	24,000	16,000
				By Revaluation A/c	61,200	40,800
				By Premium for Goodwill A/c	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 1^st April 2019 after Karuna's admission
Liabilities			Rs.	Assets			Rs.
Creditors			90,000	Cash in Hand			4,53,000
Capital				Debtors		1,32,000
	Kalpana	6,49,200			Less: Provision for debts	(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

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Class 12-commerce T S GREWAL Solutions Accountancy Chapter 5: Admission of a Partner

Admission of a Partner Exercise 5.85

Solution Ex. 1

Solution Ex. 2

Solution Ex. 3

Solution Ex. 4

Solution Ex. 5

Solution Ex. 6

Admission of a Partner Exercise 5.86

Solution Ex. 7

Solution Ex. 8

Solution Ex. 9

Admission of a Partner Exercise 5.87

Solution Ex. 10

Solution Ex. 11

Solution Ex. 12

Solution Ex. 13

Solution Ex. 14

Solution Ex. 15

Solution Ex. 16

Solution Ex. 17

Solution Ex. 18

Solution Ex. 19

Solution Ex. 20

Solution Ex. 21

Solution Ex. 22

Solution Ex. 23

Solution Ex. 24

Solution Ex. 25

Admission of a Partner Exercise 5.88

Solution Ex. 26

Solution Ex. 27

Solution Ex. 28

Solution Ex. 29

Solution Ex. 30

Solution Ex. 31

Admission of a Partner Exercise 5.89

Solution Ex. 32

Solution Ex. 33

Solution Ex. 34

Solution Ex. 35

Solution Ex. 36

Solution Ex. 37

Solution Ex. 38

Admission of a Partner Exercise 5.90

Solution Ex. 39

Solution Ex. 40

Solution Ex. 41

Admission of a Partner Exercise 5.91

Solution Ex. 42

Solution Ex. 43

Solution Ex. 44

Solution Ex. 45

Solution Ex. 46

Solution Ex. 47

Solution Ex. 48

Solution Ex. 49

Admission of a Partner Exercise 5.92

Solution Ex. 50

Solution Ex. 51

Solution Ex. 52

Solution Ex. 54

Solution Ex. 55

Solution Ex. 53

Admission of a Partner Exercise 5.93

Solution Ex. 56

Solution Ex. 57

Solution Ex. 58

Solution Ex. 59

Solution Ex. 60

Admission of a Partner Exercise 5.94

Solution Ex. 61

Admission of a Partner Exercise 5.95

Solution Ex. 62

Solution Ex. 63

Solution Ex. 64

Admission of a Partner Exercise 5.96

Solution Ex. 65

Solution Ex. 66