Class 12-commerce T S GREWAL Solutions Accountancy Chapter 4: Change in Profit - Sharing Ratio Among the Existing Partners
Change in Profit - Sharing Ratio Among the Existing Partners Exercise 4.37
Solution Ex. 1
Old Ratio (A and B)=1:1
New Ratio (A and B)=4:3
Sacrificing Ratio (or Gaining)=Old Ratio - New Ratio
A's
Gain=1/14 and B's Sacrifice= 1/14
Solution Ex. 2
Solution Ex. 3
Solution Ex. 4
Calculation of New Profit Sharing Ratio
Case.1: C acquires 1/5th Share from A.
Case.2: C acquires 1/5th Share equally from A and B.
Case: 3 A, B and C will share future profits and losses equally.
Case: 4 C acquires 1/10th Share of A and 1/2 share of B.
Solution Ex. 5
(a) Goodwill Account is not opened
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Journal |
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Date |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
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C's Capital A/c |
Dr. |
3,000 |
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----------To A's capital A/c |
3,000 |
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(Being adjustment of goodwill made on change in profit sharing ratio) |
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(b) Goodwill Account is opened
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Journal |
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Sr. No. |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
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(i) |
Goodwill A/c |
Dr. |
|
18,000 |
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----------To A's capital A/c |
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|
9,000 |
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----------To B's capital A/c |
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|
6,000 |
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----------To C's capital A/c |
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|
3,000 |
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(Being the goodwill raised and distrusted old ratio) |
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(ii) |
A's capital A/c |
Dr. |
|
6,000 |
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B's capital A/c |
Dr. |
|
6,000 |
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C's capital A/c |
Dr. |
|
6,000 |
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----------To Goodwill A/c |
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|
18,000 |
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(Being the goodwill distrusted on new ratio) |
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Working Note:
Old Ratio (A,B and C)= 3:2:1
New Ratio (A,B and C)=1:1:1
Sacrificing (or Gaining ) Ratio = Old Ratio - New Ratio
Change in Profit - Sharing Ratio Among the Existing Partners Exercise 4.38
Solution Ex. 6
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Journal |
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Date |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
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|
Y's Capital A/c |
Dr. |
3,000 |
|||
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Z's Capital A/c |
Dr. |
12,000 |
|||
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---------- To X's Capital A/c |
15,000 |
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(Being amount of goodwill adjusted on change in profit sharing ratio) |
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Working Notes:
1.
Calculation of Sacrificing (or Gaining) Ratio
Old Ratio ( X,Y and Z) = 5:3:2
New Ratio ( X,Y and Z) = 1:1:1
Sacrificing (or Gaining) Ratio = Old Ratio - New Ratio
2.
Calculation of Goodwill
3.
Adjustment of Goodwill
Solution Ex.7
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Journal |
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Date |
Particulars |
|
L.F. |
Debit Rs. |
Credit Rs. |
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Abbas's Capital A/c |
Dr. |
|
60,000 |
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-------- To Mandeep's Capital A/c |
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|
60,000 |
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(Being adjustment entry made for change in ratio) |
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Working notes:
1.
Calculation of Sacrifice or Gain
Old Ratio between Mandeep, Vinod and Abbas = 3:2:1
New Ratio between Mandeep, Vinod and Abbas=1:1:1
Sacrificing ( or Gaining Ratio) = Old Ratio - New Ratio
2.
Valuation of Goodwill
Goodwill = Average Profit × No. of years Purchase
=1,20,000 × 3=Rs.3, 60,000
3.
Adjustment of Goodwill
Solution Ex. 8
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Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
|
|
X's Capital A/c |
Dr. |
6,000 |
|||
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Y's Capital A/c |
Dr. |
3,600 |
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Z's Capital A/c |
Dr. |
2,400 |
|||
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---------- To Goodwill A/c |
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|
12,000 |
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(Being goodwill written off) |
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Y's Capital A/c |
Dr. |
|
1,000 |
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Z's Capital A/c |
Dr. |
|
4,000 |
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----------To X's Capital A/c |
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|
5,000 |
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(Being amount of goodwill adjusted on change in profit sharing ratio) |
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Working Notes:
1.
Calculation of Sacrificing (or Gaining) Ratio
Old Ratio (X, Y and Z)=5:3:2
New Raito (X,Y and Z)= 1:1:1
Sacrificing (or Gaining ) Ratio = Old Ratio- New Ratio
2.
Old Goodwill Written off
3.
Adjustment of Goodwill
Solution Ex. 9
|
Journal |
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|
Date |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
|
|
A's Capital A/c |
Dr. |
6,000 |
|||
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----------To B's Capital A/c |
6,000 |
||||
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(Being adjustment of profit for 2017-18 on change in profit sharing ratio) |
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B's Capital A/c |
Dr. |
|
9,000 |
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----------To A's Capital A/c |
|
|
|
9,000 |
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|
(Being adjustment of goodwill made on change in profit sharing ratio) |
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Partner's Capital Accounts |
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|
Dr |
|
Cr |
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Particulars |
A |
B |
Particulars |
A |
B |
|
To B's Capital A/c |
6,000 |
By Balance b/d |
1,50,000 |
90,000 |
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|
----(Adjustment of profit) |
By A's Capital A/c |
6,000 |
|||
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To A's Capital A/c |
|
9,000 |
----(Adjustment Profit) |
||
|
----(Adjustment of Goodwill) |
By B's Capital A/c |
9,000 |
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To Balance c/d |
1,53,000 |
87,000 |
----(Adjustment of Goodwill) |
||
|
1,59,000 |
96,000 |
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1,59,000 |
96,000 |
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Working Notes:
1.
Calculation of Sacrificing (or Gaining) Ratio
Old Ratio (A and B)=2:1
New Ratio (A and B)=3:2
Sacrificing (or Gaining) Ratio=Old Ratio-New Ratio
2.
Adjustment of Profits for 2016-17
3.
Calculation of New Goodwill
Goodwill
= Profit of (2016-17)+ Profit of (2017-18)
= 60,000+75,000
=Rs.1,35,000
4.
Adjustment of Goodwill
Solution Ex. 10
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Journal |
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Date |
Particulars |
L.F. |
Debit Amount (Rs.) |
Credit Amount (Rs.) |
|
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Raj's Capital A/c |
Dr. |
|
7,500 |
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----To Jai's Capital A/c |
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|
7,500 |
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(Being adjustment for goodwill) |
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Working Notes:
Calculation of Gaining/Sacrificing Ratio
Sacrificing Ratio = Old Ratio ─ New Ratio
Goodwill to be adjusted = 1,00,000 ─ 25,000 = 75,000
Solution Ex. 11
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Journal |
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Date |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
|
|
Profit andLoss A/c |
Dr. |
1,50,000 |
|||
|
---------- To X's Capital A/c |
90,000 |
||||
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---------- To Y's Capital A/c |
60,000 |
||||
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|
(Being adjustment of balance in PandL A/c in old ratio) |
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Working Notes:
1.
Calculation of Share of Profit and Loss A/c
Change in Profit - Sharing Ratio Among the Existing Partners Exercise 4.39
Solution Ex. 12
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Journal |
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Date |
Particulars |
|
L.F. |
Debit Rs. |
Credit Rs. |
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A's Capital A/c |
Dr. |
|
80,000 |
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B's Capital A/c |
Dr. |
|
20,000 |
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-------- To Profit and Loss A/c |
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|
1,00,000 |
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(Being Profit and Loss distributed) |
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Solution Ex. 13
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Journal |
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Date |
Particulars |
|
L.F. |
Debit Rs. |
Credit Rs. |
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Z's Capital A/c |
Dr. |
|
5,400 |
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-------- To X's Capital A/c |
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|
5,400 |
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(Being adjustment for General Reserve, Profit and Loss account and Advertisement Suspense account made on change in PSR) |
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Working notes :
1.
Net amount to be adjusted = General Reserve + Profit and Loss A/c (Credit) - Adjustment Suspense A/c
Net amount to be adjustment = 6,000 + 24,000 - 12000 =Rs.18,000
2.
Calculation of Sacrificing (or Gaining) Ratio
Old Ratio (X, Y and Z) = 5: 3: 2
New Ratio (X, Y and Z) = 2: 3: 5
Sacrificing (or gaining) Ratio = old Ratio - New Ratio
Solution Ex. 14
Case : (i) and (ii)
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Journal |
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Date |
Particulars |
|
L.F. |
Debit Rs. |
Credit Rs. |
|
|
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|
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|
|
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Workmen Compansation Reserve A/c |
Dr. |
|
1,20,000 |
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-------- To A's Capital A/c |
|
|
|
60,000 |
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-------- To B's Capital A/c |
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|
36,000 |
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------- To C's Capital A/c |
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|
24,000 |
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(Being Workmen Compensation Reserve distributed) |
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Note: Workmen Compensation Reserve should be distributed in the old ratio i.e. 5:3:2 in both the cases (i) and (ii).
Solution Ex. 15
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Journal |
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|
Date |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
|
|
|
Workmen Compensation Reserve A/c |
Dr. |
|
40,000 |
|
|
|
---------- To X's Capital A/c |
|
|
|
20,000 |
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---------- To Y's Capital A/c |
|
|
|
12,000 |
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---------- To Z's Capital A/c |
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|
8,000 |
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(Being adjustment of balance in workmen composition reserve account in old ratio) |
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Working Notes:
Calculation of Share (Workmen Compensation Reserve)
Solution Ex. 16
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Journal |
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Sr. No. |
Particulars |
|
L.F. |
Debit Rs. |
Credit Rs. |
|
|
|
|
|
|
|
|
(i) |
Workmen Compensation Reserve A/c |
Dr. |
|
1,20,000 |
|
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|
Revaluation A/c |
Dr. |
|
30,000 |
|
|
|
--------- To Provision for W.C. Claim A/c |
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|
1,50,000 |
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(Being provision created and shortfall charged to Revaluation account) |
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(ii) |
X's Capital A/c |
Dr. |
|
15,000 |
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Y's Capital A/c |
Dr. |
|
9,000 |
|
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Z's Capital A/c |
Dr. |
|
6,000 |
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-------- To Revaluation A/c |
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|
30,000 |
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(Being loss on revaluation transferred to Partner's Capital account) |
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Solution Ex. 17
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
|
|
Investment Fluctuation Reserve A/c |
Dr. |
5,000 |
|||
|
-------- To Investment A/c |
5,000 |
||||
|
|
(Being adjustment for decrease in the value of investments) |
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|
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Investment Fluctuation Reserve A/c |
Dr. |
|
15,000 |
|
|
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-------- To A's Capital A/c |
|
|
|
7,500 |
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-------- To B's Capital A/c |
|
|
|
4,500 |
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-------- To C's Capital A/c |
|
|
|
3,000 |
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(Being adjustment of balance in Investment Fluctuation Reserve A/c in old ratio) |
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Working Notes:
Calculation of Share of Investment Fluctuation Reserve
Solution Ex. 18
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Journal |
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Sr. No. |
Particulars |
|
L.F. |
Debit Rs. |
Credit Rs. |
|
|
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|
|
|
|
(i) |
Investment Fluctuation Reserve A/c |
Dr. |
|
60,000 |
|
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|
-------- To Nitin's Capital A/c |
|
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|
20,000 |
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-------- To Tarun's Capital A/c |
|
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|
20,000 |
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-------- To Amar's Capital A/c |
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|
20,000 |
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(Being Investment Fluctuation Reserve distributed) |
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(ii) |
Investment Fluctutation Reserve A/c |
Dr. |
|
60,000 |
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-------- To Nitin's Capital A/c |
|
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|
20,000 |
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-------- To Tarun's Capital A/c |
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|
20,000 |
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-------- To Amar's Capital A/c |
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20,000 |
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(Being Investment Fluctuation Reserve distributed) |
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(iii) |
Investment Fluctutation Reserve A/c |
Dr. |
|
60,000 |
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-------- To Nitin's Capital A/c |
|
|
|
20,000 |
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-------- To Tarun's Capital A/c |
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|
20,000 |
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-------- To Amar's Capital A/c |
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|
20,000 |
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(Being Investment Fluctuation Reserve distributed) |
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Investments A/c |
Dr. |
|
24,000 |
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--------- To Revaluation A/c |
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|
24,000 |
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(Being investment revalued) |
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Revaluation A/c |
Dr. |
|
24,000 |
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|
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-------- To Nitin's Capital A/c |
|
|
|
8,000 |
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|
-------- To Tarun's Capital A/c |
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|
8,000 |
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-------- To Amar's Capital A/c |
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|
8,000 |
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(Being revaluation profit transferred to partners' Capital A/c) |
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(iv) |
Investment Fluctuation Reserve A/c |
Dr. |
|
60,000 |
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|
|
------- To Investment A/c |
|
|
|
30,000 |
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|
-------- To Nitin's Capital A/c |
|
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|
10,000 |
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-------- To Tarun's Capital A/c |
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|
10,000 |
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-------- To Amar's Capital A/c |
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|
10,000 |
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(Being investment Fluctuation Reserve distributed) |
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(v) |
Investment Fluctuation Reserve A/c |
Dr. |
|
60,000 |
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|
Revaluation A/c |
Dr. |
|
30,000 |
|
|
|
--------- To Investment A/c |
|
|
|
90,000 |
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|
(Being decrease in investment set off against IFR and balance debited to Revaluation A/c) |
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Nitin's Capital A/c |
Dr. |
|
10,000 |
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Tarun's Capital A/c |
Dr. |
|
10,000 |
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Amar's Capital A/c |
Dr. |
|
10,000 |
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--------- To Revaluation A/c |
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|
|
30,000 |
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(Being loss on revaluation transferred to Partner's Capital |
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Change in Profit - Sharing Ratio Among the Existing Partners Exercise 4.40
Solution Ex. 19
Case:(i) If General Reserves are not to be shown in the new Balance Sheet
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Journal |
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Date |
Particulars |
|
L.F. |
Debit Rs. |
Credit Rs. |
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General Reserve A/c |
Dr. |
|
60,000 |
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-------- To X's Capital A/c (2/3rd) |
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|
40,000 |
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-------- To Y's Capital A/c (1/3rd) |
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|
20,000 |
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(Being adjustment of balance in General Reserve account in old ratio) |
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Case: (ii) If General Reserves are to be shown in the new Balance sheet
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Journal |
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Date |
Particulars |
|
L.F. |
Debit Rs. |
Credit Rs. |
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|
|
|
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|
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Y's Capital A/c |
Dr. |
|
4,000 |
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-------- To X's Capital A/c |
|
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|
4,000 |
|
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(Being balance in General Reserve A/c adjusted in sacrificing gaining ratio) |
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Working notes :
1.
Calculation of Gain/sacrifice
Sacrificing Ratio = Old Ratio - New Ratio
2.
Calculation of Compensation by Y to X
Solution Ex. 20
In the books of the firm
JOURNAL
|
Date |
Particulars |
L.F. |
Debit (Rs.) |
Credit (Rs.) |
|
2018 Mar, 31 |
Investment Fluctuation Fund A/c …Dr. To Investment A/c To Bhavya's Capital A/c To Sakshi's Capital A/c (Being the excess fund distributed amongst partners after making adjustments for fluctuations in market value of the Investment) |
|
20,000 |
10,000 6,000 4,000 |
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Sakshi's Capital A/c …Dr. To Bhavya's Capital A/c (Being adjustment made for Goodwill between partners on account of change in profit sharing ratio between the partners) |
|
2,400 |
2,400 |
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Sakshi's Capital A/c …Dr. To Bhavya's Capital A/c (Being adjustment made for General Reserve among the partners without writing it off) |
|
2,340 |
2,340 |
Working Notes: Calculation of Sacrificing and Gaining Ratios
Solution Ex. 21
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
|
|
Z's Capital A/c |
Dr. |
760 |
|||
|
---------- To X's Capital A/c |
760 |
||||
|
|
(Being adjustment of revaluation profit made) |
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|
|
Working Notes:
1.
Calculation of Net Profit or Loss on Revaluation
|
Particulars |
(Rs.) |
|
Increase in Investment |
3,000(Cr.) |
|
Increase in Land and Building |
10,000(Cr.) |
|
Decrease in Trade Creditors |
10,000(Cr.) |
|
Less: Decrease in Sundry Debtors |
(10,000)(Dr.) |
|
Less: Decrease in Plant and Machinery |
(5,000)(Dr.) |
|
Less: Increase in Outstanding Expenses |
(400)(Dr.) |
|
Profit on Revaluation |
7,600(Cr.) |
2 Calculation of Sacrificing (or Gaining) Ratio:
Old Ratio (X,Y and Z)= 5:3:2
New Ratio (X,Y and Z)=4:3:3
Sacrificing (or Gaining ) Ratio = Old Ratio - New Ratio
3 Adjustment of Revaluation Profit
Solution Ex. 22
|
Journal |
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Date |
Particulars |
|
L.F. |
Debit Rs. |
Credit Rs. |
|
|
|
|
|
|
|
|
|
General Reserve A/c |
Dr. |
|
90,000 |
|
|
|
-------- To Ashish's Capital A/c |
|
|
|
30,000 |
|
|
-------- To Akash's Capital A/c |
|
|
|
30,000 |
|
|
-------- To Amit's Capital A/c |
|
|
|
30,000 |
|
|
(Being reserves distributed) |
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Ashish's Capital A/c |
Dr. |
|
2,000 |
|
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Akash's Capital A/c |
Dr. |
|
2,000 |
|
|
|
Amit's Capital A/c |
Dr. |
|
2,000 |
|
|
|
-------- To Advertisement Suspense A/c |
|
|
|
6,000 |
|
|
(Being advertisement Suspense Distributed) |
|
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|
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|
Revaluation A/c |
Dr. |
|
54,000 |
|
|
|
-------- To Stock A/c |
|
|
|
15,000 |
|
|
-------- To Machinery A/c |
|
|
|
25,000 |
|
|
-------- To Provision Doubtful Debts A/c |
|
|
|
4,000 |
|
|
-------- To Akash's Capital A/c |
|
|
|
10,000 |
|
|
(Being assets revalued) |
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|
|
|
|
|
|
|
|
|
|
Land and Building A/c |
Dr. |
|
62,000 |
|
|
|
-------- To Revaluation A/c |
|
|
|
62,000 |
|
|
(Being assets revalued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
8,000 |
|
|
|
-------- To Ashish's Capital A/c |
|
|
|
2,666 |
|
|
-------- To Akash's Capital A/c |
|
|
|
2,667 |
|
|
-------- To Amit's Capital A/c |
|
|
|
2,667 |
|
|
(Being profits distributed) |
|
|
|
|
|
|
|
|
|
|
|
Change in Profit - Sharing Ratio Among the Existing Partners Exercise 4.41
Solution Ex. 23
|
Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit Rs. |
Credit Rs. |
|
|
|
|
|
|
|
|
|
General Reserve A/c |
Dr. |
|
60,000 |
|
|
|
-------- To A's Capital A/c |
|
|
|
30,000 |
|
|
-------- To B's Capital A/c |
|
|
|
18,000 |
|
|
-------- To C's Capital A/c |
|
|
|
12,000 |
|
|
(Being reserve distributed) |
|
|
|
|
|
|
|
|
|
|
|
|
|
A's Capital A/c |
Dr. |
|
2,500 |
|
|
|
B's Capital A/c |
Dr. |
|
1,500 |
|
|
|
C's Capital A/c |
Dr. |
|
1,000 |
|
|
|
-------- To Advertisement Suspense A/c |
|
|
|
5,000 |
|
|
(Being advertisement Suspense distributed) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Fluctuation Reserve A/c |
Dr. |
|
30,000 |
|
|
|
-------- To Investment A/c |
|
|
|
10,000 |
|
|
-------- To A's Capital A/c |
|
|
|
10,000 |
|
|
-------- To B's Capital A/c |
|
|
|
6,000 |
|
|
-------- To C's Capital A/c |
|
|
|
4,000 |
|
|
(Being Investment Fluctuation Reserve distributed) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery A/c |
Dr. |
|
12,000 |
|
|
|
Motorcycle A/c |
Dr. |
|
20,000 |
|
|
|
Creditors A/c |
Dr. |
|
10,000 |
|
|
|
-------- To Revaluation A/c |
|
|
|
42,000 |
|
|
(Being the assets revalued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
25,000 |
|
|
|
-------- To Land and Building A/c |
|
|
|
17,500 |
|
|
-------- To Provision for Doubtful Debts A/c |
|
|
|
2,500 |
|
|
-------- To Bank A/c (Remuneration) |
|
|
|
5,000 |
|
|
(Being the assets revalued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
17,000 |
|
|
|
-------- To A's Capital A/c |
|
|
|
8,500 |
|
|
-------- To B's Capital A/c |
|
|
|
5,100 |
|
|
-------- To C's Capital A/c |
|
|
|
3,400 |
|
|
(Being profit on revaluation transferred to Partner's Capital A/c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
B's Capital A/c |
Dr. |
|
10,000 |
|
|
|
C's Capital A/c |
Dr. |
|
40,000 |
|
|
|
-------- To A's Capital A/c |
|
|
|
50,000 |
|
|
(Being goodwill adjusted) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation Account |
|||||
|
Dr. |
|
|
Cr. |
||
|
Particulars |
|
Rs. |
Particulars |
Rs. |
|
|
To Land and Building A/c |
|
17,500 |
By Machinery A/c |
12,000 |
|
|
To Provision for Doubtful Debts A/c |
|
2,500 |
By Motorcycle A/c |
20,000 |
|
|
To Bank A/c (Remuneration) |
|
5,000 |
By Creditors A/c |
10,000 |
|
|
To Profit transferred to |
|
|
|
|
|
|
|
A A/c |
8,500 |
|
|
|
|
|
B A/c |
5,100 |
|
|
|
|
|
C A/c |
3,400 |
17,000 |
|
|
|
|
42,000 |
|
42,000 |
||
|
|
|
|
|
||
Working Notes :
1.
Calculation of sacrifice or gain
Old Ratio between A, B and C = 5:3:2
New Ratio between A, B and C = 1:1:1
Sacrificing (or Gaining Ratio) = Old Ratio - New Ratio
2.
Valuation of Goodwill
Goodwill = Average profit × No. of year's Purchase
= 1,50,000 × 2 = Rs.3,00,000
3.
Adjustment of Goodwill
Change in Profit - Sharing Ratio Among the Existing Partners Exercise 4.42
Solution Ex. 24
|
Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit Rs. |
Credit Rs. |
|
|
|
|
|
|
|
|
|
A' s Capital A/c |
|
|
3,000 |
|
|
|
-------- To B's Capital A/c |
|
|
|
3,000 |
|
|
(Adjustment entry made for change in ratio) |
|
|
|
|
|
|
|
|
|
|
|
Working Notes :
1.
Calculation of Sacrifice or Gain
Old Ratio between A, B and C- 2:2:1
New Ratio between A, B and C- 5:3:2
Sacrificing (or Gaining Ratio) = Old Ratio - New Ratio
Adjustment Entry
2.
Calculation of Profit or Loss on Revaluation
|
Revaluation Account |
|||
|
Dr. |
|
|
Cr. |
|
Particulars |
Rs. |
Particulars |
Rs. |
|
To Computers A/c |
25,000 |
By Machinery A/c |
50,000 |
|
To Outstanding expenses A/c |
10,000 |
By Creditors A/c |
15,000 |
|
To Profit on Revaluation A/c |
30,000 |
|
|
|
|
|
|
|
|
|
65,000 |
|
65,000 |
|
|
|
|
|
Solution Ex. 25
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
|
|
X's Capital A/c |
Dr. |
15,000 |
|||
|
Y's Capital A/c |
Dr. |
5,000 |
|||
|
|
---------- To Z's Capital A/c |
|
|
|
20,000 |
|
|
(Being adjustment made for Goodwill, General Reserve and Profit and Loss A/c on change in PSR) |
|
|
|
|
|
New Balance Sheet (i.e. after change in PSR) |
|||||
|
Liabilities |
Rs. |
Assets |
Rs. |
||
|
Capital |
Sundry Assets |
7,00,000 |
|||
|
|
X |
1,95,000 |
|||
|
|
Y |
1,45,000 |
|||
|
|
Z |
1,40,000 |
4,80,000 |
||
|
General Reserve |
65,000 |
||||
|
Profit and Loss A/c |
25,000 |
||||
|
Creditors |
1,30,000 |
||||
|
|
|||||
|
|
7,00,000 |
7,00,000 |
|||
|
|
|
|
|||
Working Notes:
1.
Calculation of Sacrificing (or Gaining ) Ratio
Old Ratio between X, Y and Z- 7:5:4
New Ratio between X, Y and Z- 3:2:1
Sacrificing (or Gaining) Ratio= Old Ratio - New Ratio
2.
Adjustment of General Reserve, Profit and Loss Account and Goodwill
Total Amount for Adjustment= General Reserve+ Profit and Loss Account + Goodwill
= 65,000+25,000+1,50,000=Rs.2,40,000
3.
|
Partners Capital Accounts |
|||||||
|
Dr |
|
|
|
Cr |
|||
|
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
|
To Z's Capital A/c |
15,000 |
5,000 |
|
By Balance B/d |
2,10,000 |
1,50,000 |
1,20,000 |
|
To Balance c/d |
1,95,000 |
1,45,000 |
1,40,000 |
By X's Capital A/c |
|
15,000 |
|
|
|
By Y's Capital A/c |
|
5,000 |
||||
|
|
|
|
|||||
|
2,10,000 |
1,50,000 |
1,40,000 |
2,10,000 |
1,50,000 |
1,40,000 |
||
|
|
|
|
|
|
|||
Solution Ex. 26
|
Revaluation Account |
|||||
|
Dr. |
|
|
Cr. |
||
|
Particulars |
Rs. |
Particulars |
Rs. |
||
|
To Building A/c |
3,000 |
By Land A/c |
30,000 |
||
|
To Revaluation profit |
|
By Creditors A/c |
6,000 |
||
|
|
A's A/c |
16,500 |
|
|
|
|
|
B's A/c |
11,000 |
|
|
|
|
|
C's A/c |
5,500 |
33,000 |
|
|
|
|
|
|
|
||
|
|
36,000 |
|
36,000 |
||
|
|
|
|
|
||
|
Partner's Capital Account |
||||||||
|
Dr. |
Cr. |
|||||||
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
|
To A's Capital A/c |
|
|
25,000 |
By Balance b/d |
1,00,000 |
50,000 |
25,000 |
|
|
To Balance c/d |
1,56,500 |
71,000 |
10,500 |
By R/v Profit A/c |
16,500 |
11,000 |
5,500 |
|
|
|
|
|
|
By General Reserve A/c |
15,000 |
10,000 |
5,000 |
|
|
|
|
|
|
By C's Capital A/c |
25,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,56,500 |
71,000 |
35,500 |
|
1,56,500 |
71,000 |
35,500 |
|
|
Balance Sheet as on 31st March 2015 |
|||||
|
Liabilities |
|
Rs. |
Assets |
|
Rs. |
|
Capital: |
|
|
Land |
50,000 |
|
|
----A |
1,56,500 |
|
Add: Increase |
30,000 |
80,000 |
|
----B |
71,000 |
|
Building |
50,000 |
|
|
----C |
10,500 |
2,38,000 |
Less: Depreciation |
(3,000) |
47,000 |
|
Creditors |
50,000 |
|
Plant |
|
1,00,000 |
|
Less: Written off |
(6,000) |
44,000 |
Bank |
|
5,000 |
|
Bills Payable |
|
20,000 |
Stock |
|
40,000 |
|
|
|
|
Debtors |
|
30,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,02,000 |
|
|
3,02,000 |
Working Note
Old Ratio : 3:2:1
New Ratio: 1:1:1
|
C will compensate A: |
|||||
|
|
C's Capital A/c |
Dr. |
|
25,000 |
|
|
|
-------- To A's Capital A/c |
|
|
|
25,000 |
Change in Profit - Sharing Ratio Among the Existing Partners Exercise 4.43
Solution Ex. 27
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
|
|
A's Capital A/c |
Dr. |
4,000 |
|||
|
-------- To B's Capital A/c |
|
4,000 |
|||
|
|
(Being adjustment of General Reserve on change in PSR) |
|
|
|
|
|
|
|
|
|
|
|
|
Partners Capital Accounts |
|||||
|
Dr |
|
|
Cr |
||
|
Particulars |
A |
B |
Particulars |
A |
B |
|
To B's Capital A/c |
4,000 |
|
By Balance b/d |
2,40,000 |
1,20,000 |
|
To Balance c/d |
2,54,000 |
1,37,500 |
By Revaluation A/c |
18,000 |
13,500 |
|
|
By A's Capital A/c |
|
4,000 |
||
|
|
|
|
|||
|
2,58,000 |
1,37,500 |
2,58,000 |
1,37,500 |
||
|
|
|
|
|
||
|
Balance Sheet |
||||||
|
Liabilities |
` |
Assets |
|
Rs. |
||
|
Sundry Creditors(28,000 - 3,700) |
24,300 |
Cash |
|
20,000 |
||
|
General Reserve |
42,000 |
Sundry Debtors |
1,20,000 |
|||
|
Capital |
Less: Provision for Doubtful Debts |
(7,200) |
1,12,800 |
|||
|
|
A |
2,54,000 |
Stock |
|
1,90,000 |
|
|
|
B |
1,37,500 |
3,91,500 |
Fixed Assets(1,50,000 - 15,000) |
|
1,35,000 |
|
|
|
|||||
|
|
4,57,800 |
|
4,57,800 |
|||
|
|
|
|
|
|||
Working Notes:
1.
Calculation of Sacrificing (or Gaining) Ratio
Old Ratio between A and B= 4:3
New Ratio between A and B = 2:1
Sacrificing (or Gaining) Ratio = Old Ratio - New Ratio
2.
Adjustment of General Reserve
3.
|
Revaluation Account |
|||||
|
Dr |
|
|
Cr |
||
|
Particulars |
|
Rs. |
Particulars |
Rs. |
|
|
To Fixed Assets A/c |
|
15,000 |
By Stock A/c |
50,000 |
|
|
To Provision
for Doubtful Debts A/c (1,20,000 |
|
7,200 |
By Creditors A/c |
3,700 |
|
|
To Profit transfer to: |
|
|
|
||
|
A's Capital A/c |
18,000 |
|
|
||
|
B's Capital A/c |
13,500 |
31,500 |
|
||
|
|
53,700 |
53,700 |
|||
|
|
|
|
|
||
Solution Ex. 28
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
|
|
X's Capital A/c |
Dr. |
2,500 |
|||
|
---------- To Z's Capital A/c |
2,500 |
||||
|
|
(Being revaluation profit and General reserve adjusted on change in profit sharing ratio) |
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet |
||||
|
Dr |
|
|
Cr |
|
|
Liabilities |
|
Rs. |
Assets |
Rs. |
|
Sundry Creditors |
|
40,000 |
Cash at Bank |
40,000 |
|
Outstanding Expenses |
|
15,000 |
Sundry Debtors |
2,10,000 |
|
General Reserve |
|
75,000 |
Stock |
3,00,000 |
|
Capital A/c |
|
|
Furniture |
60,000 |
|
X |
3,97,500 |
|
Plant and Machinery |
4,20,000 |
|
Y |
3,00,000 |
|
|
|
|
Z |
2,02,500 |
9,00,000 |
|
|
|
|
10,30,000 |
10,30,000 |
||
|
|
|
|
|
|
Working Notes:
1.
Calculation of Sacrificing (or Gaining) Ratio
Old Ratio between X, Y and Z = 5:4:3
Old Ratio between X, Y and Z = 4:3:2
Sacrificing (or Gaining) Ratio= Old Ratio - New Ratio
2.
Calculation of Profit or Loss on Revaluation
|
Particulars |
Amount (Rs.) |
|
Increase in Stock |
60,000 (Cr.) |
|
Less: Decrease Furniture |
12,000 (Dr.) |
|
Less: Decrease in Plant and Machinery |
20,000 (Dr.) |
|
Less: Increase in Outstanding Expenses |
13,000 (Dr.) |
|
Profit on Revaluation |
15,000(Cr.) |
3.
Adjustment of Profit on Revaluation and General Reserve
Amount for Adjustment = Profit on Revaluation + General Reserve = 15,000+75,000= Rs 90,000
4.
|
Partner's Capital Accounts |
|||||||
|
Dr |
|
|
|
Cr |
|||
|
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
|
To Z's Capital A/c |
2,500 |
|
By Balance B/d |
4,00,000 |
3,00,000 |
2,00,000 |
|
|
To Balance c/d |
3,97,500 |
3,00,000 |
2,02,500 |
By X's Capital A/c |
|
2,500 |
|
|
|
|
|
|||||
|
|
|
|
|||||
|
4,00,000 |
3,00,000 |
2,02,500 |
4,00,000 |
3,00,000 |
2,02,500 |
||
|
|
|
|
|
||||
Change in Profit - Sharing Ratio Among the Existing Partners Exercise 4.44
Solution Ex. 29
|
Revaluation Account |
|||||
|
Dr. |
|
|
Cr. |
||
|
Particulars |
|
Rs. |
Particulars |
Rs. |
|
|
To Profit transferred to: |
|
|
By Machinery A/c |
7,000 |
|
|
X's Capital A/c |
5,000 |
|
By Stock A/c |
1,000 |
|
|
Y's Capital A/c |
3,000 |
8,000 |
|
||
|
|
8,000 |
8,000 |
|||
|
Partner's Capital Account |
|||||
|
Dr |
|
Cr |
|||
|
Particulars |
X |
Y |
Particulars |
X |
Y |
|
To Advertisement Suspense A/c |
500 |
300 |
By Balance b/d |
52,000 |
54,000 |
|
To Goodwill A/c |
5,000 |
3,000 |
By General Reserve A/c |
3,000 |
1,800 |
|
To X's Capital A/c |
3,000 |
By WCF A/c |
2,500 |
1,500 |
|
|
To Balance c/d |
60,000 |
54,000 |
By Revaluation A/c (Profit) |
5,000 |
3,000 |
|
By Y's Capital A/c |
3,000 |
|
|||
|
65,500 |
60,300 |
65,500 |
60,300 |
||
|
|
|
||||
|
New Balance Sheet as on 1st April 2019 (after Change in Profit Sharing Ratio) |
|||
|
Liabilities |
Rs. |
Assets |
Rs. |
|
X's Capital |
60,000 |
Machinery |
45,000 |
|
Y's Capital |
54,000 |
Furniture |
15,000 |
|
Sundry Creditors |
5,000 |
Sundry Debtors |
33,000 |
|
Employee's Provident Fund |
1,000 |
Stock |
8,000 |
|
Workmen Compensation Reserve |
6,000 |
Bank |
25,000 |
|
|
|||
|
|
1,26,000 |
1,26,000 |
|
|
|
|
||
Working Notes:
1.
Calculation of Sacrificing (or Gaining) Ratio
Old Ratio (X and Y)= 5:3
New Ratio (X and Y) = 3:5
Sacrificing (or Gaining) Ratio= Old Ratio - New Ratio
2.
Calculation of Goodwill
Goodwill= Average Profit 
No. of Years Purchase
3.
Adjustment of Goodwill
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit Rs. |
Credit Rs. |
|
|
Workmen's Compensation Reserve A/c |
Dr. |
10,000 |
|||
|
---------- To Workmen's Compensation Claim A/c |
6,000 |
||||
|
|
---------- To X's Capital A/c |
|
|
|
2,500 |
|
|
---------- To Y's Capital A/c |
|
|
|
1,500 |
|
|
(Being workmen's compensation claim distributed among partners in their old ratio i.e.5:3) |
|
|
|
|
|
|
X's Capital A/c |
Dr. |
|
5,000 |
|
|
|
Y's Capital A/c |
Dr. |
|
3,000 |
|
|
|
---------- To Goodwill A/c |
|
|
|
8,000 |
|
|
(Being goodwill written off among partners in their old ratio) |
|
|
|
|
|
|
X's Capital A/c |
Dr. |
|
500 |
|
|
|
Y's Capital A/c |
Dr. |
|
300 |
|
|
|
---------- To Advertisement suspense A/c |
|
|
|
800 |
|
|
(Being advertisement suspense written off among partners in their old ratio) |
|
|
|
|
|
|
General Reserve A/c |
Dr. |
|
4,800 |
|
|
|
---------- To X's Capital A/c |
|
|
|
3,000 |
|
|
---------- To Y's Capital A/c |
|
|
|
1,800 |
|
|
(Being general reserve distributed among partners in their old ratio) |
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
8,000 |
|
|
|
---------- To X's Capital A/c |
|
|
|
5,000 |
|
|
---------- To Y's Capital A/c |
|
|
|
3,000 |
|
|
(Being revaluation profit distributed among partners in their old ratio) |
|
|
|
|
|
|
Y's Capital A/c |
Dr. |
|
3,000 |
|
|
|
---------- To X's Capital A/c |
|
|
|
3,000 |
|
|
(Being adjustment of goodwill made ) |
|
|
|
|
Solution Ex. 30
|
Revaluation Account |
||||
|
Dr. |
Cr. |
|||
|
Particulars |
(Rs.) |
Particulars |
(Rs.) |
|
|
Provision for Workmen Compensation Claim |
30,000 |
Revaluation Loss |
||
|
Ram's Capital A/c |
12,000 |
|||
|
Mohan's Capital A/c |
9,000 |
|||
|
Sohan's Capital A/c |
6,000 |
|||
|
Hari's Capital A/c |
3,000 |
30,000 |
||
|
30,000 |
30,000 |
|||
|
Partners' Capital Account |
|||||||||
|
Dr. |
Cr. |
||||||||
|
Particulars |
Ram |
Mohan |
Sohan |
Hari |
Particulars |
Ram |
Mohan |
Sohan |
Hari |
|
Revaluation A/c |
12,000 |
9,000 |
6,000 |
3,000 |
Balance b/d |
4,00,000 |
4,50,000 |
2,50,000 |
2,00,000 |
|
Ram's Capital A/c |
13,500 |
40,500 |
Sohan's Capital A/c |
13,500 |
4,500 |
||||
|
Mohan's Capital A/c |
4,500 |
13,500 |
Hari's Capital A/c |
40,500 |
13,500 |
||||
|
Current A/c |
3,15,000 |
2,05,000 |
Current A/c |
1,55,000 |
3,65,000 |
||||
|
Balance c/d |
1,27,000 |
2,54,000 |
3,81,000 |
5,08,000 |
|||||
|
4,54,000 |
4,68,000 |
4,05,000 |
5,65,000 |
4,54,000 |
4,68,000 |
4,05,000 |
5,65,000 |
||
|
Balance Sheet |
|||||
|
Liabilities |
Amount (Rs.) |
Assets |
Amount (Rs.) |
||
|
Capital A/c |
Fixed Assets |
9,00,000 |
|||
|
Ram |
1,27,000 |
Current Assets |
5,20,000 |
||
|
Mohan |
2,54,000 |
Current A/c |
|||
|
Sohan |
3,81,000 |
Ram |
3,15,000 |
||
|
Hari |
5,08,000 |
12,70,000 |
Mohan |
2,05,000 |
5,20,000 |
|
Current A/c |
|||||
|
Sohan |
1,55,000 |
||||
|
Hari |
3,65,000 |
5,20,000 |
|||
|
Claim against WCF |
1,50,000 |
||||
|
19,40,000 |
19,40,000 |
||||
Working Notes
WN1: Calculation of Gaining/Sacrificing Ratio
(a) Sohan will compensate Ram and Mohan in the ratio 3 : 1
(b) Hari will compensate Ram and Mohan in the ratio of 3 : 1
Adjustment for Goodwill
|
Sohan's Capital A/c |
Dr. |
18,000 |
||
|
Hari's Capital A/c |
Dr. |
54,000 |
||
|
------To Ram's Capital A/c |
54,000 |
|||
|
------To Mohan's Capital A/c |
18,000 |
|||
|
(Sohan and Hari will compensate Ram and Mohan in their gaining ratio) |
WN2: Calculation of Adjusted Capital
Ram = 4,54,000 - 12,000 = Rs.4,42,000
Mohan = 4,68,000 - 9,000 = Rs.4,59,000
Sohan = 2,50,000 - 24,000 = Rs.2,26,000
Hari = 2,00,000 - 57,000 = Rs.1,43,000
Total Combined Capital = 12,70,000
WN3: Calculation of New Capital
Change in Profit - Sharing Ratio Among the Existing Partners Exercise 4.45
Solution Ex. 31
|
Revaluation Account |
||||
|
Dr. |
Cr. |
|||
|
Particulars |
(Rs.) |
Particulars |
(Rs.) |
|
|
Depreciation on Fixed Assets A/c |
60,000 |
Revaluation Loss |
||
|
Provision for Claim against WCF |
25,000 |
Suresh's Capital A/c |
17,000 |
|
|
Ramesh's Capital A/c |
17,000 |
|||
|
Mahesh's Capital A/c |
25,500 |
|||
|
Ganesh's Capital A/c |
25,500 |
85,000 |
||
|
85,000 |
85,000 |
|||
|
Partners' Capital Account |
|||||||||
|
Dr. |
Cr. |
||||||||
|
Particulars |
Suresh |
Ramesh |
Mahesh |
Ganesh |
Particulars |
Suresh |
Ramesh |
Mahesh |
Ganesh |
|
Revaluation A/c |
17,000 |
17,000 |
25,500 |
25,500 |
Balance b/d |
1,00,000 |
1,50,000 |
2,00,000 |
2,50,000 |
|
Mahesh's Capital A/c |
2,250 |
2,250 |
Suresh's Capital A/c |
2,250 |
2,250 |
||||
|
Ganesh's Capital A/c |
2,250 |
2,250 |
Ramesh's Capital A/c |
2,250 |
2,250 |
||||
|
Cash A/c |
25,250 |
75,250 |
Cash A/c |
75,250 |
25,250 |
||||
|
Balance c/d |
1,53,750 |
1,53,750 |
1,53,750 |
1,53,750 |
|||||
|
1,75,250 |
1,75,250 |
2,04,500 |
2,54,500 |
1,75,250 |
1,75,250 |
2,04,500 |
2,54,500 |
||
|
Balance Sheet |
||||
|
Liabilities |
(Rs.) |
Assets |
(Rs.) |
|
|
Capital A/c |
Fixed Assets (Less depreciation) |
5,40,000 |
||
|
Suresh |
1,53,750 |
Current Assets |
3,45,000 |
|
|
Ramesh |
1,53,750 |
|||
|
Mahesh |
1,53,750 |
|
|
|
|
Ganesh |
1,53,750 |
6,15,000 |
|
|
|
Claim against WCF |
1,00,000 |
|||
|
Sundry Creditors |
1,70,000 |
|||
|
8,85,000 |
8,85,000 |
|||
Working Notes
WN1: Calculation of Gaining/Sacrificing Ratio
Adjustment for Goodwill
|
Suresh's Capital A/c |
Dr. |
4,500 |
||
|
Ramesh's Capital A/c |
Dr. |
4,500 |
||
|
------To Mahesh's Capital A/c |
4,500 |
|||
|
------To Ganesh's Capital A/c |
4,500 |
|||
|
(Gaining partners compensate sacrificing partners) |
WN2: Calculation of Adjusted Capital
Suresh = 1,00,000 - 21,500 = Rs.78,500
Ramesh = 1,50,000 - 21,500 = Rs.1,28,500
Mahesh = 2,04,500 - 25,500 = Rs.1,79,000
Ganesh = 2,54,500 - 25,500 = Rs.2,29,000
Total Combined Capital = 6,15,000
WN3: Calculation of New Capital
Solution Ex. 32
|
Revaluation Account |
||||
|
Dr. |
Cr. |
|||
|
Particulars |
(Rs.) |
Particulars |
(Rs.) |
|
|
Revaluation Profit |
|
Land and Building |
2,10,000 |
|
|
A's Capital A/c |
1,40,000 |
|
|
|
|
B's Capital A/c |
70,000 |
2,10,000 |
|
|
|
2,10,000 |
2,10,000 |
|||
|
Partners' Capital Accounts |
|||||
|
Particulars |
A |
B |
Particulars |
A |
B |
|
Reserve |
1,80,000 |
1,20,000 |
Balance b/d |
3,00,000 |
2,00,000 |
|
Cash A/c (bal. fig.) |
20,000 |
|
Reserve |
1,00,000 |
50,000 |
|
A's Capital |
|
20,000 |
B's Capital A/c |
20,000 |
|
|
Balance c/d |
3,60,000 |
2,40,000 |
Revaluation A/c |
1,40,000 |
70,000 |
|
|
|
|
Cash A/c (bal. fig.) |
60,000 |
|
|
5,60,000 |
3,80,000 |
5,60,000 |
3,80,000 |
||
|
Balance Sheet |
||||
|
Liabilities |
Amount (Rs.) |
Assets |
Amount (Rs.) |
|
|
Capital A/c |
Land and Building |
5,00,000 |
||
|
A |
3,60,000 |
Furniture |
80,000 |
|
|
B |
2,40,000 |
6,00,000 |
Stock |
2,40,000 |
|
Reserve |
3,00,000 |
Debtors |
1,50,000 |
|
|
Creditors |
2,00,000 |
Bank |
60,000 |
|
|
|
|
Cash (30,000 + 60,000 - 20,000) |
70,000 |
|
|
11,00,000 |
11,00,000 |
|||
Working Notes
WN1: Calculation of New Capital
WN2: Calculation of Gaining/Sacrificing Ratio andAdjustment for Goodwill
Adjustment for Goodwill
|
B's Capital A/c |
Dr. |
20,000 |
||
|
------To A's Capital A/c |
20,000 |
|||
|
(B will compensate A to the extent of his gain) |