[CBSE] Q. 65 Solution of Admission of Partner TS Grewal Accounts Class 12 (2023-24)

Solution to Question number 65 of the Admission of Partner chapter 5 of TS Grewal Book 2023-24 Edition CBSE Board?

X and Y share profits in the ratio of 5 : 3. Their Balance Sheet as at 31st March, 2023 was:

Liabilities	₹	Assets		₹
Creditors Employee’s Provident Fund Workmen Compensation Reserve Capital A/cs: X Y	15,000 10,000 5,800 70,000 31,000	Cash at Bank Sundry Debtors Less: Provision for Doubtful Debts Stock Fixed Assets Profit & Loss A/c	20,000 600	5,000 19,400 25,000 80,000 2,400
	1,31,800			1,31,800

They admit Z into partnership with 1/8th share in profits on 1st April, 2023. Z brings ₹ 20,000 as his capital and ₹ 12,000 for goodwill in cash. Z acquires his share from X. Following revaluations are also made:

(a) Employee’s Provident Fund liability is to be increased by ₹ 5,000.

(b) All debtors are good.

(c) Stock includes ₹ 3,000 for obsolete items. Hence, are to be written off.

(d) Creditors are to be paid ₹ 1,000 more.

(e) Fixed Assets are to be revalued at ₹ 70,000.

Prepare Journal entries, necessary accounts and new Balance Sheet. Also, calculate new profit-sharing ratio.

[Ans.: Loss on Revaluation – ₹ 18,400; Capitals: X – ₹ 72,625; Y – ₹ 25,375; Z – ₹ 20,000; Balance Sheet Total – ₹ 1,49,000; New Profit sharing ratio – 4 : 3 : 1.]

Solution:-

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