Advance accounts bcom

ROY

TES

Bengai Caat mite Ltd., gbtained a-icese of Ctai fnines t n " 13,009 Royathy of Rs.4/-per tonne of coal raised subjcct to a minir n rent of P.a. The saortworkings can be recouped in the first 4 years oí the lease. E.nm ihs following preparc Royathy Alc., shortworkings A/c, and "A" Alc in the books of Company

a 11

a.

e

19YO

199N

1992

1993

1994

Saies (Tcnncs)

1100

1750

2.303

2900

3500

Closing Stock

150

A2.50

200

300

400

Sudhecr tock lease of a Coal ficid from Shanker at a Royathy of Rs.2/- per one of Coal raized. he minimum rent and coal raized during 1991 to 1995 are as

ollowsS

(Rs

Cos razea (Tonne

1991

3,500

1,500

1992

4,000

,,800

1993

4,500

,908

1994

5,000

2,750

5,0C0

250o

The shortworkings of anyiyear is recoverabie oUÉ of he Royathy of aext two years.

Buddha Coal Lid., took a piece of land on minimum rent of Rs.600 in the îrst year, Rs.1,200 in ihe econd year, and Rs.1,800 per annurn in the subsequent years aegng ito z royaihy of 30 paise per toune with power o zecoup shortworKings over the just tiree ycars oaly. The figures of annual output for four years upto 31st Dec., 995 were i000, 3000, 6000 and 8030 tonnes respectively.

Show the necessary ledger Accounts

irn

tne Books of Budha Coal Ltd.

The outpu of Ore of a micing Co., in the rst 5 yeærs was as follows -00 tornes ; 2 20,0U0 LUIMLCB * 1uyU tUu:vh y,meses » 1",0u0 ioutios 2.0,c00 tonnes. The company holds iease of a mirne et 2 Royalty of Rs.24,000 nnurn, with the right to recoup shortworkings out of tae subsequent surplus royalties with in a period of 5 years. All the payments were made when due. Show the Deacd RetAlc; Royaly Ale; Short workings Ale; and Lard Lord A/c for five years in the

,

*

*

sooks of he Co.,

aty

Sun td. patentees.of

»}S

and

anew type o CasHarn,

MR A iSiuci

xe

a

as icence to Flarne. t.td.,

for the Bumer manufacture and sale for 5 years on tenns Flame Ltd., to pay a Royalty of Rs. 1 00 for every buner manufactured, wish e

miniu

Tet

of Rs.50,000 P

b)

In any ycar ifRoyalties arc lessthan minimum rent, Flame Ltd., may recoup the shortworkings in the following ycar.

c)

Payment have to be made on

3

Ist March every ycar.

Sales and Closing Stock

ofBurners for 5 ycars eles in mita Closing 8toc%

Yearz 1990-91

200

50

1991-92

400

1G0

1992-93

6C0

70

1993-94

550

150

1994-95

230

20

YOur arc requircd to show

necessary accounts in the books of Flame

L1c.

A Co., !eased a colliery on i-1-91 at a

minimum rent of Rs.20,000 merging cf Rs.1-50 per ton, with power to recoup shortworkings over the irs 4 years of the lease. The output of Colliery, in tonnes, was as follows: into a Royalty

1990 -9,000;

1991

12,000; 1992 16,000;

1993

-

20,000;

1994- 13,000

Show necessary aceounts. in the books of Company.

1

Vikas Publishers published a book written by Swarmy on the tems that he get a Royaly of Rs.3 per copy sold, subject to a minimum of Rs.5000 Pa. and shortworkings of each year could be recovered in next 3 years. Tne copies

were:

:990 800;

1991

1500 ; 1992 2000;

Show necessary accounts in the

1993 2000;

1994 3C00

books of Swamy.

The Andhra Coal Company lease ofa mine on a Royalty of 50 paise pe tonne of coal raised with a Dead Rent of Rs.30,000 p.a. and power to recover shortworkings of any year in the next year only. In the event of strike, the dead rent of that year shail be reduced by 10%. The out output was as follows:

year 3

20,0CC tons;

year 70,000 tons;

I

year 40,000 tons -

4th year (Strike - 50,0000

Sth year 60,000 tons.

Show Dead Rent Account Accounts.

9.

;

Royalities

;

Short workings; and Land Lorc

Murthy took a lease mines from Avinash with effect of from Jan. 1st, 1989 a period 20 years. The terms of agreement provided for the payment of Royalty at Rs.0.60 paise per tone raized, subject to a minimum rent of Rs.24,000 p.a., right to recoup shortworkings, with period of 3 years immediately suceeding year in which the shortworkings arises.

It vwas further agreed should be reduced proportionately, that the minimur? in case of strikes or lockouts in any year.

3

-

-

Your are furnished the following details:

Years

Tonnes raised

1993

46,000

1994

37,400

1995

30,800

1996

38,000

1997

41,200

1998

45,200

There was a strike in the year 1995 from October to December.

The balance in shortworkings Account, as on 1-1-93, was Rs.9,800 of whichRs.4,40arose in 1990 and the balance in 1991.

Prepare ledger in the books of Murthy.

10.

Mishra Mining Co., takes a lease of a Coal mine for the period of 8 years from 1-1-90 on a Minimum rent of Rs.i2,000 Pa. The Royalty is 75 paise per tonne of coal raised and it is payable half yearly cn 30th June and 3ist December of each year. Shortworkings can be recouped during the first three years of lease only. on The Co., closes books 31st Dec., each year. Coal raised as follows

is

Helf year ending on 30-06-90

6,000 Tons

Haif year ending on 31-12-90 Haif year ending on 30-06-91

8,000 Tons 10,000 Tons

Haif year ending on 31-12-91

6,000 Tons

Half year ending on 30-06-92

7,000 Tons

Half year ending on 31-12-92

9,000 Tons

Prepare Royalty Account, Land Lord Account, Shortworkings Account in tihe books of Mishra Mining Company.

1i.

A Coal Co., took a coal mine for lease on a Royalty of Rs.1-50 per ton coal raisewith minimum rent Rs.15,000 P.a. Shortworkings can be recovered out of the Royalty of next two years oniy. In the year of strike the minimum rent is to se reduced to 60%. The output for the six years was as follows:

Years: Tonmes

:

1992

1993

1994

1995

1996

1997

5,000

6,000.

14,000

12,500

25,000

7,500

(Strike) Write up necessary A/c.s in the books of Coal Co.

Mr. Pradeep who is an author ofa book on philosophy got published with MSN printers on the terms that Royalties will be paid at Rs.S per copy sold, subicct to minimum rent of Rs.15,000 per year, with a right to recoup the shortworkings Ver the first three years of the Royalty agreement. The detaiis are as under:

Years

No.of copies primted

No.of Cpies olf closimg stock

1990

,000

100

1991

3,000

200

1992

4,000

400

1993

5,000

500

Prepare necessary A/c in the books MSN printers.

13.

A Colliery acquired lease of Coal mine for 20 years, with a clause that the defficiency of any one year to be set off against Royalty payable with in the next two years. The particulars are:

Year

MEminuua

Rent

Royalty (IRs)

750

500

1,000.

800

1,250

IV

900

1,500

1,750

1,500

1,600 Give journal entries in the books of Colliery Co., and show the shortowrkings Account.

14.

Jaya Sankar leased coal fields from Narendra at a Royalty of 25 paise per Ton of Coal raised. Minimum rent was Rs.24,000 P.a. Shortworkings was to berecouped during the first four year.

The Coal raised in the first four years ia as follows Neas Tommeg 1990

80,000

1991

90,000

1992

60,000

1993

1,20,000

(Strike for 3 months)

There was provision for proportionate reduction stoppage of work by strike, in Minimum Rent in case of lockout, accident etc.

Show the relevant ledge Accounts in the books of Jayasankar.

15.

Assam Coal Co., took a coal mine for a lease on Royalty tonne raised with a dead rent ofRs.15,000 per year. Shortworkingsof0-75 paise per out of the Royalty of the next two years can be recovered only. In the year be reduced to 60%. of the output for the strike the dead rent is to years

a

six

was as follows

1

ToMMes: 10,000

2 12,000

28,000

25,000

5

6

50,000

15,000

(Strike) Writeup necessary ledge Acounts in the books of Coal Company.

A Colliery workcd coal under lense 16. which provided for the at 50 paise per tonine with a payment of royalties miniimum rent of Rs. 17,000 P.a. Each year's minimum rent over the actual royaltics excess of were recovcred during the subsequcnt years. threc The lease however, stipulated that in any ycar the norma rent was not attained due to strikc, the minimum rent was to be regardcd as having becn reduced proportionately having regard to the length of the stoppage.

The cutpul was as follows: omimesS

For the year ended 31-12-85

4,000

For the year ended 31-12-86 For the year ended 31-12-87

30,000

For the year ended 31-12-88

46,000

For the year ended 31-12,89

30,000

For the year ended 31-12-90

50,000

28,000

During the year 1989 there was a stoppage the to strike lasting 3 months.

Frepare reievant Accounts in the books of Colliery Company.

17.

A Coal Co., has taken on lease Coal field from the landlord as the following terms : 2

Lease is for 99 years.

ease rent is to be S0 paise 2.

c)

for every tonne of Coai raised.

Minimun rent is to be Rs.30,000 P.a. the lessee has a right to recoup any shortwozkings with in a period years 3 of for which the excess payment was made.

In the case of strike and there was no raisings the minimum rent payable would be proportionate.

The foilowing were the raisings: 1985

20,000 Tonnes

1986

35,000 Tonnes

1987

30,000 Tonnes

1988

70,000 Tonnes

(Strike for 3 months)

-6 1989

80,000 Tonnes

1990

1,00,000 Tonnes

Show the necessary ledger in the books of Conl Company 18.

x

Colliery Company lensed a property from Z at a Royalty of 50 paise per ton with n dead rent of Rs.l0,000 P.a. Ench years excess of dead rent over royalty is recoverable ont of the Royalty of next three years. In thc event of strike and the dend rent is not reached the lense provided that the actual royalty eorned for the year discharged nll the rental obligations for that yenr.

Untout (Irn Tons) 1981

15,000

1982

21,000

1983

12,000 (Strikc)

1984

16,000

1985

22,000

Writcup necessary ledgc Accounts in the books of Colliery Company Ltd. 19.

Enginner had patented a safety lock and gave the Scth & Co., the right to produce and sell locks for 7 years on the following terms A royalty of Rs.4 to paid on each lock sold A right to recoupment of shortworkings during the two foliowing

showorkinge.

Year ended 31st Dec., 1980

4,C00

Year ended 31st Dec., 1981

4,500

Year ended 31st Dec., 1982

5,400

Year ended 31st Dec., 1983

6,500

e as

Give ledger Accounts as they would appear in the books of Seth & Co:npany.

20

Rance Ltd. leased a property from Mr. Akbar at a royalty of Rs. 1-50 per tonne with a minimum rent of Rs.4,000 P.a. Each year's excess of minimum rent over royalty, recoverable out of the royalties of the next five years. In the event of strike minimum rent should be reduced proportionately.

The results of working:

Yenr

Actul Rayalty

1986

-Nil-

1987

1,300

1988

3,700

1989

4,500

1990

7,000

1991

2,400 (Strike for

1992

6,000

3

months)

Writeup minimum rent, Royalty and shortworkings Accounts.

Dinesh Ltd. patented to manufacture water filters, granted the licence to Prakash Lid. for 10 yeas to producc and seli them on the following terms Prakash Lid. to pay a royalty of Rs.10/- for everjwater filter sold with a minirnum rent ofRs.40,000 P.a. A/cs are to be settled annuaily on 31st December.

2) The

Shortworkings in any year may be recouped from any excess of royalties over the minimum rent in the next 2 years subject to a maximum of R.16,000 P.a.

No.of water filiers Year

sold was as follows:

Water filter sold

31st Dec., 1991

800

3Ist Dec., 1992

,400

31st Dec., 1993

10,400

31st Dec., 1994

1,600

31st Dec., 1995

8,800

New Sieel Ltd. obtained a lease from old Coal Ltd. for a coai mine on ist Je:, 1991, on the following terms 1)

Royalty at Rs.1/- per tonne raised1

2)

Minimum rent Rs.24,000 P.a.

3)

Recoupment of shortworkings of each year during three years following subject to a mieism of Rs.5000 P.a.

4) In the event of strike the minimum rent would be taken pro-rata on the basis of actual workings day,but in the event of lockout, the lease would ejnoy a concession in respect of minimurn rent for 50% of the pericd of lockout.

Besides the above New Steel Ltd., have been granted a cash subsidy equai to 25% of theunrecoverable shortworkings by the central govt. upto the firsi five years of the lease.

Workingup to first six years is as follows: RS. 1991 Actual Royalty

14,000

1992 Actual Royalty

20,400

1993 Actual Royalty

32,200

-

1994 Actual Royalty 1995 Actual Royalty

1996 Actual Royaltyy

8

27,200

21,600 (Strike 2 months) 19,400 (Lockout 4 months)

Show the ledger Accounts in the books of New Steel Ltd. D" Coal Co., acquired on lease coal mines on a Royalty of Rs.5 per tonne of Coal brought on the surface with a minimum rent of Rs.56,000 a year with no right to recover shortworkings except in case of strike, shortworkings of strike period are recoverable in next year.

10% ofthe Coal taken out from the Csal tane mine is lost in weight in bringing the coai on surface.

year

D" Coal Co., tookout coal from the mine: 2000 tonnes; II year 8000 tonnes ; III year 12000 tonnes

IV yeer 17,000 tonnes; and Vyear 8000 tonnes (Strike) Show ledge Accounts in the books of D" Coal Company.

SINGLE ENTRY SYSTEM (o7)

ACCOUNTS FROMINCOMPLETE RECORDS Problem No. 1 Jawahar kept his books on singlc cntry system. His position is

Lisbilitiea

93

Reserve Fund

Creditors

31-3-94

Agaeta

-93

Stock

20,000

19,000

8,500

14,000

31-3-94

4,000

5,000

22,000

29,000

Dcbtors

****

Cash in hand

200

300

Cash at bank

3,000

2,000

Fixtues & Fittings

1,800

,500

Employccs P.F.

1,000

29,00C Plant & Machinery 15,000 Ascertain profit for the year 1993-94 and show his financial position at the beginning and end of the year.

Problen No.2 Calculate the profit under Single entry systern for the year 1989

Particulare

Balamce

Balamce s13

m 3-12-89

15,000

16,000

4,000

3,000

Plant

10,000

15,000

Machincry

30,000

28,000

Stock

10,000

11,000

Debtors

15,000

14,000

1,000

1,500

Creditors

Bills payable

Cash

:

Problem No.3 Madhav keeps his books under single entry system. On 1st May 1990 is financial position was is follows: Cash in hand Rs.150; cesh at bank Rs.3,000; Stock in trade Rs.7,500; Fixhrs &Fittings Rs.350; Sundry éebtors 9,800; Plant& Machinery Rs.15,100 Sundy Creditors Rs.9,000; During the ycar M adhav withdrew from the business vario sums amocunting to Rs.5,900.

On 30th April 1991, his financial osition was as follows

10

Sundry Creditors Rs.7,500; Plant& Machinery Rs.18,100; Rs.320;Sundry debtors Rs. 13,300; Fixtures & Fittings Stock in Trade Rs.14,000 ; Bank OD Rs.2,600.

Cash in hand Rs.150; You are required to prepare a statement of profit and a closing statenment affairs. of Probelm No.4

Calcuiate the profit eaned by trader follows Single-Entry System:

Particlars

a

trader from the following particulars. The

1--1990

31-12-90

1,50,000

1,60,000

40,000

Plant

30,000

1,00,000

Machinery

1,50,000

3,00,000

Stock

2,80,000

1,00,000

Sundry Debtors

1,10,000

1,59,000

E,40,000

10,000

15,000

Sundry Creditors Bills Payable

Cash in hand

o'3

Provide depreciation on Fixed Asets at 5% and on stock and debtors at 10%.

Problem No.5 Mr. Sanjeev maintains books on Single Entry. He gives iníormation:

Particmlars

31-3-92 1,200

2,000

Cash in hand

200

Stock of goods

300

10,000

12,000

Sundry Debtors

12,000

8,000

4,000

Buildings

20,000

Sundry Creditors

7,000

he

íoiiowng

31-R-93

Bank balance

Furniture

yoi.

8,000 Sanjeev introduces a fresh capital of Rs.10,000 on lst July 1992 and withdrawn Rs.5,000during the year. You are required to ndout the profit sy Sanjeev after providding 5% made Depreciation on Buiidings, 10% on Furniture for the year ended 31-03-93.

Problem No.6 Anil keeps his books by single entry. He gives you the following information Erom which he requires you to ascertain his Profit/ Loss uring'88.

Pariemilare Bank balance

ct

Jam. 1988 740 (Cr)

31st Dec19E2 400 ( 10

Cash in hand Sundry Debtors

5,300

8,800

Sundry Creditors

i,950

Stock

1,500 ,700

Piant

2,000

2,000

140

140

Furniture

1,900

introduced capital of Rs.600

Hhad withdrawn Rs.3000 during the year but had in necessary. Weiteoti on Ist Y988. A provision of 5% on Sundry Debtors P.a.

Depreciation on Plant at 5%%. Interest on capital is allowed at 5% Ssoo 0: o60

Problem No.7

Rs.12,000. he beught Gopal comnenced business on 1-1-1986 with a capital of withdrawn @Rs.200 furniture Rs.1,200 and machinery Rs.200. During the year he On 30-6-86 he borrCWed per month for private use, he introduced capital ofRs.1,600. that amount.

Rs.4,000 from his wife Smt. Padma at 10% P.a. interest on 3112-86 his financial position was: ; Rs.5,300 ; Stock-inCash in hand Rs.30O; Cash at bank Rs.3,200 Sundry debtors Creditors Rs.800 ; Outstanding trade Rs.5,600 ; Bills receivable Rs.2,400; Sundry Om

rent Rs.100. / loss made by Depreciate furniture and machinery by 10%. Ascertain profit 3.380 Po Gopal during 1986. 9 s&0

Problem No.8 following Aretail trader kept his Accounts in single entry system. But he has the year details of his Accounts. You are requested to ascertain the profit or loss for the ended 31st Dec., 1983:

--1983

31-12-1933

Stock-in-trade

16,700

18,500

Sundry Creditors

15,400

14,000

Sundry Debtors

11,200

10,500

Particulars

Cash in hand Bank O.D.

250

1,200

20,200

19,400

12

Bills receivable

15,050

14,200

500

1,500

1,900

1,900

Fixtures & Fittings

Motor Van

The withdrawing during the year amounting to Rs.2,600 ; Depreciate Fixiures by 10% and write Rs.300 off Motor Van. As regards the debtor, it is ascertained that Rs.500 are irrecoverable and further reserve of 5% should be made.

Also reserve Rs.700 in respect of bils receivable.

Problem No.9 Ram & Shyam are partners sharing profits & losses in the.ratio of 3:2 after charging interest on capital at 5% P.a. Interest on drawings is to be ignored. On 3ist Dec., 1979 their position was as follows:

Liabilities

Rs.

Assets:

TRS.

Sundry Creditors

15,000

Cash at Bank

6,C00

Ram's Capital

30,000

Cash in hand

500

Shyam's Capital

25,000

Prepaid Insurance

500

Stock

20,000

Sundry Debtors

i2,000

Furniture Machinery 70,000

1,000

30,000 70,C00

During the year ended 31st Dec., 1980 Ram had withdrawn Rs.!0,000 are Shyam Rs.5,000 for their private purpose. On31st Dec., 1980 the assets and liabilities

were Sundry Debtors Rs.16,000; Stock Rs.28,000 ; Csh at Bank Rs.5,000 ; Prepaid Insurance Rs.500 ; Sundry Creditors Rs.I5,100; Expenses owing Rs.300.

Machinery end Furniture were to be depreciated at 10% Pa. Prepare a statement showing the profit/loss made by Ram and Shyam for the year ended 3 1st Dec.,1980 and a statement of Affairs as on that date.

Problem No.10 Kumar keeps his books by Single Eniry method. His position on 31st March 1994 was as follows: Cash in hand Rs.2,400; Cash at bank Rs.25,500; Debtors Rs.18,400; Stock Rs.28,600; Furniture Rs.5,000 ; Creditors for goods Rs.18,700 ; Expenses outstanding Rs.2,000 On 1st Oct., 1994, Kumar introduced Rs.10,000 as further capital in the business and withdraw on the same date Rs.7,000 out of which he spent Rs.5,000 on purchase of a Machiner for the business.

as follows On 31st March 1995 his position was Rs.27,500; Stock KS.31,500 ; Debtors Cash in hand Rs.2,100; Cash at bank Prepaid Insurance Rs.200 Rs.24,200; Furniturc Rs.6,000: Creditors Rs.25,200: profit or loss made by him durino ing P'repare the necessary statemcnt showing the making thc following adjustments the year ended 31st March 1995 aftcr Writeoff debls Rs.1,200; and Depreciate Furniture and Machinc @ 10% Pa. to Rs.1,500 for personal use amounted takcn Goods debts. doubtful for provide 5% Also provide intcrest on capital 10%% P.a.

Problem No.ll

X

Rs,. 10,000 on 1-4.95 with a capital of busincss cloth his commenced Sarath Rs.3,000. His books are kept under for furniturc purchascd On the same day hc : are avaibale Single Entry Systemn. Foilowing particulars Rs.

Saies (including cash sales Rs.7,000) Rs.4,000) Purchases (including cash purchases of

Expenses paid in cash

Bad debts Drawings by Sarath in cash Salaries paid in cash

17,000 15,000

700 500 1,200

2,000

personal use and gave Rs.200 Sarath took cloth of Rs.500 fom his shop for his recordedé in and these transactions were not to his son out of the cash of the firm creditors were Rs.3,600 and stock books. On 31-3-96 debtors were Rs.5,200 and Rs.6,500. trading and profit and Prepare cash account, debtors and creditors accounts, ioss account and the balance sheet.

Prolem No.12

7

Rs.25,000. Out ct Mr. Babu commenced business on 1-1-90 with a capital of his wie this he purchased furmiture for Rs.4,000. During the year he borrowed from particulars Rs.5,000 and introduced a further capital ofRs.3,000. From the following to taken from his books which are kept under single entry system you are reeuired prepare Trading & Profit & Loss Account for the year eneded 31-12-90 and a Balan Sheet as on that date.

Rs. Receipts from Debtors

46,700

Cash sales

30,000

Cash purchases

10,000

-45

PARTNERSHIP ACCOUNTS Problem No.1 Akram, Bakram & Chakram were partners sharing in 4:3 :2 with capitals of Rs.18,000, Rs. 14,000 and Rs.12,000. The profits for the just concluded year amounte to Rs.7,600 before allowing interest on Capital, which is to be calculated at 5%. was decided that the capital of the whole firm be Rs.54,000 and the partners shouid bring in or withdraw cash to make their capital in profit sharing ratio.

I

Prepare the Profit and Loss Adjustment A/c and Partners Capital Accounts.

Problem No.2 P &E were partners in a firm. On lst jan., 1S89 their capital accounts showed

balance of Rs. 1,00,000 each. P' introduced additional Capital Rs.50,000 on 30 to Sept., They were sharing profits and losses in the ratio of 3 :2 "B" was entitled monthly drawings of Rs.1,000 subject to interest at 6% per annum. he drew the amounts on that last working day of each month. a

During the year 1989 the firm earned a profit of Rs.24,000. Prepare the necessary ledger accounts.

Problern No.3 contributing Rs.2,50,000 On ist Jan., 1989, A, B and C entered into partnership profit in the ratic of5 : 3 :2. ;Rs.i,30,000 and Rs. 1,20,000 respectively and sharing Rs.14,500 respectively per year.

B and c are entitled to a Salary of Rs. 16,000 and 5%% p.a. during the year A withdrevw Rs.40,000; Interest on Capitals is to be allowed at being A Rs.2,250; B Rs.1,125 and C "B" Rs.25,000 and "C" Rs.15,000. Interest was Rs.7i,400. in 1989 before the above mentioned adjustments

Rs.725. profit

Capital Accounts (a) ifthey Show how the profit is distributed and also prepare are fluctueting and (b) if they are fixed.

Problem No.4 and losses in proportion to their capitals A,B andCare partners sharing profits are entitled annually to draw Rs.6,000, Rs.5,000 at the beginning of the year. They anticipated share of Profits. Any drawings in their of out respectively Rs.4,0C0 and as advances taken from the firm and one excess of these amounts are to be regarded p.a. The Capitals as at the beginning of subjected to interest at an average rate of 6% average rate of 5% p.a. The Capitals of the the year to be allowed interest at an partners as at the beginning of the year were:

46

The Credit Balances of their current accounts were A.

Rs.2,304

;

B Rs.3,723

;

C Rs.1,152.

Their drawings during the ycar were A Rs.10,000; B Rs.12,000; CRs.5,000

The profits for the ycar were Rs.30,096 before making ay adjustmeats for interes as above. Drawup capitul and current accounts of the partners.

Eroblem No.5 A and B are to contributc capitals of Rs.50,000 and Rs.30.000 respectively when they entered into a partnership on 1st Jan., 1989. Profits are to be shared in

the

of3 :2. Interest on Capitals are to bc allowed 5% p.a. Interest on drawings is to be charged at 2% p.a. A is to get a salary of Rs.500 p.m. B is to get commision at 2% on the net Profits of the fîm before charging any of the above. ratio

Cn 31st Bc., 1979 heir trading profits, before giving cffect to above te was Rs.60,000. During the year A has withdrawin Rs.i,000 and B Rs.500 from the firm on which interest is to be charged for the whole year.

You are required to prepare profit and loss appropriation Account for the yeaended 3.st Dec., 1989 end pariner's capitai accounts in cEses wier. (a)

Their Capitais are îiuctuating

(b)

Their Capitals are fixed.

ADMISSION OF PARTNER Frobiem No.l The following is the balence sheet of A &3 on 31-12-96. They share profts and losses in the ratio of 3/5 : 2/5.

Balance Slhcct ASsets

62,000

Creditors

Capital Accounts: 35,000

35.000

70,000

1,32,000

Cash at Bark

5,000

Land & Buildings

25,000

Plant & Machinery

35,CC

Furniture & Fittings

2,000

Stock

20,000

Debtors

,v

,32,000

-47They take

'C' into Partnership on 1-1-97. He should bring Rs.5,000

as goodwil! which is to be retained inthe firm and that he shall bring Rs.15,000 as Capital for a i/ 4 share in the future profits. For the purpose of C admission, the firms asse!s ere agreed to be revalued as under. Land & Buildings to be valucd at Rs.30,000, Plant 2 Machinery to be reduced by 10% and a provision of 5% on dcbtors to be made fo doubtful dcbts. The stock is to be taken at Rs.25,000.

Prcpare necessary ledger accounts and the balance sheet of the C" admission.

nevw

fim after

Problem No.2 A and B are the partners in a firm sharing profits and losses in the ratio of2

The Balance Sheet of the fim as on 31-3-96 was as follows: E3mlamce

: 1.

Sheet

RS Creditors

9,000

Cash

Workmen compensation fund

6,000

Bills receivable

5,0CC

12,50C

General Reserve

10,500

Debiors

20,000

Capital

30,000

Less provision

2.500

24,500

Stock

20,00

Investments

25,C00

B

80,000

17,50u

80,000

On the above date 'C' is admitted for2/5 share and the following adjustments

are made:

.

Accrued income not appearing in the books Rs.500

3.

X, an old customer whose account was writtenoff as bad, has promised to pay Rs.350 in full settlement of Debt.

4.

Market value of Investments is Rs.22,500.

5.

Cis required to bring Rs.40,000 as Capital and Rs.10,000 as govdwill.

1.

Claim on account of workmen compensation is estimated at Rs.750

Prepare necessary Leger Accounts and New Balance Sheet.

Problem No.3 A and B are the partners sharing profits in the ratio of their capitals. Their Baiance Sheet as on 31-3-93

48 Eallamce Flheet

Aggets

Liabilities

Aoha

Creditors

9,000

Freehold Property

Bilis Payable

6,000

Plant & Machinery

3,500

General Reserve

2,100

Furniture

1,750

A

Capitals:

Office Equipment

20,000

35,000

B15,000

10,000

Stock

350

14,100

Bills receivable

3,060

Cash

1,590

Bank

50 52,1CC

52,100

On 1-4-94 they admit 'C' on the following terrms C is to bring Rs.10,000 Capital and to pay Rs.3,500 for goodwili and he wi: get 1/4 share of profits.

2.

Reserve for Bad debts to be raised to 2%.

3.

Stock to be writtenoff by 5%

Freehoid premises to be revaiued at Rs.11,400;Plant &Machinery ai * 2,800, Furniture Rs.1,540 and Ofice Equiprnent Rs.495.

4.

You are required to prepare Accounts and ihe Balance Sheet of the New Firm.

Problea No4 A & B are partners sharing profits in the ratio of 3 :2 'C' is admitted and the New Profit sharing ratio is 2 :2: i. C brings in cast Rs.8000 for Capital and Rs.2,000 for Goodwil1. The Balance Sheet of A and B at the time f admitting C' is as follows

aigmce Slheet

aIies Capital

heir

AGSeis

A

8,000

Land

B

8,000

Other assets

Reserve Fund

4,000

Creditors

5,000

25,000

2,500

22,500

25,000

Partners decided to writtenoff 2% on land and 5% from other assets. Cive entries and Balance Shect.

Problem No.5 E and F are in Partnership sharing profits and losses in the ratio of3 : I. Oni1-90 they agree to admit 'G' giving him 1/8th share in the future profits. G brings irn Rs.25,000 as his capital and Rs.4,000 as his sharc of Goodwill. Goodwili does not appear in the books but the partners agrec to show it at Rs.16,000. On the date of 'G' admission, the balance shect of the firm was as follows.

Liabilitiea

Aaseia

Creditors

10,000

Cash

5,000

Reserve und

20,000

Eank

20,CC0

Debtors

15,000

Stock

20,000

Capitais 30,000

25.000

55,000

Furniture

5,000

Buildings

20,C00

85,000

85,CC0

Pass Journa! Entries and Prepare revalued Balance Sheet.

Problem No.6 Kishore and Kumar share profits and losses in the ratio of 3/5 and 2/5. The Balance Sheet on 31st March 1987 as follows:

Libilities

ASsets

Sundry Creditors

20,000

Cash at Bank

General reserve

20,000

Bills receivable

5,000

&LAccount

10,000

Sundry Debtors

15,000

Stock

20,000

Capitals:

i0,C00

Kishore

30,000

Furniture

Kumar

20,000

Plant

20,000

Buildings

25,00C

1,00,000

5,000

1,00,000

50

On 1st April, 1987, Krishna admitted into Partnership on the following terms: a)

That Krishna pays Rs.20,000 as his capital for a fifth sharc.

b)

He brings Rs.5,000 for goodwill, half of this surn was to be withdrawn by

partners.

c)

That Stock and Furniture be reduced by 10% and 5% Provision be created for doubtful dcbts on debtors and Biils reccivable.

d)

There is an outstanding liabilities for rent Rs.500

)

An item included in Sundry Creditors is not likely to be claimed is Rs.1,500.

Show necessary Accounts and prepare new Balance Sheet.

Problem No.7 The following was the balance sheet of A, B and C on 1st June 199. |

Linitie2

AGgets

Bills Payable

3,300

Cash

Creditors

6,000

Debtors

10,800

Stock

I1,4C0

Capitals: À

C

60C

16,800

Furniture

2,40C

12,600

Buildings

19,5CC

5,000

35,400 44,700

444,700

They agreed to take X' into Partnership on the following terms: 1.

That

X should bring Rs.15,000 as Capital and Rs.9,000 as goodwill.

That Goodwill arnount should not be left in the business.

3.

The Stock and Furniture be depreciated by 10%.

4.

That a reieue of 5% on debtors be created for doubtful debts.

5.

That the value of Buildings should be raised to Rs.27,000.

Problem No.8 ABC are partners in a firm sharing profits and loss irn the ratio respectively. The following is the Balance Sheet as on 31-12-96.

Agsets

Lianiicieg

Capitais

of 3 : 2:

A

30,000

Buildings

50,000

B

20,000

Furniture

15,CCC

-51 C Reserve Fund

10,000

Stock

29,800

Bills reccivable

5,000

20,C00

Creditors

6,200

Dcbtors

7,500

Bills Payable

4,000

Cash

2,500

"D" is admitted as a Partner with effect from 1-1-97 on the following terms : 'D' wili bring Rs.15,000 as Capitai and Rs.12,000 as Goodwill. half

.

of the

goodwill will be withdrawn by the partners.

2.

'D' will be given 1/6th share in the profit.

3.

The assets will be revalued as: Buildings Rs.56,000; Furniture Rs.12,000; Stock Rs.16,000 ; Debtors Rs.7,000.

The Claim of a Creditor for Rs.2,300 is reduced to Rs.2,000 Half of the Reserve to be withdrawn by the partners.

4.

5.

Prepare necessary accounts and the Balance Sheet of the New Firm.

Problem No.9 A and B share profits in the ratio of 3/4 and 1/4 respectively.

Balance sheet as on 31st Dec., 1987

Balance Sheet Lialbilities

Rs

Assets

RS

Sundry Creditors

41,500

Cash at Bank

Capitals

30,000

Bills receivable

3,000

16,000

Sundry Debtors

16,000

Stock in trade

20,000

B

Fixtures

Land & Buildings 87,500

22,500

1,000

25,000 87,500

On 1st Jan., 1998 'C' was admitted into Partnership on the following terms

.

2.

The 'C' pays Rs.10,000 as his capital for 1/S share.

That 'C' p[ays Rs.5,000 for goodwill. half of this is to be withdrawn by 'A' and

"B 3.

The Stock and Fixtures to be depreciated by 10%and 5%, Provision for doubtful debts to be created on Sundry debtors and Bills receivable.

Vaiue of Lands and Buildings be appreciated by 200.

repairs The provisin of Rs.1,000 be made for outstanding

5.

6.

Show

bill.

likely to be claimed and nen An item of Rs.650 included in creditors is not shows be written back.

New Fi. necessary ledger accounts and prepare the Balance Sheer oi

Problem No.10 ratio AB and C are sharing profits and loss in the

of 2:2:

. Their Bala

lianc

Sheet as on 31-3-98:

R

Lialbilitie

12,850

Sundry Creditors

Ascets Land & Buildings

Outstanding Liabilities

1,500

Furniture

General Reserve

6,500

Stock in Trede

Capitals:

25,000 6,500

11,750

A

12,000

Debiors

S,500

B

12,000

Cash in hand

1,100

C

5,000

29,000 49,850

49,850 They agreed to take 'D' as Partner from i-4-98 on the folowing terms 1.

C

shall bring in Rs.5,000 as his Capital.

2.

Value of Stock shall be increased by Rs.2,500.

3.

Rs.550 shall be writtenoff as Bad debts.

4.

Furniture to be depreciated by 10%.

5.

Value of Buildings shall be increased by 20%.

6.

Value of the Goodwill of the firm is Rs.15,000.

7.

New profit skaring ratio of A,B,C.D is S :5:3:2

3.

After admission Goodwill Acocount is to be writtenoff.

Cutstanding liabilities include Rs.1,000 due to "X vwhich is not recorded in the Books.

respectively.

has been paid by A.

Prepare necessary Accounts and New Balance Sheet.

Problem No.11

tfu!

Xand Y are partners sharing proîits in the ratio of i:1. Their Balance SneeetE on 31-3-99:

53

lBalamce Zlheet

Linbilitie Crcditors

1,00,000

Cast

50,000

Capitals

2,00,000

Sundry Debtors

50,CC0

2,00,000

Stock on hand

1,00,000

Plant &&Machinery

2,00,000

Land & Buildings

1,00,000

Y

5,00,000

S,00,003

Z is admitted as partner with effect from 1-4-99 on the following tersms 1.

Plant & Machinery shall be valued at Rs.2,50,000.

2.

The valuc of Land & Buildings shal be increased by 50%.

3.

Goodwil! has been valued at Rs.60,000 and Z shali bring in Rs.18,C00 as his share of Goodwill.

A.

The value of Stock shall be reduced to 80%.

.

Z shall bring Rs.80,000 as his Capital.

6.

The whole amount brought in by Z sha!i remain the business.

New Profit sharing ratio X 4/10; Y 3/10;Z -3/10.

Writeup necessary accounts and show the opening balance sheet.

-

-

Problem No.12 A and B are partners sharing profit and losses in the ratio of 3 Balance Sheet as on 31-3-96.

:

1.

Their

Balamce Shect

Liabilities

Rs

Creditors

37,500

Generai Reserve

Capitals:

4,000

Assets Cash

Bills Receivable

22,500

3,000

A

30,000

Stock

20,000

B

16,000

Sundry Debtors

16,000

Furniture Buildings 87,500

1,000

25,000 87,500

-54On i-4-96 they admit "C on he following terms: The

C

pays Rs.10,000 as his capital for 1/5 share.

2.

That

3.

Lhe Stock

Goodwill account be raised in the books at Rs.20,000. and Furniture be reduced by 10% and a provision

of 5% be made fo

doubtful debts.

4.

5.

That valuc of Buildings appreciated by 20%. the Capital accounts of all partners be rcadjusted on the basis of new ratio proiit sharing and for this purpose current accounts are to be opened.

hat OI

Prepare necessary accounts and New Balance Sheet.

ProbiemNo.13 The ollowing is the Balance Sheetof X, Y and Z sharing profits and iosses in

the ratio of 6:5 3.

Creditors

Bills Payable

18,900

6,300

Cash

1,890

Debtors

26,46C

29,4C0

General Reserve

10,500

Stock

Capitals:

35,400

Furniture

29,850

Land & Buildings

14,550

Goodwill

1,15,500

7,350 45,15C 5,75

1,15,500

They agreed to take "A" as partner and give him 1/8 share on the terms

a)

The furniture be depreciated by Rs.920.

The Stock to be depreciated by 10%.

ofRs.1,320 be made for outstanding repair bills.

c)

That a Provision

d)

That the vaue of Land and Buildings be brought upto Rs.59,850.

e

That the vaue of Gcodwill be brought upto Rs.14,070.

That 'A' shouid bring in Rs.i4,700 as Capital.

That after making the above adjustrnents, the Capitals of oid partners be adjuste on the proportion of 'A's Capitel.

Show the necessary accounts and New Balance Sheet.

Nitish and Satish are cqual partners in a busincss. On 30th June, 1992 thsir balance shect stood ns follows Crcditors 3,559 Cash 150 Bank O.DD 4,841 Investmcnts 3.000 Capitals: Nitish 3,000 Dcbtors 5.700 Satish 2,000 Stock 4,i950

Furniture 13,400

400

13,400

It is

arranged to admit Mukesh into partnership and, as a resuit of ncgotiations it is agrced to make the following adjustments: To create goodwil Rs.2,000.

2.

3.

To crcate provision of 10% on Debtors.

To write down kxtures to Rs.300.

4.

To depreciate Stock by 10%.

5.

To increase the valuc of Investments to Rs.3,500.

Mukesh tesir introduced Rs.2,500 as his third share of capital to which amct it has ben agreed that the capitals of other partners are to be adjusted.

Make necessary entries, leger accounts and Balance Sheet of the New Fim.

Problem No.15 Ramesh, Kumar and Raju are sharing profits in the ratio of 3 5: 2. Their balance sheet as on 31st Dec., 1987:

Ligblitie

Capitals:

Asgets

Ramesh

44,000

Cash

18,000

Kumar

52,000

Bills receivable

24,000

Raju

36,000

Furniture

28,000

Creditors

64,000

Debtors

42,000

Bills Payable

32,000

Investmients

32,000

Profit & Loss A/c.

14,000

Stock

44,000

Machinery

34,000

Goodwill

20,C00

2,42,000

2,42,000

56 They admit Prasad into partnership on the following terms

a)

Furniture, Investrnents and Machincry to be reduced by 15%.

Stock to be taken as Rs.48,000.

c)

Prasad tobring Rs.32,000 as his Capital for 1/6th share and old partners to adjust thcir capitals accordingiy.

d)

Goodwill to be valued at Rs.26,000.

Outstanding rent amountod to Rs.1,800.

Prepaid salaries Rs.800.

Adjustment of Capitals to be made by Cash.

Prepare necssary accounts and Balance Shect of the New Firm.

ProblemNo.16 A &B are the partners in a firm sharing profits and loss in

thec

31-3-97 their Balance sheet was as follows

Libilitie Capitals

ratio of 3:

2.

t.

Asgei

20,000

Buildings

2,000

10,000

Furniture

2,000 15,50%

Reserve Fund

7,800

Stock

Sundry Creditors

5,000

Sundry Debtors

5,00C

Cash

3,300

Profit & Loss A/c.

2,50C

42,800

42,800

On the same date they admit 'C' as a partner and the new profit sharing ratio is Goodwill of the firm is valued at Rs.10,400, and C is to bring his share of 6:4:3.

Goodwill. He has to bring Rs.11,310 as Capital.

The Capital of A and B shall be adjusted on the basis of C's Capital (i.e. less cash is to be brought and if more cash is to be taken).

Prepare necessary Accounts and New Balance Sheet.

Problem No.17 The following is the balance sheet admitted as partner on the date

00

of A and

B as on 31st March 1995. C5

-57JRalamceSheot

A's Capital B's Capital

Creditors Gencral reserve Workmen's Compensation fund

20,000

Debtors

22,000

16,000

Land &Buildings

16,000

24,000

Plant & Machincry

20,000

32,000

Stock of goods

24,C00

8,000

Cash and Bank

8,CCC

1,00,000o

A &B shared profits in the ratio of3

agrced upon: 1.

1,00,000 :

2. Thc following terms of admission are

Land & Buildings have been revalued at Rs.36,000 and the Stock at Rs.32,000 The liability on workmen's compensation fund is dctermined at Rs.4,000.

C' bring in as his share of goodwill Rs.20,000.

C was to bring further cash as would make his capital equal to 20% of combined capital of partners A and B after the above revaiuation and adjustments are carriedout.

2.

3.

4.

5.

The further Profir sharing ratio are as under 2:2:

1.

Problem No.13 C and D sharing profits in the ratio of 5/8 and 3/8, their balance sheet is as

follows

Liabilites

ASSets

Creditors

10,000

Cash at Bank

Reserve Fund

20,000

Debtors

20,000

40,000

Stock

10,000

20,000

Investments

Capitals:

C

Plant

2,400

7,600 50,000 90,8U0

They adnit

.

2.

E

into partnership giving him 1/8 share on the following terms:

Stock to be depreciated by 20%, provision of 5% on debtors is to made for doubtful debts, Investments are to be brought into the business at an agreed value of Rs.6,000 and plant to be appreciated by 20%.

Goodwill is created at one year's average prolit of last three years which amnounts to Rs.12,000, Rs.16,000 and Rs.20,000 and the capitals of old partners to be increased in proportions to their shares.

-

58

EBrings in Cash as capital to the extent of 1/8th of the combined capitals of partners at the above adjustments.

3.

Problem No.19 Ram & Murthy

are partners

in a firm sharing profits & losses

in

3:I

ratio.

Their balance sheet on 1-1-88 was as follows:

Lsbilities

Assets 1,00,000

Plant

80,C00

Murthy Capital

60,000

Stock

20,00C

Creditors

40,000

Debtors

60,000

Cash

40,000

Ram Capital

2,00,0000

2,00,000

Chandra is now join in the fim. He agrees to pay Rs.40,000 for Goodwi! ard introduce one-half of the combined capital of two partners. Depreciation on pla and stock at 20% and 10% respectively and raise a Reserve for bad debts 10%% o Debtors. Chandra is given a fouth share on firm.

Show necessary iedger accounts and Balance Sheet.

Problem No.20 usha and Nisha are partners in a firm sharing profits in the ratio of 1S% 2nd 25%. Their balance sheet as on 1-1-1989

ASseis

Liabilities Creditors

40,000

Plant

80,CCC

Reserve fund

S0,000

Debtors

60,000

Usha

50,000

Stock

35,000

Nisha

40,000

Cash

5,000

Capitals:

1,80,000

1,30,030

They agree to admit Sandhya as a new partner.

Terng

.

Plant to be depreciated by 5%.

2.

Stock to be increased to Rs.40,000.

3.

Reserve for doubtful debts to remain at 10% on debtors.

A liability towards a creditors for Rs.500 is not recorded which is to broughi i= the books.

.

59Sandhya is to get 1/3 share ofprofit for which she has to pay an arnount eouai to her share in thnew firmßgoodwill valued at 3 years purchasc of the average profits of the st four years which were

Rs.25,000 1986 -Rs.40,000; 1987 5,000 (loss); 1988 Rs.20,000.

Sandhya 1985

-

6.

is also has to bring in capital cqual to her share in the total capital of the newly constituted firm.

Problem No.21 & B are the partners in the ratio of3 :2. Theirbalance sheet as on i -4-1992 follows Á

inas

Libilktic

Assets

Capitais

B Genera! Reserve

21,000

Goodwil

10,0C0

14,000

Plant& Machinery

15,0C0

14,000

Patents

Profit&Loss A/c.

7,000

Sundry Creditors

14,000

5,00C

Sundry Debtors

12,C00

Stock

18,000

Cash

10,C00

70,000

70,0CC

C admitted as partner on the following terms:.

a)

He is to be given 2/9 share in profits.

b)

He cannot bring his share of goodwill, the total goodwill of the firm is valued at Rs.24,000.

c)

The asseis are to be revalued at:

Plant at 20% less to the book value, Patents at Rs.4,000 and Stock at Rs.16,500.

A provision for doubtful debts is to be made at 5% on debtors.

e)

A liability of Rs. 1,000 is not likely to arise. The firm has to pay an amount of Rs.1,900 as compensation to a worker.

)

C has to contribute sufficient cash to make his capital 2/9th of the total capital of the firm.

The capitals of the ober partners are to be adjusted in the profit sharing proportions. Any difference being withårawn or brought in.

and Dec., 1980.

Cash in hand Cnsh at bank

Partners Capitals G

20,000

S

16,000

Sundry Creditors

Bills Payable

36,000 15,000

4,000

Bills receivnble Sundry debtors

A,900

1,882

21,000 4,200

Stock

Plant

152

&.

Machinery

Furniture Frechold Prcmises

1,060 1,700

13,560

55,000

55,000

terme "T' into partnership on the admit to agreed On 1st Jan., 1981, it was Rs.2,400 (less a provicio debtors Sundry busincss That he should bring into to Rs.500 and also goodwill r amounting Crcditors Sundry of 10% for bed debts). in the new firm is to be Rs.5.0on capital His Rs.1,500. of his business ofa valuation receives ore. and in conmsideration thereof, he cash in pays he which the balance of

firm. fifth share of the profits of the the foiiowing adjustments It was mutually agrced to make

; Plant & Machinery to be increased b Stock was to be reduced by Rs.800 that after the agreed further It was writtenoff. completely Rs.300 Furniture to be introduce sufficient cash should k "S" effected, been had adjustments above make his capital equal to that of "G".

ta

Prcblem No.23 The balance sheet of P

&as

on 31st Dec., 1995.

Assets

Liabilitieg

10,00

P's Capital

10,000

Goodwill

Q's Capital

20,000

Land & Buildings

P's Current A/c.

12,000

Furniture

Q's Current A/c.

8,000

Stock

Sundry Creditors

5,000

Sundry Debtors

3,5

Bank O.D.

2,500

Q's Loan Alc.

0,

57,500

12,00

I,00

21,0

57,50

Therew=Hat interest on Capital allowed. P ratio of :2. They ugreed to admit as partner &arc sharing profits in the into the firm. Besore that they 1

makc adjustments to the assets, as Land and Buildings are valued at Rs.24,000; Furniturc at Rs.2,000 and Goldwill at Rs.15,000. Rwill bring furniturc Rs.1,500 Goodwill Rs.5,000 and Stock Rs.9,500 from his soletradership.

As per the above agreement as want to share the profits equally in futurc and maintain their capitals and currents A/c.s with the cqual amounts. Adjustments should be made in cash Transfcr the Q's loan to his currcnt accounts.

Problem No.24 The balance shect ofP & Q as on 31st Dec., 1980:

Limbilities

Aaoeta

Sundry Creditors

6,000

Stock

Bank O.D.

3,000

Sundry Dcbtors

Capitals

:

P

12,000

Q

24.000

Bank 36,000

Current A/cs.

Furniture Land & Buildings

P

14,400

Q

9.600

Goodwill

25,200 4,200

12,000

I,000 14,600

12,C00

24,000 69,000

69,000

P & Q are partners in the ratio of1:2. They agreed to admit 'R' as new pariner from 1-1-1981. After "s admission, a ll partners came to a decission that the total capital should be Rs.60,000 and total amount of current a/c. at Rs.30,000 in the new firm, and to share the profits equally.

Adjustments made in the assets ofP & Q

Goodwill Rs. 18,000; Land, Buildings Rs.20,000 ; Furniture Rs.1,600 were

will bring

in as his capital

:

revalued.

Goodwill Rs.6,000 ; Furniture Rs.1,800 and Stock

Rs.I3,800.

Froblem No.25 The Balance sheet

of A & B as on 31-12-86 is as follows:

Linbilitie

Assets

Sundry Creditors

25,000

Plant & machinery

Capitals:

A

15,000

Fumiture

2,500

B

10,000

Sundry Debtors

8,000

10,000

Balance in Bank

9,500

50,000

50,000

They agreed to admit 'C' under the following terms 1.

was given C'is to bring Rs.10,000 as goodwill in cash for which he

2..

i.e. Goodwil!

The assets brought in by 'C' should be credited to his Acs.

1/3 share.

Rs.2,500; Furniture Rs.500 ; Stock Rs.5,000; Debtors Rs.4,500 3.

A&B revalued Plant & Machinery as Rs.13,000.

4.

Adjust the Capitals of A & B according their new ratioes i.c. less cash is to be brought and it more cash is to be taken.

Joumal, Ledger and Balance Sheet of New firm.

Problem No.26 The Balance Sheet of A & B as on 31st March 1982 who are sharing profñts in the ratio of 3:2.

Assets

Liabilnties

Outstanding

Cash in hand

12,000

Debtors

40,000

A

40,000

Less: Reserve

4.000

B

38,000

Bills receivable

15,000

Stock

18,000

Investments

14,000

Salaries

Capitals A/cs.

10,000

38,000

Creditors

36,000

Furniture

5,000

Buildings

30,C00

1,28,000

1,28,000

Cis admitting as new partner taking 1/4 share on the following terms: Cis to bring Rs.10,000 as his capital.

.

2.

3.

Furniture at Rs.4,500: Buildings Rs.45,000 are revalued.

It is agreed to show| Investments in the books at

RsA,300.

4.

The amount due on workmen's Compensation

5.

And agreed to show the Assets and Liabilities on their old values in the neve balance sheet except cash.

was Rs.1,200

Problem No.27 D.E,F are the partners in a partnership firm sharing Their balance sheet as on 1st June, 1984.

Linbilitieg

profit and losses equaly.

Assets

Bills Payable

4,800

Cash

Sundry Creditors

7,500

Dcbtors

12.300

Stock

12,9C0

Capitals:

2,100

D

18,300

Furniture

3,9C0

E

14,100

Buildings

21,000

7,500

39,900

52,200

the I.

2

52,200

They want to adnit "H' as a new partner giving him 1/4th share in the future on terma H

is to bring in Rs.10,500 as Goodwil1, and Rs.16,500 as Capital.

That old partners withdraw half of the goodwill from the firm.

3.

That Stock and Furniture be reduced by 10%.

4.

Provision at 5% on debtors for bad debts.

5.

A contingent liability on bills discounted to Rs.2,580.

Buildings to be raised to Rs.28,500 1.

As per the agreement there should be no changes in assets and cash) in the new balance sheet.

Liabilities (excep:

Problem No.28 A and B share profits in the ratio of 3/4 and 1/4 respectively.

Their balance sheet on March 31st 1990:

Liabilities

ASsets

Sundry Creditors

Capitals

41,500

A

80,000

B

66,000

1,46,000

1,87,500)

Cash at bank

12,500

Bills receivable

13,000

Debtors

16,000

Stock

60,C0C

Fixtures

11,000

Land & Buildings

75,000

1,87,500

fifth sharc That C pays Rs.40,000 as his capitnl for a sum is to of the half hat pnys Rs.20,000 for Goodwill.

1.

2.

be

viturarawn by A

and B

sion lor doubtful debte Provision a and That Stock and Fixtures be reduced by 10% Bills receivaO1C. and Debtors amounting to Rs.950 be creatcd on 20% appreciated by 200 bc Buildings Land and Tha tthe value of a liabilty to the exlent of darnages, for firm nere being a claim against the

.

4.

.

.

7.

Rs.1,000 should be created.

an not likely to be claimed is Creditors An item of Rs.650 includcd in Sundry hence should be writtenoff.

Liabilities are not 1o be aftered excer off Assets and values the that That agrced,

cash.

Problem No.29 partners in a firm sharing the profits in the ratio of9:7 Slow and Shine are the 1-1-72 giving him 1/4 share in the Trey decided to admit Steady as new partner from and Shine respectively, and profits, which he acquire in 3/16th and 1/16th from Slow Rs.20,000. All the amozit pays Rs.60,000 in cash to the fimm, in which Goodwill was contributed by Steady kept in an A/c. opened on his name.

The trial balance shows the foilowing A/c. prepared for he year ended Dec., 1972.

2,00,000

Sundry Assets

DrawingS

Slow's Capital

Shine's Capital

31s-

50,000 50,000

Slow

12,000

Steady's Alc.

60,000

Shine

10,000

Creditors

20,00

Steady

8,000

Profits in 1972

40,00

30,000

2,30,000

2,30,00

The profit of the year should be distributed after allowing interest on Cap all p.a. partners. to the 6% Prepare P/L adjustment A/c. and balance Sheet 31-12-1972.

Problem No.30 The baiancc shect

of x, Y and Z as on 31-3-89 A.gaets

LimbiNities

Sandry Creditors

4,000

Plant

40,0CC

Bank O.D.

8,000

Buildings

20,000

Debtors

13,000

40,000

Stock

10,000

20,000

Cash at bank

7,00C

Cash on hand

2,000

Capitals: X

20,000

80,000

92,0C0

92,000 They agreed to admit "A" from 1-4-90 on

theterms

futtve..

i.

All are agreed to share the profits equally in fuges.

2.

Depreciate Plant by 10% and appreciate Buildings by 15%.

3.

Z will take Sundry Debtors for Rs.12,000

4.

Stock was valued at Rs.12,000.

5.

X will take the responsibility of Creditors at their bock value.

.

7.

Bank O.D. was taken over by "Y".

The firms Goodwill is Calculated as 3 years purchasing price of the average of past 4 years profits and losses.

Rs.20,000 Rs.40,000.

I year

;

II Year Rs. 30,000;

l

Prepare necessary Alcs. and New Balance Sheet.

year Rs.10,000 (loss); IV year