Question 7 (Choice 2) - CBSE Class 12 Sample Paper for 2022 Boards [Term 2] - Accounts - Solutions to CBSE Sample Paper - Accounts Class 12

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Gini, Bini and Mini were in partnership sharing profits and losses in the ratio of 5:2:2. Their Balance Sheet as at 31st March, 2021 was as follows: Balance Sheet as at 31st March,2021 Liabilities Amount Assets Amount Sundry Creditors 56,500 Cash 1,17,300 Bank Overdraft Workmen's 61,500 Debtors 38,000 Compensation Reserve Capitals: 32,000 Less: Provision For Doubtful Debts (2,300) 35,700 Gini 4,60,000 Inventories 1,34,000 Bini 3,00,000 Machinery 1,00,000 Mini 2,90,000 Furniture 1,80,000 10,50,000 Building 5,70,000 Goodwill 63,000 Total 12,00,000 Total 12,00,000 On 31st March, 2021, Gini retired from the firm. All the partners agreed to revalue the assets and liabilities on the following basis: (i) Bad debts amounted to ₹ 5,000. A provision for doubtful debts was to be maintained at 10% on debtors. (ii) Partners have decided to write off existing goodwill. (iii)Goodwill of the firm was valued at ₹ 54,000 and be adjusted into the Capital Accounts of Bini and Mini, who will share profits in future in the ratio of 5:4. (iv)The assets and liabilities valued as: Inventories ₹1,30,000; Machinery ₹ 82,000; Furniture ₹1,95,000 and Building ₹ 6,00,000. (v) Liability of ₹23,000 is to be created on account of Claim for Workmen Compensation. (vi) There was an unrecorded investment in shares of ₹ 25,000. It was decided to pay off Gini by giving her unrecorded investment in full settlement of her part payment of ₹ 28,000 and remaining amount after two months. Prepare Revaluation Account and Partners’ Capital Accounts as on 31st March, 2021. Answer REVALUATION ACCOUNT Parrticulars Amount Particulars Amount Bad Debts 2700 By Furniture A/c 15000 Provision for doubtful debts 3300 By Building A/c 30000 To Stock A/c 4000 By Investments A/c 28000 To Machinery A/c 18000 To Profit transferred to Gini's Capital A/c 25000 Bini's Capital A/c 10000 Mini's Capital A/c 10000 73000 73000 PARTNERS CAPITAL ACCOUNT Parrticulars GINI BINI MINI Parrticulars GINI BINI MINI To Goodwill A/c 35000 14000 14000 By Balance b/d 460000 300000 290000 To Gini's Capital A/c 18000 12000 By Bini's Capital A/c 18000 To Investment 28000 By Mini's Capital A/c 12000 To Gini's Loan A/c 457000 By Workmen compensation 5000 2000 2000 To Balance c/d 280000 276000 By Revaluation A/c 25000 10000 10000 520000 312000 302000 520000 312000 302000 Working Notes :- Goodwill of the firm = 54000 Calculation of Gaining Ratio :- Gaining Ratio = New profit Share - Old profit Share Old Ratio = 5 : 2 : 2 New Ratio = 5 : 4 Bini's Gain = 5/9 - 2/9 = 3/9 Mini's Gain = 4/9 - 2/9 = 2/9 Gini's share of Goodwill = 54000 x 5/9 = 30000 This share of goodwill will be contributed by Bini and Mini in their gaining ratio, 3:2 Bini's Contribution = 30000 x 3/5 = 18000 Mini's Contribution = 30000 x 2/5 = 12000 *Workmen Compensation Reserve of 23000 will be credited to workmen compensation claim(as a liability) and the balance will be credited to partners capital accounts which is 9000 (32000 - 23000)