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5.16 Double Entry Book Keeping—CBSE XII
You are required to:
(a) Pass Journal entries.
(b) Prepare Partners’ Capital Accounts.
(c) Balance Sheet of the new firm.
Show your workings clearly.
Solution: JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
2018
April 1 Cash/Bank A/c ...Dr. 40,800
To Charan’s Capital A/c 30,000
To Premium for Goodwill A/c 10,800
(Amount brought in by Charan as capital and 60% of his share of
Premium for Goodwill)
Premium for Goodwill A/c ...Dr. 10,800
Charan’s Current A/c ...Dr. 7,200
To Anil’s Capital A/c 12,000
To Sunil’s Capital A/c 6,000
(Share of Charan in goodwill credited to Anil’s Capital Account and
Sunil’s Capital Account in their sacrificing ratio) (WN 1)
Land and Building A/c ...Dr. 10,000
To Revaluation A/c 10,000
(Increase in value of Land and Building)
Revaluation A/c ...Dr. 7,500
To Stock A/c 7,000
To Provision for Doubtful Debts A/c 500
(Value of stock decreased and further provision for doubtful debts made)
Revaluation A/c ...Dr. 2,500
To Anil’s Capital A/c 1,500
To Sunil’s Capital A/c 1,000
(Gain (profit) on revaluation transferred to Old Partners’ Capital Accounts
in their old profit-sharing ratio)
Investments Fluctuation Reserve A/c ...Dr. 500
To Investments A/c 500
(Value of investments brought down to market value)
Workmen Compensation Reserve A/c ...Dr. 2,000
To Anil’s Capital A/c 1,200
To Sunil’s Capital A/c 800
(Workmen Compensation Reserve credited to Anil’s and
Sunil’s Capital Accounts in their old profit-sharing ratio)
Investments Fluctuation Reserve A/c ...Dr. 500
To Anil’s Capital A/c 300
To Sunil’s Capital A/c 200
(Excess Investments Fluctuation Reserve credited to Anil’s and Sunil’s
Capital Accounts in their old profit-sharing ratio)
Anil Capital A/c ...Dr. 7,600
Sunil Capital A/c ...Dr. 18,400
To Bank A/c 26,000
(Amount withdrawn by Anil and Sunil to make their
capitals proportionate)