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M.272 An Aid to Accountancy—CBSE XII

BALANCE SHEET OF NEW FIRM
as at 1st April, 2018
Liabilities ` Assets `
Creditors 26,100 Cash in Hand 10,000
Bills Payable 16,000 (` 18,000 + ` 26,120 + ` 15,720 – ` 49,840)
Capital A/cs: Debtors 25,000
A 62,760 Less: Provision for Doubtful Debts 3,000 22,000
C 41,840 1,04,600 Stock 16,200
Furniture 28,500
Machinery 70,000
1,46,700 1,46,700
Working Notes:
1. Calculation of Gaining Ratio: A B C
I. New Share 3/5 ... 2/5
II. Old Share 2/5 2/5 1/5
III. Gain/(Sacrifice) (I – II) 1/5 (Gain) (2/5) (Sacrifice) 1/5 (Gain)
Thus, Gaining Ratio of A and C = 1 : 1.
2. Adjustment of Goodwill:
B’s Share of Goodwill = 2/5 × ` 22,000 = ` 8,800, which will be contributed by A and C in their gaining ratio, i.e., 2 : 2 or 1 : 1.
Thus, A’s contribution = 1/2 of ` 8,800 = ` 4,400;
C’s contribution = 1/2 of ` 8,800 = ` 4,400.
3. Adjustment of Capitals: `
A’s Existing Capital (After all Adjustments) 36,640
C’s Existing Capital (After all Adjustments) 26,120
Amount Payable to B 49,840
Balance Required 10,000
1,22,600
Less: Existing Cash in Hand 18,000
Required Capital of A and C 1,04,600
Amount brought by A = (` 1,04,600 × 3/5) – ` 36,640 = ` 26,120
Amount brought by C = (` 1,04,600 × 2/5) – ` 26,120 = ` 15,720.
17. JOURNAL OF PQ LTD.

Date Particulars L.F. Dr. (`) Cr. (`)
Bank A/c ...Dr. 3,80,000
To Equity Shares Application A/c 3,80,000
(Being the application money received for 1,90,000 shares)
Equity Shares Application A/c ...Dr. 3,80,000
To Equity Share Capital A/c 2,00,000
To Equity Shares Allotment A/c 1,00,000
To Bank A/c (40,000 × ` 2) 80,000
(Being the application money adjusted)
Equity Shares Allotment A/c ...Dr. 4,00,000
To Equity Share Capital A/c 2,00,000
To Securities Premium Reserve A/c 2,00,000
(Being the allotment money due)