ANSWERS - Partnership Accounts, As-(1, 7, 9)

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 Time-2.30                   ANSWERS - Partnership Accounts, As-(1, 7, 9)       Total Marks-60

Question 5: Answer:

	`
Cost of construction till date	16,24,750
Add: Estimated future cost	8,00,250
Total estimated cost of construction	24,25,000

Percentage of completion till date to total estimated cost of construction

= (16,24,750 /24,25,000)100 = 67%

Proportion of total contract value recognised as revenue [as per AS 7 (Revised)] for the year ended 31st March, 2012 = Contract price x percentage of completion

= ` 21,25,000 x 67% = ` 14,23,750

Thus, ` 14,23,750 should be charged to revenue in the final accounts for the year ended 31st March, 2012.

Question 8:Answer:

Revaluation Account

Particulars	`	Particulars	`
To Stock	9,000	By Provision for doubtful debts	225
To Furniture & fixtures	1,650	By Land & buildings	22,500
To Provision for doubtful B/R	1,650	By Mr. X (Debtor)	975
To Unaccrued incomes	1,275
To Workmen compensation claim	225
To Profit on revaluation t/f to:
P’s capital A/c	7,425
T’s capital A/c	2,475
	23,700		23,700

Partner’s Capital A/C

Particulars	P	T	O	Particulars	P	T	O
To P’s Capital A/c To T’s Capital A/c To Balance c/d By Bank A/C To T’s Current A/c To Balance c/	- - 146250 - 146250 - 180000 180000	- - 108750 - 108750 48750 60000 108750	22500 7500 30000 60000 60000 - 60000 60000	By Balance b/d By Rev A/c By P & L A/ By GR By Contingency By O’s Capital A/c By Balance b/d By P’s Current A/c	110700 7425 3375 1125 1125 22500 146250 146250 33750 180000	96900 2475 1125 375 375 7500 108750 108750 - 108750	- - - - - - 60000 30000 30000 60000

Balance Sheet of M/s. P, T & O as on 31st March, 2013

Liabilities	`	Assets	`	`
Sundry creditors Employees’ provident	60,000	Cash at bank (5,250+60,000)	33,000	65,250
fund	6,150	Bills receivable
Unaccrued incomes	1,275	Less: Provision	(1,650)	31,350
Workmen            compensation claim	225	Debtors	25,500
P’s capital	1,80,000	Less: Provision	(1,275)	24,225
T’s capital	60,000	Mr. X		975
O’s capital	60,000	Stock ( ` 90,000 – ` 9,000)		81,000
T’s current A/c	48,750	Furniture         &            fixtures (` 16,500 – ` 1,650)		14,850
		Land & buildings (` 1,12,500+ ` 22,500)		1,35,000
		P’s current A/c		33,750
		O’s current A/c		30,000
	4,16,400			4,16,400

Working Notes:

1. Calculation of sacrificing ratio

              P=3/4 - 3/5 = (15-12)/20 = 3/20

              T=1/4 – 1/5 = (5-4)/20 = 1/20

   Therefore Sacrificing Ration of P & T is 3 : 1

2 . Calculation of goodwill

Total profits of last three completed years = ` 45,000 + ` 60,000 + ` 75,000

                                                                           = ` 1,80,000

Average profits of last three completed years = ` 1,80,000/3 = ` 60,000 Goodwill of the firm                            

                                                                                = ` 60,000 ×2½ = ` 1,50,000

Incoming partner's share of Goodwill = ` 1,50,000 × 1/5= ` 30,000 Shared by P & T in 3:1 = 22,500 : ` 7,500

3. Calculation of  Partner’s Capital  

      Total capital of the firm = ` 60,000 × 5 = 3,00,000

      P’s new capital = ` 3,00,000 x 3/5 = ` 1,80,000

      T’s new capital = ` 3,00,000 x 1/5 = ` 60,000