T.S. Grewal’s Double Entry Book Keeping—Accounting for Not-for-Profit Organisations and Partnership Firms
1. A and B are partners sharing profits in the ratio of 4 : 3. Their Balance Sheet as at 31st March, 2020 stood as:
Liabilities
` Assets `
Sundry Creditors 28,000 Cash 20,000
Reserve 42,000 Sundry Debtors 1,20,000
Capital A/cs: Stock 1,40,000
A 2,40,000 Fixed Assets 1,50,000
B 1,20,000 3,60,000
4,30,000 4,30,000
They decided that with effect from 1st April, 2020, they will share profits and losses in the ratio of
2 : 1. For this purpose they decided that:
(i) Fixed Assets are to be reduced by 10%.
(ii) A Provision for Doubtful Debts of 6% be made on Sundry Debtors.
(iii) Stock be valued at ` 1,90,000.
(iv) An amount of ` 3,700 included in Creditors is not likely to be claimed.
Partners decided to record the revised values in the books. However, they do not want to disturb the
Reserve. You are required to pass Journal entries, prepare Capital Accounts of Partners and the revised
Balance Sheet. [Ans.: Gain (Profit) on Revaluation—` 31,500; Adjustment for Reserve: Dr. A’s Capital A/c
and Cr. B’s Capital A/c by ` 4,000; Capitals: A—` 2,54,000; B—` 1,37,500 and
Balance Sheet Total—` 4,57,800.]
2. X, Y and Z share profits as 5 : 3 : 2. They decide to share their future profits as 4 : 3 : 3 with effect from
1st April, 2020. On this date the following revaluations have taken place:
Book Values (`) Revised Values (`)
Investments 22,000 25,000
Plant and Machinery 25,000 20,000
Land and Building 40,000 50,000
Outstanding Expenses 5,600 6,000
Sundry Debtors 60,000 50,000
Trade Creditors 70,000 60,000
Pass necessary adjustment entry to be made because of the above changes in the values of assets and
liabilities. However, old values will continue in the books.
[Ans.: Dr. Z’s Capital A/c and Cr. X’s Capital A/c—` 760.]
3. X, Y and Z are partners in a firm sharing profits and losses as 5 : 4 : 3. Their Balance Sheet as at
31st March, 2020 was:
Liabilities
` Assets `
Sundry Creditors 40,000 Cash at Bank 40,000
Outstanding Expenses 15,000 Sundry Debtors 2,10,000
General Reserve 75,000 Stock 3,00,000
Capital A/cs: Furniture 60,000
X 4,00,000 Plant and Machinery 4,20,000
Y 3,00,000
Z 2,00,000 9,00,000
10,30,000 10,30,000
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1. A and B are partners sharing profits in the ratio of 4 : 3. Their Balance Sheet as at 31st March, 2020 stood as:
Liabilities
` Assets `
Sundry Creditors 28,000 Cash 20,000
Reserve 42,000 Sundry Debtors 1,20,000
Capital A/cs: Stock 1,40,000
A 2,40,000 Fixed Assets 1,50,000
B 1,20,000 3,60,000
4,30,000 4,30,000
They decided that with effect from 1st April, 2020, they will share profits and losses in the ratio of
2 : 1. For this purpose they decided that:
(i) Fixed Assets are to be reduced by 10%.
(ii) A Provision for Doubtful Debts of 6% be made on Sundry Debtors.
(iii) Stock be valued at ` 1,90,000.
(iv) An amount of ` 3,700 included in Creditors is not likely to be claimed.
Partners decided to record the revised values in the books. However, they do not want to disturb the
Reserve. You are required to pass Journal entries, prepare Capital Accounts of Partners and the revised
Balance Sheet. [Ans.: Gain (Profit) on Revaluation—` 31,500; Adjustment for Reserve: Dr. A’s Capital A/c
and Cr. B’s Capital A/c by ` 4,000; Capitals: A—` 2,54,000; B—` 1,37,500 and
Balance Sheet Total—` 4,57,800.]
2. X, Y and Z share profits as 5 : 3 : 2. They decide to share their future profits as 4 : 3 : 3 with effect from
1st April, 2020. On this date the following revaluations have taken place:
Book Values (`) Revised Values (`)
Investments 22,000 25,000
Plant and Machinery 25,000 20,000
Land and Building 40,000 50,000
Outstanding Expenses 5,600 6,000
Sundry Debtors 60,000 50,000
Trade Creditors 70,000 60,000
Pass necessary adjustment entry to be made because of the above changes in the values of assets and
liabilities. However, old values will continue in the books.
[Ans.: Dr. Z’s Capital A/c and Cr. X’s Capital A/c—` 760.]
3. X, Y and Z are partners in a firm sharing profits and losses as 5 : 4 : 3. Their Balance Sheet as at
31st March, 2020 was:
Liabilities
` Assets `
Sundry Creditors 40,000 Cash at Bank 40,000
Outstanding Expenses 15,000 Sundry Debtors 2,10,000
General Reserve 75,000 Stock 3,00,000
Capital A/cs: Furniture 60,000
X 4,00,000 Plant and Machinery 4,20,000
Y 3,00,000
Z 2,00,000 9,00,000
10,30,000 10,30,000
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