TS Grewal solution
This page includes solutions of all the Practical problems of this chapter from TS Grewal solution 2021-22 class 12.
Sacrificing and Gaining Share
When partners decides to change their existing profit sharing ratio, we need to calculate sacrificing and gaining ratio of all the partners. This is done using appropriate formulas. To know sacrificing ratio old ratio – new ratio is used. Question number 1 to 4 of TS Grewal solution 2021 edition are related to sacrificing and gaining share.
Accounting of Goodwill
At the time of change in profit sharing ratio, goodwill needs to be valued. This is required to know the share of sacrificing and gaining partner in goodwill. Gaining partner compensates sacrificing partner the amount of goodwill in his gaining ratio and sacrificing partner gets amount of goodwill as per his sacrificing partner. Practice question number 5 to 8 from TS Grewal solution 2021 to get command over this topic.
Accounting of Reserves, Accumulated Profits and Losses
Partners may have provisions and reserves from their profits and also accumulated profits which are not yet distributed to them. These reserves and accumulated profits are distributed to partners in their old ratio at the time of change in profit sharing ratio. Question number 9 to 19 are related to reserves, accumulated profits and losses.
Revaluation of Assets and Reassessment of Liabilities
Due to change in profit sharing ratio sacrificing partner also losses share in assets and liabilities. We need to revaluate assets and liabilities are reassessed. Revaluation account is prepare to know the profit or loss due to revaluation of assets and reassessment of liabilities. Profit or Loss in the revaluation account is distributed among partners in their old ratio. Question number 20 to 23 can be checked for this topic.
Preparation of Balance Sheet
Change in profit sharing ratio results re-constitution of firm. After all the revaluations and other adjustments of reserves, accumulated profits, goodwill etc. are completed, a new balance sheet is prepared for new firm. Question number 24 and 25 are related to balance sheet preparation.
Adjustment of Capital
Sometimes at the time of change in profit sharing ratio, partners also decide to change their capital proportions. Due to this we need to calculate the amount to be brought or withdrawn by a partner to match the desired capital. Question number 26 and 27 are related to adjustment of capital in case of change in profit sharing ratio.
Practical Problems
Sacrificing and Gaining Share – Question number 1-4
Accounting of Goodwill – Question number 5-8
Accounting of Reserves, Accumulated Profits and Losses – Question number 9-19
Revaluation of Assets and Reassessment of liabilities – Question number 20-23
Preparation of Balance Sheet – Question number 24-25
Adjustment of Capital – Question number 26-27