Question 20 Chapter 6 - Unimax Class 12 Part 1 - 2021

Question 20 Chapter 6 - Unimax Class 12 Part 1 - 2021

20. N, B and S are partners in a business sharing profits in the ratio of 1/2 : 1/3 : 1/6. Their Balance Sheet as on 31st December, 2020 was as under :

Liabilities	Amount	Assets	Amount
Sundry Creditors	4,000	Cash	800
Bills Payable	800	Stock	5200
Capital		Debtors	6000
N	8000	Plant and Machinery	4800
B	6000	Buildings	7200
S	5200
	24000		24000

On 1st January, 2021 N retired from the firm and the assets of the firm were revalued as under :

Goodwill	1600
Stock	4800
Debtors	5600
Plant and Machinery	4400
Buildings	8800

Creditors agreed to a discount of 2.5 . Assuming that the above adjustments are duly carried through, prepare revaluation account, (Profit and Loss adjustment account), partner’s capital accounts and the balance sheet of B and S. Amount due to N on retirement was agreed to be transferred to his loan account.

The solution of Question 20 Chapter 6 - Unimax Class 12 Part 1: -

Revaluation A/c

Particulars		Rs.	Particulars	Rs.
To Stock		400	By Buildings	1600
To Debtors		400	By Creditors	100
To Plant and Machinery		400
To Profit on revaluation transferred to capital a/cs
N (3/6)	250
B (2/6)	167
S (1/6)	83	500
		1700		1700

Capital Accounts

Particulars	N	B	S	Particulars	N	B	S
To N’s Capital a/c		533	267	By Balance b/d	8000	6000	5200
To balance c/d				By B’s Capital a/c	533
To N’s Loan a/c	9050	5634	5016	By S’s Capital a/c	267
				By Revaluation a/c (Profit)	250	167	83
	9050	6167	5283		9050	6167	5283

Balance Sheet (After Retirement)

Liabilities		Rs.	Assets	Rs.
Sundry Creditors (4000 – 100)		3900	Cash	800
Capital Accounts			Stock	4800
B	5634		Debtors	5600
S	5016	10650	Plant and Machinery	4400
Bills Payable		800	Buildings	8800
N’s Loan a/c		9050
		24400		24400

Working Note: 

N’s Share of goodwill = 3/6 X 1600 = Rs. 800
Entry for adjustment of goodwill

B’s Capital a/c	Dr.	533
S’s Capital a/c	Dr.	267
To N’s Capital a/c			800

 

https://tutorstips.com/retirement-of-a-partner-explained-with-illustration/

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 - Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 - Accounting for Partnership Firms - Fundamentals
• Chapter No. 3 - Goodwill: Nature and Valuation
• Chapter No. 4 - Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 - Admission of a Partner
• Chapter No. 6 - Retirement/Death of a Partner
• Chapter No. 7 - Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 - Company Accounts -  Accounting for Share Capital
• Chapter No. 9 - Company Accounts - Issue of Debentures
• Chapter No. 10 - Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 - Financial Statements of a Company
• Chapter No. 2 - Financial Statement Analysis 
• Chapter No. 3 - Tools of Financial Statement Analysis - Comparative Statements and Common- Size Statements
• Chapter No. 4 - Accounting Ratios
• Chapter No. 5 - Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication