Question 22 Chapter 6 - Unimax Class 12 Part 1 - 2021

Question 22 Chapter 6 - Unimax Class 12 Part 1 - 2021

22. A, B and C are carrying on business in partnership sharing profits and losses in the ratio of 3 : 2 : 1 respectively. On 31st December, 2021, the Balance Sheet of the firm stood as follows :

Liabilities	Amount	Assets	Amount
Sundry Creditors	13590	Cash	5900
Capital		Debtors	8000
A	15000	Stock	11690
B	10000	Buildings	23000
C	10000
	48590		48590

B retired on the above mentioned date on the following terms :

1. Buildings be appreciated by Rs. 7000.
2. Provision for bad debts be made at 5% on debtors.
3. Goodwill of the firm be valued at Rs. 9000 and adjustment in this respect be made without raising goodwill account.
4. Rs. 5000 be paid to B immediately and the balance due to him be treated as a loan carrying interest @ 6% per annum.

Pass the journal entries to record the above mentioned transactions and show the balance sheet of the firm as it would appear immediately after B’s retirement.

The solution of Question 22 Chapter 6 - Unimax Class 12 Part 1: -

Revaluation A/c

Particulars		Rs.	Particulars	Rs.
To Provision for bad debts		400	By By Buildings a/c	7000
To Profit on revaluation transferred to capital a/cs
A (3/6)	3300
B (2/6)	2200
C (1/6)	1100	6600
		7000		7000

Capital Accounts

Particulars	X	Y	Z	Particulars	X	Y	Z
To B’s Capital a/c	2250		750	By Balance b/d	15000	10000	10000
To Cash a/c		5000		By A’s Capital a/c		2250
To B’s Loan a/c				By C’s Capital a/c		750
To Balance c/d	16050	10200	10350	By Revaluation a/c (Profit)	3300	2200	1100
	18300	15200	11100		18300	15200	11100

Balance Sheet (After Retirement)

Liabilities		Rs.	Assets		Rs.
Sundry Creditors		13590	Cash (5900 – 5000)		900
Capital Accounts			Debtors	8000
A	16050		Less : Provision	400	7600
B	10350	26400	Stock		11690
B’s Loan a/c		10200	Buildings (23000 + 7000)		30000
		50190			50190

Working Note: 

B’s Share of goodwill = 2/6 X 9000 = Rs. 3000
Entry for adjustment of goodwill

A’s Capital a/c	Dr.	2250
C’s Capital a/c	Dr.	750
To B’s Capital a/c			3000

 

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