Q.No.23 | Chapter 6 – Retirement/Death of a Partner | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

Question 23 Chapter 6 of +2-A

23. X, Y, and Z are partners sharing profits and losses in the ratio of 5: 3: 2. Z retired and on the
date of his retirement, the following adjustments were agreed upon:
a) The value of Furniture is to be increased by 12,000.
b) The value of the stock to be decreased by 10,000.
c) The machinery of the book value of 50,000 is to be depreciated by 10%.
d) A Provision for Doubtful Debts @ 5% is to be created on debtors of the book value of 40,000.
e) Unrecorded Investment worth 10,000.
f) An item of 1,000 included in bills payable is not likely to be claimed, hence should be written back.
Pass necessary Journal entries.

The solution of Question 23 Chapter 6 of +2-A: -

Revaluation A/c

Particular		Amount	Particular		Amount
To Stock		10,000	By Furniture A/c		12,000
To Machinery A/c		5,000	By Investments A/c		10,000
To Provision for Doubtful Debts a/c		2,000	By Bills Payable A/c		1,000
To Profit transferred to
X’s Capital	3,000
Y’s Capital	1,800
Z’s Capital	1,200	6,000
		23,000			23,000

Journal Entries

Date	Particulars		L.F.	Debit	Credit
	Furniture A/c	Dr.		12,000
	To Revaluation A/c				12,000
	(Being Increase in the value of furniture transferred to revaluation account)
	Revaluation A/c	Dr.		10,000
	To Stock A/c				10,000
	(Being decrease in the value of the stock transferred to the revaluation account)
	Revaluation A/c	Dr.		5,000
	To Machinery A/c				5,000
	(Being decrease in the value of Machinery transferred to the revaluation account)
	Revaluation A/c	Dr.		2,000
	To Provision for Doubtful Debts A/c				2,000
	(Being Increase in liabilities to Revaluation Account)
	Investments A/c	Dr.		10,000
	To Revaluation A/c				10,000
	(Being Increase in the value of Investment transferred to revaluation account)
	Bills Payable A/c	Dr.		1,000
	To Revaluation A/c				1,000
	(Being Increase in the value of Bills Receivable transferred to revaluation account)
	Revaluation A/c	Dr.		6,000
	To X’s Capital A/c				3,000
	To Y’s Capital A/c				1,800
	To Z’s Capital A/c				1,200
	(Being Revaluation profit transferred to Partners′ Capital Accounts)

 

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

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