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Question 32 Chapter 6 - Unimax Class 12 Part 1 - 2021
32. A, B and C distribute profits in the ratio of their capitals. B retires on 31st December 2021 prepare a journal and new balance sheet transferring the amount payable to B to his loan account:
| Liabilities | Amount | Assets |
Amount | ||
| Capital | Land and building | 2,00,000 | |||
| A | 1,80,000 | Machinery | 50,000 | ||
| B | 1,20,000 | Stock | 64,000 | ||
| C | 60,000 | Furniture | 18,000 | ||
| Creditors | 55,200 | Debtors | 40,000 | ||
| (-) reserves | 800 | 39,200 | |||
| Bank balance | 44,000 | ||||
| 4,15,200 | 4,15,200 | ||||
Insurance premium (previously debited to profit and loss account ) ₹6000 to be treated as unexpired.
Provision for doubtful debtsto be brouhaha upto 5% on Debtors. Land and building be appreciated by 20%. Provision for repair be maintained at ₹8000. Goodwill of the firm be valued at ₹43200. B’s share shall be adjusted
through capital accounts of A and C whose future profit ratio lies 3:1. • Total capital of the new firm to be ₹224000 in proportion to the sharing ratio (actual cash to be paid off or to be brought in.)
Revaluation account
| Particulars | Rs. | Particulars | Rs. | |
|---|---|---|---|---|
| To provision for d.d | 1,200 | By prepaid insurance a/c | 6,000 | |
| To provision for repairs | 8,000 | By building a/c | 40,000 | |
| To profit on revaluation | ||||
| A | 18,400 | |||
| B | 12,267 | |||
| C | 6,133 | 36,800 | ||
| 46,000 | 46,000 |
Partners Capital accounts
| Particulars | A | B | C | Particulars | A | B | C |
|---|---|---|---|---|---|---|---|
| To B’s capital a/c | 10,800 | 3,600 | By balance b/d | 1,80,000 | 1,20,000 | 60,000 | |
| To B’s loan a/c | 14,6667 | By profit on revaluation | 18,400 | 12,267 | 6, 133 | ||
| To bank a/c | 19,600 | 6,533 | By A’s capital a/c | 10,800 | |||
| To balance c/d | 1,68,000 | 56,000 | By C’s capital a/c | 3,600 | |||
| 1,98,400 | 14,6667 | 66,133 | 1,98,400 | 1,46,667 | 66,133 |
Balance sheet
| Liabilities | Amount | Assets | Amount | ||
|---|---|---|---|---|---|
| Capital a/c | Prepaid insurance | 6000 | |||
| A | 1,68000 | Land and building | 24000 | ||
| B | 56,000 | 2,24,000 | Machinery | 50000 | |
| B’s loan account | 1,46,667 | Stock | 64000 | ||
| Creditors | 55,200 | Furniture | 18000 | ||
| Provision for repairs | 8,000 | Debtors | 40000 | ||
| (-)reserves | 2000 | 38000 | |||
| Bank (44000-19600-6533) | 17867 | ||||
| 4,33,867 | 4,33,867 |
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)
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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