Question 33 Chapter 6 - Unimax Class 12 Part 1 - 2021

Question 33 Chapter 6 - Unimax Class 12 Part 1 - 2021

33. A, B and C are partners in a firm whose balance sheet as on 31st December 2021 was as follows:

Liabilities		Amount	Assets		Amount
Creditors		7,000	Cash at Bank		6,400
General reserves		3,000	Debtors		9,000
Capital:			Stock		10,600
A	8,000		Furniture		2,000
B	6,000
C	4,000	18,000
		28,000			28,000

B retired on that date and in this connection it was decided to make the following adjustments:

1. To reduce stock and furniture by 5% and 10% respectively.
2. To provide for doubtful debts at 5% on debts.
3. Rent outstanding (not provided for as yet) was ₹ 260.
4. Goodwill was valued at₹4200.

A and C decided:

1. To share profit and loss in 5:3 respectively.
2. Not to show Goodwill in the books.
3. To readjust their capitals in profit sharing ratio.
4. To bring in sufficient cash to pay off B immediately and cash in hand will beb ₹1000.

The solution of Question 33 Chapter 6 - Unimax Class 12 Part 1: -

Revaluation account

Particulars	Rs.	Particulars		Rs.
To stock a/c	530	By loss on revaluation
To furniture a/c	200	A	480
To provision for d.d	450	B	480
To rent outstanding	260	C	480	1,440
	1,440			1,440

Partners Capital accounts

Particulars	A	B	C	Particulars	A	B	C
To loss on revaluation	480	480	480	By balance b/d	8,000	6,000	4,000
To B’s capital a/c	1,225		175	By G.R a/c	1,000	1,000	1,000
To cash a/c		7,920		By A’s capital a/c		1,225
To balance a/c	8,850		5,310	By C’s capital a/c		175
				By cash a/c	1,555		965
	10,555	8,400	5,965		10,555	8,400	5,965

Balance sheet 

Liabilities		Amount	Assets		Amount
Creditors		7,000	Cash at Bank (6400-1555-965-7920)		1,000
Capital A/C			Debtors	9,000
A	8,850		(-)prov.	450	8,550
B	5,310	14,160	Stock		10,070
Rent outstanding		260	Furniture		1,800
		21,420			21,420

Working note:

Calculations of capital of firm
Total capital= (A’s and C’s balance c/d)+required cash to be paid to B
Total capital =(7295+4345+2520)

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