Q.No.49 | Chapter 6 – Retirement/Death of a Partner | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

1. Goodwill of the firm is valued at 1,12,500 and Y's share of it be adjusted into the accounts of X and Z who are going to share future profits in the ratio of 3: 2.
2. Fixed Assets be appreciated by 20%.
3. Stock be reduced to 75,000.
4. Y be paid amount brought in by X and Z so as to make their capitals proportionate to their new profit-sharing ratio.

Prepare Revaluation Account, Capital Accounts of all partners, and the Balance Sheet of the New Firm.

The solution of Question 49 Chapter 6 of +2-A: -

Revaluation Account

Particular		Amount	Particular		Amount
To Stock A/c		7,500	By Fixed Assets A/c		37,500
To Profit transferred to
X's Capital A/c	15,000
Y's Capital A/c	9,000
Z's Capital A/c	6,000	30,000
		37,500			37,500

 

Partners’ Capital Account

Part.	X	Y	Z	Part.	X	Y	Z
To Y’s Capital A/c	11,250	-	22,500	By Balance B/d	1,65,000	84,000	66,000
				By General Reserve A/c	11,250	6,750	4,500
To Bank A/c				By Revaluation A/c	15,000	9,000	6,000
				By X's Capital A/c	-	11,250	-
				By Z's Capital A/c		22,500
To Balance c/d	2,20,500	-	1,47,000	By Bank A/c	40,500		93,000
	2,31,750	1,33,500	1,69,500		2,31,750	1,33,500	1,69,500

 

Balance Sheet

Particular		Amount	Particular		Amount
Sundry Creditor		39,750	Bank		15,000
Employees Provident Fund		5,250	Debtors		97,500
			Stock		75,000
			Fixed Assets		2,25,000
Capital A/cs
X's Capital	2,20,500
Z's Capital	1,47,000	3,67,500
		4,12,500			4,12,500

Working Note:-

Total Capital Before X retirement = 1,80,000+ 54,000+ 1,33,500

= 3,67,500

Y's New Capital	=	Total Capital Before X retirement	X	Z's share
	=	3,67,500	X	3
				5
	=	Rs 2,20,500

 

Z's New Capital	=	Total Capital Before X retirement	X	Z's share
	=	3,67,500	X	2
				5
	=	Rs 1,47,500

 

Calculation of Addition/withdrawal of Capital by the Y and Z

Addition/withdrawal in/from Capital A/c	=	New Capital Amount	-	Balance of Capital Amount after all adjustments
Addition/withdrawal by X's in/from Capital A/c	=	2,20,500	-	1,80,000
	=	40,500/-

 

Addition/withdrawal by Z's in/from Capital A/c	=	1,47,500	-	54,000
	=	93,000/-

 

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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