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Question 50 Chapter 6 of +2-A
50. X, Y, and Z are partners sharing profits in the ratio of 5: 3: 2. Y retires on 1st April 2019 from the firm, on which date capitals of X, Y, and Z, after all, adjustments are 1,03,680, 87,840, and 26,880 respectively. The Cash and Bank balances on that date were 9,600. Y is to be paid through the amount brought in by X and Z in such a way as to make their capitals proportionate to their new profit-sharing ratio which will be X 3/5 and Z 2/5. Calculate the amount to be paid or to be brought in by the continuing partners assuming that a minimum Cash and Bank balance of 7,200 was to be maintained and pass the necessary Journal entries.
Total Capital Before X retirement = 1,03,680 + 87,840 + 26,880
= 2,18,400
Availably of Cash = 9,600 - 7,200
= 2,400
Combined New Capital of X and Z = 2,18,400 - 2,400
= 2,16,000
| X's New Capital | = | Total Capital Before retirement | X | Z's share |
| = | 2,16,000 | X | 3 | |
| 5 | ||||
| = | Rs 1,29,600 |
| Z's New Capital | = | Total Capital Before retirement | X | Z's share |
| = | 2,16,000 | X | 2 | |
| 5 | ||||
| = | Rs 86,400 |
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 | = | 1,29,600 | - | 1,03,680 |
| = | 25,920 /- |
| Addition/withdrawal by Z's in/from Capital A/c | = | 86,400 | - | 26,880 |
| = | 59,520/- |
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.
This guide covers "Q.No.50 | Chapter 6 – Retirement/Death of a Partner | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1.
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