Question 21 Chapter 6 - Unimax Class 12 Part 1 - 2021

Question 21 Chapter 6 – Unimax Class 12 Part 1 – 2021

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The solution of Question 21 Chapter 6 – Unimax Class 12 Part 1: –

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

21. X, Y and Z were partners sharing profits and losses in the ratio 4 : 3 : 3 respectively. Their balance Sheet as on 31st December, 2021 was as follows :

Liabilities	Amount	Assets		Amount
Sundry Creditors	7000	Land and Buildings		36000
Bills Payable	3000	Plant and Machinery		28000
Capital		Electric typewriter		8000
X	32000	Debtors	14000
Y	24000	Less : Reserve for doubtful debts	2000	12000
Z	20000	Bank		2000
Reserve	20000	Stock		20000

	106000			106000

On this date Y retires from the firm on the following terms :

The goodwill of the firm is to be valued at Rs. 14000.
Stock and Land and Buildings are to be appreciated by 10%.
Plant and Machinery and Electric typewriter are to be depreciated by 10%.
Sundry debtors are considered to be good.
There is a liability, of Rs. 2000 for the payment of outstanding salary to the employees of the firm.
This liability has not been shown in the above balance sheet, but the same is to be recorded now.
Partners decide not be maintain goodwill account in the books of the firm.
The amount payable to Y is to be transferred to his loan account.

Prepare the revaluation account, partners capital account, and the balance sheet of X and Z after Y’s retirement.

The solution of Question 21 Chapter 6 – Unimax Class 12 Part 1: –

Revaluation A/c

Particulars		Rs.	Particulars	Rs.
To Plant and Machinery		2800	By Stock	2000
To Electric typewriter		800	By Land and Buildings	3600
To Liability for outstanding salary		2000	By Debtors	2000
To Profit on revaluation transferred to capital a/cs
X (4/10)	800
Y (3/10)	600
Z (3/10)	600	2000

		7600		7600

Capital Accounts

Particulars	X	Y	Z	Particulars	X	Y	Z
To Y’s Capital a/c	2400		1800	By Balance b/d	32,00	24,000	20,000
To balance c/d	38400			By Revaluation a/c (Profit)	800	600	600
To Y’s Loan a/c		34800	24800	By Reserve	8000	6,000	6000
				By X’s capital		2400
				By Z’s capital		1800

	40800	34800	26600		40800	34800	26600

Balance Sheet (After Retirement)

Liabilities		Rs.	Assets	Rs.
Sundry Creditors (4000 – 100)		7000	Land and buildings	39600
Capital Accounts			Plant and Machinery	25200
B	38400		Electric typewriter	7200
S	24800	63200	Stock	22000
Bills Payable		3000	Bank	2000
Y’s Loan a/c		34800	Debtors	14000
Liability for outstanding salary		2000

		1,10,000		1,10,000

Working Note:

Y’s Share of goodwill = 3/10 X 14000 = Rs. 4200
Entry for adjustment of goodwill

X’s Capital a/c	Dr.	2400
Z’s Capital a/c	Dr.	1800
To Y’s Capital a/c			4200

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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)

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

The solution of Question 21 Chapter 6 – Unimax Class 12 Part 1: –

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

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