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Question 30 Chapter 6 of +2-A
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30. X, Y, and Z were partners in a firm sharing profits in the ratio of 2 : 2: 1. Their Balance Sheet as of 31st March 2019 was:
| Liabilities | Amount | Assets | Amount | |
| Creditors | 49,000 | Cash | 8,000 | |
| Reserve | 18,500 | Debtors | 19,000 | |
| Capital A/cs | Stock | 42,000 | ||
| X | 82,000 | Building | 2,07,000 | |
| Y | 60,000 | Patents | 9,000 | |
| Z | 75,500 | 2,17,500 | ||
| 2,85,000 | 2,85,000 |
Y retired on 1st April 2019 on the following terms:
a) Goodwill of the firm was valued at 70,000 and was not to appear in the books.
b) Bad Debts amounted to 2,000 were to be written off.
c) Patents were considered valueless.
Prepare Revaluation Account, Partners’ Capital Accounts, and the Balance Sheet of X and Z after Y’s retirement.
The solution of Question 30 Chapter 6 of +2-A: –
| Revaluation Account | |||||
| Particular | Amount | Particular | Amount | ||
| Bad Debts | 2,000 | ||||
| Patents | 9,000 | ||||
| Loss transferred to: | |||||
| X’s Capital | 4,400 | ||||
| Y’s Capita | 4,400 | ||||
| Z’s Capital | 2,200 | 11,000 | |||
| 11,000 | 11,000 | ||||
| Partners’ Capital Account | |||||||
| Part. | X | Y | Z | Part. | X | Y | Z |
| To Revaluation | 4,400 | 4,400 | 2,200 | By Balance B/d | 82,000 | 60,000 | 75,500 |
| To Y’s Capital A/c | 18,667 | – | 9,333 | By Reserve Old Ratio | 7,400 | 7,400 | 3,700 |
| To Y’s Loan A/c | – | 91,000 | – | By X’s Capital A/c | – | 18,667 | – |
| By Z’s Capital A/c | – | 9,333 | – | ||||
| To Balance c/d | 66,333 | – | 67,667 | ||||
| 89,400 | 95,400 | 79,200 | 89,400 | 95,400 | 79,200 | ||
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| Balance Sheet | |||||
| Liabilities | Amount | Assets | Amount | ||
| Creditors | 49,000 | Cash | 8,000 | ||
| Y’s Loan | 91,000 | Debtors | 19000 −2000 | 17,000 | |
| Capital: | Stock | 42,000 | |||
| X | 66,333 | Building | 2,07,000 | ||
| Z | 67,667 | 1,34,000 | |||
| 2,74,000 | 2,74,000 | ||||
Working Note:-
Calculation of Gaining Ratio
Old Ratio X, Y and Z = 2: 2: 1
Y retires from the firm
∴Gaining Ratio = 2 : 1
Adjustment of Goodwill
Goodwill of the firm = Rs 70,000
| Y’s Share of Goodwill | = | 70,000 | X | 2 |
| 5 | ||||
| = | Rs 28,000 |
This share of goodwill is to be distributed between X and Z in their gaining ratio i. e. 2: 1
| X‘s Share | = | 28,000 | X | 2 |
| 3 | ||||
| = | Rs 18,667 |
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| Z‘s Share | = | 28,000 | X | 1 |
| 3 | ||||
| = | Rs 9,333 |
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
