# Question 36 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 36 Chapter 6 of +2-A

Question 36 Chapter 6 of +2-A

36. Pankaj, Naresh, and Saurabh are partners sharing profits in the ratio of 3:2:1. On 1st April 2019, Naresh retired on that date, Balance Sheet of the firm was as follows:

 Liabilities Amount Assets Amount General Reserve 12,000 Bank 7,600 Sundry Creditors 15,000 Debtors 6,000 Bills Payable 12,000 Less: Provision for Doubtful Debts 400 5,600 Outstanding Salary 2,200 Stock 9,000 Provision for Legal Damages 6,000 Furniture 41,000 Capital A/cs: Premises 80,000 Pankaj’s Capital 46,000 Naresh’s Capital 30,000 Saurabh’s Capital 20,000 96,000 1,43,200 1,43,200

1. Premises have appreciated by 20%, stock depreciated by 10%, and provision for doubtful debts was to be made 5% on debtors. Further, provision for legal damages is to be made for 1,200 and furniture to be brought up to 45,000.
2. Goodwill of the firm is valued at 42,000.
3. 26,000 from Naresh’s Capital Account be transferred to his Loan Account and the balance be paid through the bank: if required, the necessary loan may be obtained from the bank.
4. The new profit-sharing ratio of Pankaj and Saurabh is decided to be 5: 1

Give the necessary Ledger Accounts and Balance Sheet of the firm after Naresh’s retirement

## The solution of Question 36 Chapter 6 of +2-A: –

 Revaluation Account Particular Amount Particular Amount To Stock A/c 900 By Premises A/c 16,000 To Provision for Legal Damages A/c 1,200 By Provision for Doubtful Debts A/c 100 To Revaluation Profit A/c 1,500 By Furniture A/c 4,000 To Profit transferred to Pankaj’s Capital A/c 9,000 Naresh’s Capital A/c 6,000 Saurabh’s Capital A/c 3,000 18,000 20,100 20,100

 Partners’ Capital Account Part. X Y Z Part. X Y Z To Naresh’s Capital A/c(Goodwill) 14,000 – – By Balance B/d 46,000 30,000 20,000 By General Reserve 6,000 4,000 2,000 To Naresh’s Loan A/c – 26,000 – By Revaluation A/c 9,000 6,000 3,000 To Bank A/c – 28,000 – By Pankaj’s Capital A/c (Goodwill) – 14,000 – To Balance c/d 47,000 – 25,000 61,000 54,000 25,000 61,000 54,000 25,000

 Bank Account Liabilities Amount Assets Amount To Balance b/d 7,600 By Naresh’s Capital A/c 28,000 To Bank Loan A/c (Balancing Figure) 20,400 28,000 28,000

 Balance Sheet Liabilities Amount Assets Amount Sundry Creditors 15,000 Debtor 6,000 Bills Payable 12,000 Less: Provision 300 5,700 Bank Loan 20,400 Stock 8,100 Outstanding Salaries 2,200 Furniture 45,000 Provision for Legal Damages 7,200 Premises 96,000 Naresh’s Loan 26,000 Capital: Pankaj’s Capital 47,000 Saurabh’s Capital 25,000 72,000 1,54,800 1,54,800

#### Calculation of Gaining Ratio

Old Ratio of X, Y, and Z = 3:2:1
Naresh retires from the firm.

New Ratio of N and S = 5:1

Gaining Ratio = New Ratio – Old Ratio

 Pankaj’s Gaining Share = 5 – 3 6 6 = 5 – 3 6 = 2 6
 Saurabh’s Gaining Share = 1 – 1 6 6 = 1 – 1 6 = 0 6

Goodwill of the firm = Rs 42,000

 Naresh’s Share of Goodwill = 42,000 X 2 6 = Rs 14,000

Pankaj’s gain = Pankaj’s gaining the share of Naresh So He will pay the whole of the amount of Naresh’s share of Goodwill

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. 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