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Question 37 Chapter 6 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 37 Chapter 6 of +2- Part
Q-37. - CH-6 - Usha +2 Book 2018 - Solution

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Question 37 Chapter 6 of +2-Part-1

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37. ( Unrecorded liability / Joint Life policy )X, Y and Z were partners sharing losses in the ratio 4: 3: 3 respectively. Their balance sheet as on 31st December 2018 was as follows :

LiabilitiesRs.AssetsRs. 
Sundry creditors7,000Land & buildings 36,000
Bills payable 3,000Plant & machinery 28,000
Reserve 20,000Electric typewriter8,000
Capital Stock10,000
X32,000Joint life policy10,000
Y24,000Sundry debtors  
Z20,000Less : reserve  12,000
  Bank 2,000
 1,06,000 1,06,000

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

  1. The goodwill of the firm is to be valued at Rs. 14,000.
  2. Stock is appreciated by 20% and land and buildings are to be appreciated by 10%.
  3. Plant and machinery and electric typewriter are to be depreciated by 10%.
  4. Sundry debaters are considered to be good.
  5. There is a liability of Rs. 2,000 for the payment of maintaining salary to the employees of the firm
  6. This liability has not been shown in the above balance sheet, but the same is to be recorded now.
  7. The amount payable to Y to be transferred to his loss account
  8. J.L.P is surrendered at book value.
    Prepare the revaluation account, partners’ capital account, and the balance sheet of X and 2 after Y’s retirement.

The solution of Question 37 Chapter 6 of +2 Part-1: –

Revaluation account
Particulars
AmountParticularsAmount
To electric type writer A/c 800By stock 2,000
To plant & Machinery A/c 2800By land & building A/c 3,600
To outstanding salary 2000By reserve for debts 2,000
      
To capital A/c     
X800    
Y600    
Z6002,000   
  7600  7600

TREATMENT OF GOODWILL :

Particulars
L.F.
Value of the goodwill of the firm 14,000
Y’s share 4,200
To be debited to X & Y in new profit sharing ratio . Hence amount to be debited is  
X 2,400
Y1,800
Partners’ Capital Account 
ParticularsXYZParticularsXYZ
To Y’s capital A/c2,400 1,800By Balance b/d32,00024,00020,000
To Y’s loan A/c 34,800 By reserve fund8,0006,0006,000
    By Revaluation A/c800600600
    By X’s capital A/c 2,400 
    By Z’s capital A/c 1,800 
To Balance c/d 34,80024,800    
 40,80034,80026,600 40,80034,80026,600
Balance Sheet
Liabilities
AmountAssetsAmount
Creditors 7,000LAND & BUILDING 39,600
Bills payable 3,000Plant & Machinery 25,200
Y’s loan A/c 2,000Electric typewriter 7,200
Provision for outstanding salary 34,800Stock 12,000
Capital A/c  Debtors 14,000
X 38,400Bank 2,000
Y 28,400   
  1,10,000  1,10,000

Comment if you have any questions.
Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

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