Question 37 Chapter 6 - Unimax Class 12 Part 1 - 2021

Question 37 Chapter 6 – Unimax Class 12 Part 1 – 2021

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The solution of Question 37 Chapter 6 – Unimax Class 12 Part 1: –

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

37. The balance sheet of Authur, Baldwin and Curtis who were sharing profits in proportion to their capitals stood as follows on 31 December 2021.

Liabilities		Amount	Assets		Amount
Sundry creditors		6,900	Cash at Bank		5,500
Capital a/c			Sundry Debtors	5,000
Arthur	20,000		(-)reserves	100	4,900
Baldwin	15,000		Stock		8,000
Curtis	10,000	45,000	Plant and machinery		8,500
			land and building		25,000

		51,900			51,900

Mr. Baldwin retires and the following readjustments of the assets and liabilities have been agreed upon before the ascertainment of the amount payable by the firm to Mr. Baldwin:

That the stock be depreciated by 5%
The reserves for doubtful debts be brought upto 5% on Debtors
The factory land and building be appreciated by 20%
A provision of ₹770 be made in respect of outstanding legal charges
The goodwill for the entire firm as newly constituted be fixed at ₹28000 between Arthur and Curtis in the proportion of five- eight and three-eight after passing entries in their accounts for goodwill (i.e. actual cash to be paid off to or to be brought in by continuing partners as the case may be.)

Pass the journal entries to give effect to the above arrangements and prepare the balance sheet of Arthur and Curtis transferring Baldwin’s share of capital and goodwill to be separate loan account in his name.

The solution of Question 37 Chapter 6 – Unimax Class 12 Part 1: –

Revaluation account

Particulars		Rs.	Particulars	Rs.
To stock a/c		400	By land and building a/c	5,000
To reserve for d.d. a/c		150
To provision for legal charges		770
To profit on revaluation
Arthur	1,635
Baldwin (4:3:2)	1,227
Curtis	818	3,680

		5,000		5,000

Partners Capital accounts

Particulars	Arthur	Baldwin	Curtis	Particulars	Arthur	Baldwin	Curtis
To Baldwin’s capital a/c	1,950		1,650	By balance b/d	20,000	15,000	10,000
To Baldwin loan a/c		19,827		By profit on revaluation.	1,635	1,227	818
To cash a/c	2,185			By Arthur		1,950
To balance c/d	17,500		10,500	By Curtis		1,650
				By Cash a/c			1,332

	21,635	19,827	12,150		21,635	19,827	12,150

Balance sheet

Liabilities		Amount	Assets		Amount
S. Creditors		6,900	Cash (5500+1332-2185)		4,647
Capitals			Debtors	5,000
Arthur	17,500		(-) reserves	250	4,750
Curtis	10,500	28,000	Stock		7,600
Baldwin loan a/c		19,827	Plant and machinery		8,500
Provision for repairs		770	Land and building		30,000

		55,497			55,497

WORKING NOTE:

Calculation of G.R.:
Arthur =5/8 – 4/9= 45/72-32/72 = 13/72
Curtis = 3/8 – 2/9 = 27/72 – 16/72 = 11/72
G.R. = 13:11.

Retirement of a Partner – Explained with Illustration

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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 37 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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