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Question 38 Chapter 6 of +2-Part-1
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38 (Adjustment of Goodwill without raising Goodwill A/c Partner Loan A/c Journal) A B and C are carrying an business in partnership sharing profits and losses in the ratio of 3 :2: 1 respectively On 31st December, 2018, the Balance Sheet of the firm stood as follows:
Liabilities | Rs. | Assets | Rs. |
Creditors | 13,590 | Cash | 4,700 |
Capitals A | 15,000 | Debtors | 8,000 |
B | 10,000 | Stock | 11,690 |
C | 10,000 | Building | 23,000 |
Profit & loss A/c | 1,200 | ||
48,590 | 48,590 |
B retired on the following terms:
(i)Building appreciated by Rs.7,000.
(ii) Provision for bad debts is to make at 5% on debtors.
(iii) Goodwill of the firm valued at Rs. 9,000 and adjustment in this respect be made without raising goodwill account..
(iv) Rs. 5,000 to be paid to B immediately and the balance due to him be treated as loan carrying interest @ 6% per annum.
Pass journal entries to record the above-mentioned transactions and show the Balance Sheet of the firm as it would appear immediately after B’s retirement.
The solution of Question 38 Chapter 6 of +2 Part-1: –
Journal | |||||
Date | Particulars | L.F. | Debit | Credit | |
Building A/c | Dr. | 7,000 | |||
To Revaluation A/c | 7,000 | ||||
(Being profit of building transferred . ) | |||||
Revaluation A/c | Dr. | 400 | |||
To provision for doubtful debts A/c | 400 | ||||
(Being provision made on debtors . ) | |||||
Revaluation A/c | Dr. | 6,600 | |||
To A’s capital A/c | 3,300 | ||||
To B’s capital A/c | 2,200 | ||||
To C’s capital A/c | 1,100 | ||||
(Being revaluation on profit ) | |||||
A’s capital A/c | Dr. | 2,250 | |||
C’s capital A/c | Dr. | 750 | |||
To B’s capital A/c | 3,000 | ||||
(Being adjustment of goodwill ) | |||||
B’s capital A/c | Dr. | 5,000 | |||
To cash A/c | 5,000 | ||||
(Being part payment to B) | |||||
B’s capital A/c | Dr. | 10,200 | |||
To B’s loan A/c | 10,200 | ||||
(Being settlement of B’s A/c) | |||||
Partners’ Capital Account | |||||||
Particulars | A | B | C | Particulars | A | B | C |
To B’s capital A/c | 2,250 | 750 | By Balance b/d | 15,000 | 10,000 | 10,000 | |
To Cash | 5,000 | By Revaluation A/c | 3,300 | 2,200 | 1,100 | ||
To B’s loan A/c | 10,200 | By A’s capital A/c | 2,250 | ||||
By C’s capital A/c | 750 | ||||||
To Balance c/d | 16,050 | – | 10,350 | ||||
18,300 | 15,200 | 11,100 | 18,300 | 15,200 | 11,100 |
Balance Sheet | |||||
Liabilities | Amount | Assets | Amount | ||
Creditors | 13,590 | Cash | 900 | ||
B’s loan A/c | 10,200 | Debtors | 8,000 | ||
Capital | Less Provision | 400 | 7,600 | ||
A | 16,050 | Stock | 11,690 | ||
C | 10,350 | 26,400 | Building | 30,000 | |
50,190 | 50,190 |
Comment if you have any questions.
Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
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