# Question 39 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 39 Chapter 6 of +2-A

Question 39 Chapter 6 of +2-A

39. Following is the Balance Sheet of X, Y, and Z as of 31st March 2019. They shared profits in the ratio of 3 : 3 : 2:

 Liabilities Amount Assets Amount Sundry Creditors 2,50,000 Cash at Bank 50,000 General Reserve 80,000 Bills Receivable 60,000 Partners’ Loan A/cs: Sundry Debtors 80,000 X’s Loan 50,000 Less: Provision for Doubtful Debts 4,000 76,000 Y’s Loan 40,000 Stock 1,24,000 Capital A/cs: Fixed Assets 3,00,000 X’s Capital 1,00,000 Advertisement Suspense A/c 16,000 Y’s Capital 60,000 Profit and Loss A/c 4,000 Z’s Capital 50,000 2,10,000 6,30,000 6,30,000

On 1st April 2019, Y decided to retire from the firm on the following terms:

1. Stock to be reduced by 12,000.
3. Provision for Doubtful Debts to be increased to 6,000.
4. Fixed Assets be appreciated by 10%.
5. Goodwill of the firm, valued at 80,000, and the amount due to the retiring partners be adjusted in X’s and Z’s Capital Accounts.

Prepare Revaluation Account, Partners’ Capital Accounts, and the Balance Sheet to give effect to the above.

## The solution of Question 39 Chapter 6 of +2-A: –

 Revaluation Account Particular Amount Particular Amount To Stock A/c 12000 By Fixed Assets A/c 30,000 To Prov. for Doubtful Debts 2000 (3,00,000 × 10%) (6,000 – 4,000) To Profit transferred to X’s Capital A/c 6000 Y’s Capital A/c 6000 Z’s Capital A/c 4000 16000 30000 30000

 Partners’ Capital Account Part. X Y Z Part. X Y Z To Profit and Loss A/c 1500 1500 1000 By Balance B/d 1,00,000 60,000 50,000 To Advertise Suspense A/c 6000 6000 4000 By General Reserve A/c 30,000 30,000 20000 To Y’s Capital A/c 18000 – 12000 By Revaluation A/c 6000 6000 4000 To Y’s Loan A/c 1,58,500 By X’s Capital A/c – 18000 – To Balance c/d 1,10,500 – 57,000 By Z’s Capital A/c – 12000 – 1,36,000 1,26,000 74,000 1,36,000 1,26,000 74,000

Note: – General Reserve A/c, Profit and Loss A/c, and Advertise Suspense A/c all are distributed in the old ratio.

 Balance Sheet Liabilities Amount Assets Amount Sundry Creditors 2,50,000 Cash at Bank 50000 X’s Loan 50,000 Bills Receivable 60000 Y’s Loan 1,58,500 Debtors 80,000 Less: Prov. For D/D 6,000 74,000 Stock 1,12,000 Capital A/cs (1,24,000 – 12,000) X’s Capital 1,10,500 Fixed Assets 3,30,000 Z’s Capital 57,000 1,67,500 (3,00,000 + 30,000) 6,26,000 6,26,000

 Y’s Loan Account Liabilities Amount Assets Amount By Balance b/d 40000 Y’s Capital A/c 1,18,500 To Balance c/d 1,58,500 1,58,500 1,58,500

#### Calculation of Gaining Ratio

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

Gaining Ratio of X and Z = 3:2 (Given)

Goodwill of the firm = Rs 80,000

 Y’s Share of Goodwill = Firm’s Goodwill X B’s share = 80,000 X 3 8 = Rs 30,000

 X’s Share of Goodwill = Y’s Goodwill X Gaining share of X = 30,000 X 3 5 = Rs 18,000

 Z’s Share of Goodwill = Y’s Goodwill X Gaining share of Z = 30,000 X 2 5 = Rs 12,000

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