Advertisement
Question 39 Chapter 6 of +2-A
Advertisement
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 |
Advertisement-Y
On 1st April 2019, Y decided to retire from the firm on the following terms:
- Stock to be reduced by 12,000.
- Advertisement Suspense Account to be written off.
- Provision for Doubtful Debts to be increased to 6,000.
- Fixed Assets be appreciated by 10%.
- 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.
Advertisement-X
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 |
Advertisement-X
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 |
Advertisement-Y
Working Note:-
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)
Adjustment of Goodwill
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 |
Advertisement-X
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. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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

Leave a Reply