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Question 39 Chapter 6 of +2-Part- 1
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39 (Goodwill not appearing in Books/Payment to Retiring Partner made in Equal Installments) C , P and S were partners sharing profit in the ratio of 2/5, 2/10 and 3/10respectively. Their balance sheet on 31st December 2018 was as follows :
| Liabilities | Rs. | Assets | Rs. | |
| Capitals | Buildings | 18,000 | ||
| C | 16,000 | Plant | 14,000 | |
| P | 12,000 | Motor Car | 4,000 | |
| S | 10,000 | Stock | 10,000 | |
| RESERVE | 5,000 | Debtors | 7,000 | |
| Bills payable | 2,000 | Less : Provision for D/D | 1,000 | 6,000 |
| Creditors | 8,000 | Cash at bank | 1,000 | |
| 1,06,000 | 1,06,000 |
P retires on that date on the following terms :
- The goodwill of the firm is to be valued at Rs. 7,000.
- Stock and buildings are to be appreciated by 10%.
- Plant and motor car are to be depreciated by 10%.
- Liability for the payment of gratuity to workers Rs. 2,000 not yet recorded in the books, but the same is to be provided for.
- Provision for bad debts is no more necessary.
- It is decided not to maintain goodwill account in the books.
- The amount payable to P is to be paid in three equal installments beginning from 1st January ; 2019 with interest at 10% p.a.
You are required to prepare :
(a) Revaluation account (b) Partner’s capital account (c) New balance sheet of C & S (d) P’s loan account
The solution of Question 39 Chapter 6 of +2 Part-1: –
| Revaluation Account | |||||
| Particulars | Amount | Particulars | Amount | ||
| To pant A/c | 1,400 | By stock | 1,000 | ||
| To motor A/c | 400 | By land & building A/c | 1,800 | ||
| To provision for gratuity A/c | 2,000 | By Provision for D/debts | 1,000 | ||
| 3,800 | 3,800 | ||||
| Partners’ Capital Account | |||||||
| Particulars | C | P | S | Particulars | C | P | S |
| To P’s capital A/c | 1,200 | 9800 | By Balance b/d | 16,000 | 12,000 | 10,000 | |
| To P’s loan A/c | 15,600 | By Revaluation A/c | 2,000 | 1,500 | 1,500 | ||
| By A’s capital A/c | 1,200 | ||||||
| By C’s capital A/c | 900 | ||||||
| To Balance c/d | 16,800 | – | 10,600 | ||||
| 18,000 | 15,600 | 11,500 | 18,000 | 15,600 | 11,500 | ||
| Balance Sheet | |||||
| Liabilities | Amount | Assets | Amount | ||
| Creditors | 8,000 | BUILDING | 19,800 | ||
| Bills payable | 2,000 | Plant | 12,600 | ||
| P’s loan A/c | 2,000 | Motor car | 3,600 | ||
| Provision for gratuity | 15,600 | Stock | 11,000 | ||
| Capital A/c | Debtors | 7,000 | |||
| X | 16,800 | Bank | 1,000 | ||
| Z | 10,600 | 27,400 | |||
| 55,000 | 55,000 | ||||
| Dr. | P’s loan A/c | Cr. | |||||
| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |
| 1 Year | 1 Year | ||||||
| Jan 1 | To cash A/c | 5,200 | Jan 1 | By Sale Return A/c | 15,600 | ||
| Dec. 31 | To balance c/d | 11,440 | Dec. 31 | By Output CGST A/c | 1,040 | ||
| 53,400 | 53,400 | ||||||
| 2 Year | 2 Year | ||||||
| Jan 1 | To cash A/c | 6,240 | Jan 1 | By P’s capital A/c | 11,440 | ||
| Dec. 31 | To balance c/d | 5,724 | Dec. 31 | By interest | 524 | ||
| 11,964 | 11,964 | ||||||
| 3 Year | 3 Year | ||||||
| Jan 1 | To cash A/c | 5,724 | Jan 1 | By Balance b/d | 5,724 | ||
| 5,724 | 5,724 | ||||||
TREATMENT OF GOODWILL :
| Particulars | Amount | |
| Value of the goodwill of the firm | 7,000 | |
| P retires his share (3/10) | 2,100 | |
| Gaining ratio of C & S is 4:3 | ||
| Hence C is debited | 1,200 | |
| Hence S is debited | 900 | |
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End of Solution
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The solution to all questions of Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner) Class 12 Usha Publication – 2024 is shown as follows, click on the image of the question to get the solution.
Question 61 Chapter 6 of +2 Part- 1 – USHA Publication
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Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum
Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
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Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)
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)
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Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 1 Class 12 by Unimax Publication
- Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
- Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
- Chapter No. 3 – Partnership Accounts – II (Goodwill)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
- 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)
Check out Part 2 of both books.
In Class 12th the accountancy has 2 books i.e. Part 1 and Part 2. The Books related to the Part 1 are shown above. but If you want to know more about Part 2, you can check it out from the following links. We have provided the links to both books i.e. Accountancy Part 2 by Usha Publication and Advanced Accountancy Part 2 by Unimax Publication.
1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
2. Advanced Accountancy Part 2 Class 12 by Unimax Publication