Question 39 Chapter 6 of +2-Part- 1
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 | |
Comment if you have any questions.
End of Solution
Check Out the Solution of all questions of this chapter:
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 33 Chapter 6 of +2 Part- 1 – USHA Publication
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Question 44 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.
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)
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.
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1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
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2. Advanced Accountancy Part 2 Class 12 by Unimax Publication