Question 40 Chapter 6 of +2- Part

Question 40 Chapter 6 of +2-Part-1

40. (Capital to be adjusted in New Profit Sharing Ratio) The Balance Sheet of X ,Y & Z who shared profits in the ratio of 4:3:1 as on 31st March, 2016 was as follows:

Liabilities Rs. Assets Rs. 
Sundry Creditors 7,700Cash AT BANK6,300
General reserve 1,800Debtors                 6,000 
Capital X19,000Less provision      3005,700
14,000Stock 7,000
12,000Plant & machinery10,500
 54,500 54,500

B retired on the following terms:
(i)Building appreciated by Rs.7,000.
(ii) Provision for bad debts is to made 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 balance due to him be treated as loan carrying interest @ 6% per annum.
Pass journal entries to record above mentioned transactions and show the Balance Sheet of the firm as it would appear immediately after B’s retirement .

The solution of Question 40 Chapter 6 of +2 Part-1: –

Revaluation Account
To Sock A/c 350By Building A/c 1,250
To Provision for L/c 320   
To profits transferred 2,000   
  1,250  1,250
Partners’ Capital Account 
To Y’s capital A/c2,917 1,750By Balance b/d19,00014,00012,000
To Bank A/c 500 By Goodwill A/c 2,917 
To Bank A/c  279By Revaluation A/c258193129
To Y’s loan A/c 14,460 By General Reserve A/c800600400
    By Bank A/c359  
To Balance c/d 17,50010,500    
 20,41719,46012,529 20,41719,46012,529
Balance Sheet
Z’s Laon 14,460Cash in Bank 1,380
Creditor 7,700Stock 6,650
Provision for L/c 320Debtors6,000 
Capital X 17,500Less Provision30011,000
Y 10,500Plant & Machinery 10,500
   Building 26,250
  50,480  50,480
Balance Sheet
To balance b/d 6,300By Y’s Capital 5,000
To X’s Capital 359By Z’s Capital 279
   By balance c/d 1,380
  6,659  6,659

Comment if you have any questions.
Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 40 Chapter 6 of +2 Part-1 - USHA Publication 12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

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