Question 42 Chapter 6 of +2-Part- 1
42 (Adjustment of Capital/Capital of New Firm not given/GST) A, B and C carried a Partnership Sharing Profit as 4 : 3 :2 .Their balance sheet on 31.3.2013 was follows :
| Liabilities | Rs. | Assets | Rs. |
| Creditors | 40,000 | Cash in hand | 500 |
| Output IGST | 400 | Cash at bank | 21,000 |
| Output CGST | 500 | Debtors 25,000 | |
| Output SGST | 500 | Less : provision 500 | 24,500 |
| Capital A/c | Stock | 36,000 | |
| A | 87,800 | Plant & machinery | 37,000 |
| B | 66,000 | Land & building | 1,20,000 |
| C | 43,800 | ||
| 2,39,000 | 2,39,000 |
B retired on the same date and the adjustments were agreed upon before ascertaining the amount payable to:
- Reserve for doubtful debts raised to 5 % on detors
- Land and building to be appreciated by 15%.
- A provision of Rs. 650 is to be made outstanding legal changes.
- Goodwill to be valued at Rs. 45,000 and B’s share to be adjusted into the accounts of A and C who decided to a
continue the sharing profits 5:3. - Stack to be reduced top Rs. 32,000.
- The Capital of the new firm to be adjusted in proportion to their new profit sharing ratio and actual cash to be brought in a paid by or to the timing partners as the case may be
B agreed to leave the amount due to him by the firm as a loan to the firm carrying interest @ 6% p.a.
You are required to prepare a revaluation account, partners, capital account, and revised Balance sheet after B’s retirement
The solution of Question 42 Chapter 6 of +2 Part-1: –
| Journal |
|||||
| Date | Particulars |
L.F. | Debit | Credit | |
| Revaluation A/c | Dr. | 5,400 | |||
| To provision for doubtful debts A/c | 750 | ||||
| To Outstanding legal charges A/c | 650 | ||||
| To Stock A/c | 4,000 | ||||
| (Being assets & liabilities revalued . ) | |||||
| Land & Building A/c | Dr. | 18,000 | |||
| To Revaluation A/c | 18,000 | ||||
| (Being land & Building appreciated . ) | |||||
| Revaluation A/c | Dr. | 12,600 | |||
| To A’s capital A/c | 5,600 | ||||
| To B’s capital A/c | 4,200 | ||||
| To C’s capital A/c | 2,800 | ||||
| (Being revaluation on profit ) | |||||
| A’s capital A/c | Dr. | 8,125 | |||
| C’s capital A/c | Dr. | 6,875 | |||
| To B’s capital A/c | 15,000 | ||||
| (Being adjustment of goodwill ) | |||||
| B’s capital A/c | Dr. | 85,200 | |||
| To B’s loan A/c | 85,200 | ||||
| (Being part payment to B) | |||||
| A’s capital A/c | Dr. | 7,150 | |||
| To bank A/c | 7,150 | ||||
| (Being capital refunded ) | |||||
| B’s capital A/c | Dr. | 7,150 | |||
| To B’s loan A/c | 7,150 | ||||
| (Being capital brought into make proportionate ) | |||||
| Revaluation Account |
|||||
| Particulars |
Amount | Particulars | Amount | ||
| To provision d/d | 750 | By land & Building A/c | 18,000 | ||
| To outstanding claim | 650 | ||||
| To stock | 4,000 | ||||
| To profits transferred | |||||
| A | 5,600 | ||||
| B | 4,200 | ||||
| C | 2,800 | 12,600 | |||
| 18,000 | 18,000 | ||||
| Partners’ Capital Account | |||||||
| Particulars | A | B | C | Particulars | A | B | C |
| To B’s capital A/c | 8,125 | 6,875 | By Balance b/d | 87,800 | 66,000 | 43,800 | |
| To Bank A/c | 7,150 | By Revaluation A/c | 5,600 | 4,200 | 2,800 | ||
| To B’s loan A/c | 85,200 | By A’s capital A/c | 8,125 | ||||
| By C’s capital A/c | 6,875 | ||||||
| By Bank A/c | 7,150 | ||||||
| To Balance c/d | 78,125 | – | 46,875 | ||||
| 93,400 | 85,200 | 53,750 | 93,400 | 85,200 | 53,750 | ||
New capital of partners
| Total assets in the firm | = | 500+21000+23750+32000+37000+138000 |
| = | Rs 2,52,250 | |
| Less Total liabilities of the new firm | = | 40,000 + 650 + 85200 |
| = | Rs 1,27,250 | |
| Net assets | = | Rs. 2,52,250 – 1,27,250 |
| = | Rs 1,25,000 | |
|
A’s capital being 5/8 of 1,25,000 |
= | 78,125 |
|
C’s capital being 3/8 of 1,25,000 |
= | 46,875 |
| Balance Sheet |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Creditors | 40,000 | Cash in hand | 500 | ||
| Output IGST | 400 | Cash at bank | 21,000 | ||
| Output CGST | 500 | Debtors | 25,000 | ||
| Output SGST | 500 | Less Provision | 1,250 | 23,750 | |
| Outstanding legal charges | 650 | Stock | 32,000 | ||
| B’s loan A/c | 85,200 | Plant & machinery | 37,000 | ||
| Capital A/c | Land & Building | 1,38,000 | |||
| A | 78,125 | ||||
| C | 46,875 | ||||
| 2,52,250 | 2,52,250 | ||||
Comment if you have any questions.
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 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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