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Question 42 Chapter 6 of +2-Part-1
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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 | – | 48,875 | ||||
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 | = | 650+41400+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 | ||
B’s capital being 3/8 of 1,25,000 = Rs. 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 loss 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 |
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Comment if you have any questions.
Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- 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)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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Hlo pls tell me capital kaise aye partners capital account mein goodwill ka kya kiya
Please check out the working note. we have already shown the calculation of the closing balance of capital.
For goodwill there is a journal entry