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Question 43 Chapter 6 of +2-Part- 1
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43. (Capital of New Firm given) The Balance sheet of X, Y, and Z who were sharing their profits in proportion to their capital stood as follows on 31st March 2018
| Liabilities | Rs. | Assets | Rs. |
| SUNDRY Creditors | 7,000 | Cash at Bank | 15,600 |
| CAPITAL A/c | Sundry Debtors 5,000 | ||
| X | 25,000 | Less : Provision 100 | 4,900 |
| Y | 20,000 | Stock | 10,000 |
| Z | 15,000 | Land & Building | 11,500 |
| Plant & Machinery | 25,000 | ||
| 67,000 | 67,000 |
Y retires and the following adjustments of the assets and liabilities have been agreed upon before the ascertainment of the amount payable by the firm to Y:
1 That the stock be depreciated by 5%.
2 That a provision for doubtful debts be increased to 5% on debtors
3. That the land and buildings be appreciated by 20%
4. That a provision of Rs. 750 be made in respect of outstanding legal charges.
5 That goodwill of the entire firm be fixed at Rs 16,200 and Y’s share of the same be adjusted into the accounts of X and Z (no goodwill account is to be raised)
6 That X and Z decide to share the future profits of the firm in equal proportions.
7 That the entire capital of the new firm is fixed at Rs. 48,000 between X and Z in equal proportions. For this purpose, actual cash is to be brought in or paid off.
You are required to prepare the revaluation account. Partner’s capital accounts, bank account, and the revised balance sheet after Y’s retirement. Also indicate the gaining ratio
The solution of Question 43 Chapter 6 of +2 Part-1: –
| Revaluation Account |
|||||
| Particulars |
Amount | Particulars | Amount | ||
| To provision doubtful debts | 150 | By land & Building A/c | 5,000 | ||
| To stock | 500 | ||||
| To outstanding legal charges | 750 | ||||
| To profits transferred | |||||
| X | 1,500 | ||||
| Y | 1,200 | ||||
| Z | 900 | 3,600 | |||
| 5,000 | 5,000 | ||||
| Partners’ Capital Account | |||||||
| Particulars | X | Y | Z | Particulars | X | Y | Z |
| To Y’s capital A/c | 1,350 | 4,050 | By Balance b/d | 25000 | 20,000 | 15,000 | |
| To Bank A/c | 26,600 | By Revaluation A/c | 1,500 | 1,200 | 900 | ||
| To Bank A/c | 1,150 | 85,200 | By X’s capital A/c | 1,350 | |||
| By Z’s capital A/c | 4,050 | ||||||
| By Bank A/c | 12,150 | ||||||
| To Balance c/d | 24,000 | – | 24,000 | ||||
| 26,500 | 26,600 | 28,050 | 26,500 | 26,600 | 28,050 | ||
| Balance Sheet |
|||||
| Liabilities |
Amount | Assets | Amount | ||
| Sundry Creditors | 7,000 | land & Building | 30,000 | ||
| Outstanding legal charges | 750 | Sundry Debtors | 5,000 | ||
| X’s Capital A/c | 24,000 | Less provision | 250 | 4,750 | |
| Y’s Capital A/c | 24,000 | 48,000 | Stock | 9,500 | |
| Plant & machinery | 11,500 | ||||
| 55,750 | 55,750 | ||||
Gaining ratio = New share – Old share
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| X’s gain | = | 1 | – | 5 |
| 2 | 12 | |||
| = | 1 | |||
| 12 |
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| Z’s gain | = | 1 | – | 3 |
| 2 | 12 | |||
| = | 3 | |||
| 12 |
Gaining ratio = 1 : 3
Calculation of Y’s Share of Goodwill:
Firm Goodwill = ₹ 16,200
| = | 16,200 | x | 4 | |
| 12 | ||||
| = | Rs 5,400 |
Calculation of Amount of Y’s Share of goodwill adjusted with X and Z’s in Gaining Ratio:
| X to pay | = | 5,400 | x | 1 |
| 4 | ||||
| = | Rs 1,350 |
| Z to pay | = | 5,400 | x | 3 |
| 4 | ||||
| = | Rs 4,050 |
Calculation of new share of capital of continuing Partner X and Z:-
| X’s New Capital | = | ₹ 48,000 | x | 1 |
| 2 | ||||
| = | ₹ 24,000 |
| Z’s New Capital | = | ₹ 48,000 | x | 1 |
| 2 | ||||
| = | ₹ 24,000 |
Comment if you have any questions.
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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.
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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