Question 43 Chapter 6 of +2- Part

Question 43 Chapter 6 of +2-Part-1

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 7,000Cash at Bank  15,600
CAPITAL A/c Sundry Debtors     5,000   
X25,000Less :  Provision     1004,900
20,000Stock  10,000
Z15,000Land & 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
AmountParticularsAmount
To provision doubtful debts 150By land & Building A/c 5,000
To stock 500   
To outstanding legal charges 750   
To profits transferred     
X1,500    
Y1,200    
Z9003,600   
  5,000  5,000
Partners’ Capital Account 
ParticularsABCParticularsABC
To Y’s capital A/c1,350 4,050By Balance b/d2500020,00015,000
To Bank A/c 26,600 By Revaluation A/c1,5001,2006,900
To Bank A/c1,15085,200 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 24,00024,000    
 26,50026,60028,050 26,50026,60028,050
Balance Sheet
Liabilities
AmountAssetsAmount
Sundry Creditors 7,000 land & Building 30,000
Outstanding legal charges 750Sundry Debtors5,000 
X’s Capital A/c24,000 Less provision2504,750
Y’s Capital A/c24,00048,000Stock 9,500
   Plant & machinery 11,500
      
      
      
      
  55,750  55,750

Gaining ratio

X’s gain=15
212
     
 =1  
 12  
Y’s gain=130
212
     
 =3  
 12  

Gaining ratio = 1 : 3

Goodwill

Y’s share in goodwill=16,200x4
12
     
 =Rs 5,400  
X to pay=5,400x1
4
     
 =Rs 1,350  
Z to pay=5,400x2
4
     
 =Rs 4,050  

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 43 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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