Question 48 Chapter 6 – Unimax Class 12 Part 1 – 2021
Table of Contents
48. P, Q and R were partners sharing profits in the ratio of 3:1:1. The balance sheet of the firm is given below as at 31st March 2021:
| Liabilities | Amount | Assets | Amount | |
| Capital | Land | 2,80,000 | ||
| P | 6,03,000 | Building | 3,40,000 | |
| Q | 4,12,000 | Plant and machinery | 2,48,000 | |
| R | 2,01,900 | 1218000 | Furniture and fittings | 48,000 |
| Gen.reserve | 10000 | Stock | 1,09,000 | |
| S. Creditors | 62000 | Sundry Debtors | 1,32,000 | |
| Cash in bank | 1,33,000 | |||
| 12,90,000 | 12,90,000 |
Partnership deed provides for the settlement of claim on death of a partner, in addition to his capital, as under:
- The share of profit of deseased partner to be computed on the basis of average profits of past three years for the period from the last balance sheet to date of death of partner.
- His share of P/L on revaluation of assets and Liabilities.
- His share of Goodwill valued on two years purchase of average profits of last 3 years.
- Q died on 1st June 2021 and the following information is provided:
- Profits for last 3 years were: ₹80000, ₹130000, ₹150000.
- The assets were revalued as : Land ₹ 380000, Plant and machinery ₹180000.
- Q withdrew ₹ 10000 during the current financial year.
- ₹100000 were paid immediately on Q’s death to his executors and the balance amount was to be paid later.
Pass Journal entries to give effect to the transactions relating to death of Q in the books of firm.
The solution of Question 48 Chapter 6 – Unimax Class 12 Part 1: –
Q’s capital Account
| Particulars | Amount | Assets | Amount |
| To Drawing a/c | 10,000 | By balance b/d | 4,12,000 |
| To cash a/c | 1,00,000 | By reserve a/c (10000×1/5) | 2,000 |
| To Q’s executor‘s loan a/c | 3,62,400 | By P/L susp. A/c (120000×2/12×1/5) | 4,000 |
| By profit on revaluation (100000-68000)×1/5 | 6,400 | ||
| By P’s capital a/c | 36,000 | ||
| By R’s capital a/c | 12,000 | ||
| 4,72,400 | 4,72,400 |
Working Note:
Q’s share of Goodwill = 80000/3+130000/3+150000/3 × 2 × 1/5 = ₹ 48000.
Journal entries:
| Particulars | L.F. | Debit | Credit | |
| Res.fund a/c | Dr. | 10,000 | ||
| To P’s capital a/c | 6,000 | |||
| To Q’s capital a/c | 2,000 | |||
| To R’s capital a/c | 2,000 | |||
| P/L susp. a/c | Dr. | 4,000 | ||
| To Q’s capital a/c | 4,000 | |||
| Land a/c | Dr. | 10,000 | ||
| To revaluation a/c | 10,000 | |||
| Revaluation a/c | Dr. | 68,000 | ||
| To plant and machinery a/c | 68,000 | |||
| Revaluation a/c | Dr. | 32,000 | ||
| To P’s capital a/c | 19,200 | |||
| To Q’s capital a/c | 6,400 | |||
| To R’s capital a/c | 6,400 | |||
| P’s capital a/c | Dr. | 36,000 | ||
| R’s capital a/c | Dr. | 12,000 | ||
| To Q’s capital a/c | 48,000 | |||
| Q’s capital a/c | Dr. | 1,10,000 | ||
| To drawings a/c | 10,000 | |||
| To cash a/c | 1,00,000 | |||
| Q’ capital a/c | Dr. | 3,62,400 | ||
| To Q’s executor‘s loan a/c | 3,62,400 |
Retirement of a Partner – Explained with Illustration
Advertisement-X
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication