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Question 81 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 81 Chapter 6 of +2-A
Question No.81 Chapter No.6 - T.S. Grewal +2 Book 2019-Solution

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Question 81 Chapter 6 of +2-A

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81. X, Y and Z were partners in a firm sharing profits and losses in the ratio of 3 : 2: 1. Z died on 30th June 2018. The Balance Sheet of the firm as at that 31st March 2018 is as follows:

Liabilities AmountAssetsAmount
X’s Capital A/c2,40,000 Machinery2,40,000
Y’s Capital A/c1,60,000 Furniture1,50,000
Z’s Capital A/c80,0004,80,000Investments40,000
X’s Current A/c 16,000Stock64,000
Y’s Current A/c 5,000Sundry Debtors50,000
Reserve 60,000Bills Receivable22,000
Bills Payable 34,000Cash at Bank37,000
Sundry Creditors 40,000Cash in Hand22,000
   Z’s Current A/c10,000
  6,35,000 6,35,000

 

The following decisions were taken by the remaining partners:
a A Provision for Doubtful Debts is to be raised at 5% on Debtors.
b While Machinery to be decreased by 10%, Furniture and Stock are to be appreciated by 5% and 10% respectively.
c Advertising Expenses 4,200 are to be carried forward to the next accounting year and, therefore, it is to be adjusted through the Revaluation Account.
d Goodwill of the firm is valued at 60,000.
e X and Y are to share profits and losses equally in future.
f Profit for the year ended 31st March 2018 was 8,16,000 and Z’s share of profit till the date of death is to be determined on the basis of profit for the year ended 31st March 2018.
g The Fixed Capital Method is to be converted into the Fluctuating Capital Method by transferring the Current Account balances to the respective Partners’ Capital Accounts. Prepare the Revaluation Account, Partners’ Capital Accounts and prepare C’s Executors’ Account to show that C’s Executors were paid in two half-yearly instalments plus interest of 10% p.a. on the unpaid balance.
The first instalment was paid on 31st December 2018.

 

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The solution of Question 81 Chapter 6 of +2-A: –

 

Revaluation Account
Particular
AmountParticularAmount
Machinery1,00,000Furniture7,500
Provision for Doubtful Debts2,500Stock6,400
  Prepaid Advertisement Expenses 4,200
   Loss transferred to  
   X’s Capital A/c4,200 
   Y’s Capital A/c2,800 
   Z’s Capital A/c1,4008,400
  26,500  26,500

 

Partners’ Capital Account
Part.XYZ

Part.

XYZ
To Current A/c10,000By Balance B/d2,40,0001,60,00080,000
To Revaluation A/c4,2002,8001,400By Current A/c16,0005,000
To Z’s Capital A/c10,000By Reserve30,00020,00010,000
To Z’s Capital A/c34,000By Y’s Capital A/c34,000
To Executors A/c1,22,600By Y’s Capital A/c

10,000
      
To Balance c/d 2,81,8001,38,200    
 2,86,0001,85,001,34,000 2,86,0001,85,001,34,000

 

T’s Executor’s Account
DateParticularAmountDateParticularAmount
2018     
Dec. 31To Bank A/c 61,300 + 6,13067,430Jun. 30By Z’s Capital A/c1,22,600
2019     
Mar. 31To Balance c/d62,832.5Dec. 31By Interest (1,22,600×10100×612 6,130
   Mar. 31By Interest (61,300×10100×312) 1,532.5
  1,30,262.5   1,30,262.5
2019      
Jun. 30To Bank 61,300 + 3,06528,750April 01By Balance b/d 62,832.5
2020      
Jan. 31To Cash A/c 25,000 + 2,50027,500Jun. 30By Interest (61,300×10100×312 1,532.5
       
       
  64,365   64,365

 

 

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Working Notes:

Calculation of Profit & Loss Suspense

Profit & loss Suspense=8,16,000X1X6
312
       
 =Rs 34,000    

 

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)

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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