Question 26:
Sangeeta, Saroj and shanti
are partners sharing profits and losses in the ratio of 5 : 3 : 2. Z
retired and on the date of his retirement, following adjustments were agreed
upon:
(a) The value of Furniture is to be increased by ` 12,000.
(b) The value of stock to be decreased by ` 10,000.
(c) Machinery of the book value of ` 50,000 is
to be depreciated by 10%.
(d) A Provision for Doubtful Debts @ 5% is to be created on debtors of book
value of ` 40,000.
(e) Unrecorded Investment worth ` 10,000.
(f) An item of ` 1,000 included in bills payable is
not likely to be claimed, hence should be written back.
Pass necessary Journal entries.
Answer:
|
Revaluation
Account |
||||||
|
Dr. |
|
Cr. |
||||
|
Particulars |
` |
Particulars |
` |
|||
|
Stock A/c |
10,000 |
Furniture A/c |
12,000 |
|||
|
Machinery A/c |
5,000 |
Investments A/c |
10,000 |
|||
|
Provision for Doubtful Debts A/c |
2,000 |
Bills Payable A/c |
1,000 |
|||
|
Profit transferred to: |
|
|
|
|||
|
X’s Capital A/c |
3,000 |
|
|
|
||
|
Y’s Capital A/c |
1,800 |
|
|
|
||
|
Z’s Capital A/c |
1,200 |
6,000 |
|
|
||
|
|
23,000 |
|
23,000 |
|||
|
|
|
|
|
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|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit |
Credit |
|
|
(a) |
Furniture A/c |
Dr. |
|
12,000 |
|
|
|
To
Revaluation A/c |
|
|
|
12,000 |
|
|
(Being Increase in value transferred to Revaluation
Account) |
|
|
|
|
|
|
|
|
|
|
|
|
(b) |
Revaluation A/c |
Dr. |
|
10,000 |
|
|
|
To Stock
A/c |
|
|
|
10,000 |
|
|
(Being Decrease in Stock transferred to Revaluation
Account) |
|
|
|
|
|
|
|
|
|
|
|
|
(c) |
Revaluation A/c |
Dr. |
|
5,000 |
|
|
|
To
Machinery A/c |
|
|
|
5,000 |
|
|
(Being Decrease in value of machinery transferred to Revaluation
Account) |
|
|
|
|
|
|
|
|
|
|
|
|
(d) |
Revaluation A/c |
Dr. |
|
2,000 |
|
|
|
To Provision for Doubtful
Debts A/c |
|
|
|
2,000 |
|
|
(Being Increase in liabilities to Revaluation Account) |
|
|
|
|
|
|
|
|
|
|
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|
(e) |
Investments A/c |
Dr. |
|
10,000 |
|
|
|
To Revaluation A/c |
|
|
|
10,000 |
|
|
(Being Increase in value transferred to Revaluation
Account) |
|
|
|
|
|
|
|
|
|
|
|
|
(f) |
Bills Payable A/c |
Dr. |
|
1,000 |
|
|
|
To Revaluation A/c |
|
|
|
1,000 |
|
|
(Being Decrease in liabilities transferred to Revaluation
Account) |
|
|
|
|
|
|
|
|
|
|
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|
(g) |
Revaluation A/c |
Dr. |
|
6,000 |
|
|
|
To X’s Capital A/c |
|
|
|
3,000 |
|
|
To Y’s Capital A/c |
|
|
|
1,800 |
|
|
To Z’s Capital A/c |
|
|
|
1,200 |
|
|
(Being Revaluation profit transferred to Partners’ Capital
Accounts) |
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Question 27:
A, B and C were partners, sharing profits
and losses in the ratio of 2 : 2 : 1. B decides to retire on 31st
March, 2023. On the date of his retirement, some of the assets and liabilities
appeared in the books as follows:
Creditors ` 70,000;
Building ` 1,00,000;
Plant and Machinery ` 40,000;
Stock of Raw Materials ` 20,000; Stock of Finished Goods ` 30,000 and Debtors ` 20,000.
Following was agreed among the partners on B's retirement:
(a) Building to be appreciated by 20%.
(b) Plant and Machinery to be reduced by 10%.
(c) A Provision of 5% on Debtors to be created for Doubtful Debts.
(d) Stock of Raw Materials to be valued at
` 18,000 and Finished Goods at ` 35,000.
(e) An Old Computer previously written off was sold for ` 2,000 as scrap.
(f) Firm had to pay ` 5,000 to an
injured employee.
Pass necessary Journal entries to record the above adjustments and prepare the
Revaluation Account.
Answer:
|
Revaluation
Account |
||||||
|
Dr. |
|
Cr. |
||||
|
Particulars |
(`) |
Particulars |
(`) |
|||
|
Plant and Machinery (40,000 × 10%) |
4,000 |
Building (1,00,000 × 20%) |
20,000 |
|||
|
Provision for Doubtful Debts |
1,000 |
Stock of Finished Goods |
5,000 |
|||
|
Stock of Raw Materials |
2,000 |
Computer |
2,000 |
|||
|
Workmen’s Compensation Claim |
5,000 |
|
|
|||
|
Profit transferred to: |
|
|
|
|||
|
A’s Capital A/c |
6,000 |
|
|
|
||
|
B’s Capital A/c |
6,000 |
|
|
|
||
|
C’s Capital A/c |
3,000 |
15,000 |
|
|
||
|
|
27,000 |
|
27,000 |
|||
|
|
|
|
|
|||
|
Journal |
||||
|
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
Building A/c |
Dr. |
|
20,000 |
|
|
Stock of Finished Good A/c |
Dr. |
|
5,000 |
|
|
Computer A/c |
Dr. |
|
2,000 |
|
|
To Revaluation A/c |
|
|
27,000 |
|
|
(Being Increase in value Assets transferred to Revaluation
Account) |
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
12,000 |
|
|
To Plant and Machinery A/c |
|
|
4,000 |
|
|
To Provision for Doubtful Debts A/c |
|
|
1,000 |
|
|
To Stock of Raw Material A/c |
|
|
2,000 |
|
|
To Workmen’s Compensation Claim A/c |
|
|
5,000 |
|
|
((Being Decrease in value of Assets and increase in
Liabilities transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
15,000 |
|
|
To A’s Capital A/c |
|
|
6,000 |
|
|
To B’s Capital A/c |
|
|
6,000 |
|
|
To C’s Capital A/c |
|
|
3,000 |
|
|
((Being Revalution Profit transferred to Partners’ Capital
accounts) |
|
|
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Question 28: Punit, Ramit and Akshit
were partners sharing profits equally. Akshit retired on 1st April, 2023. Punit
and Ramit decided to continue the business and share profits in the ratio of 3:
2. They also decided to give effect to the change in values of assets and
liabilities without changing their book values.
The
book values and their revised values were as follows:
|
|
Book Values (`) |
Revised Values (`) |
|
Land
|
5,50,000 |
8,50,000 |
|
Building
|
2,50,000 |
2,10,000 |
|
Computers
|
1,00,000 |
70,000 |
|
Computer
Softwares |
5,00,000 |
4,00,000 |
|
Sundry
Creditors |
70,000 |
60,000 |
|
Workmen
Compensation Claim |
-
|
5,000 |
Pass
an adjustment entry.
Answer:
|
|
Punit |
|
Ramit |
|
Akshit |
|
Old
Ratio |
1 |
: |
1 |
: |
1 |
|
New
Ratio |
3 |
: |
2 |
: |
Retired |
Punit
= 1/3-3/5=5-9/15= -4/15 (Gain)
Ramit
= 1/3-2/5=5-6/15= -1/15 (Gain)
Akshat
= 1/3-0/5=5-0/15= 5/15 =1/3 (Sacrifice)
SHARE
OF SACRIFICE FOR AKSHAT, RETIRING PARNTER
Sacrificing
ratio of Akshat is 1/3
Compensating
amount =1,35,,000×1/3=45,000
Share
of Compensating amount by Punit and Ramit in sacrificing ratio (4:1)
Punit=
45,000×4/5=36,000
Ramit=
45,000×1/5=9,000
An
adjustment entry
|
Particulars
|
Dr.
` |
Cr.
` |
|
Punit’s
Capital A/c Dr. Ronit’s
Capital A/c Dr. To Akshat’s Capital A/c |
36,000 9,000 |
45,000 |
Question 29:
X, Y and Z are partners in a firm
sharing profits and losses in the ratio of 3 : 2 : 1. Z retires from
the firm on 31st March, 2023. On the date of Z's retirement, the
following balances appeared in the books of the firm:
General Reserve ` 1,80,000
Profit and Loss Account (Dr.)
` 30,000
Workmen Compensation Reserve
` 24,000 which was no more required
Employees' Provident Fund ` 20,000.
Pass necessary Journal entries for the adjustment of these items on Z's
retirement.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
2023 |
General Reserve A/c |
|
|
|
|
|
|
Workmen Compensation Reserve A/c |
Dr. |
|
24,000 |
|
|
|
To X’s Capital A/c |
|
|
|
1,02,000 |
|
|
To Y’s Capital A/c |
|
|
|
68,000 |
|
|
To Z’s Capital A/c |
|
|
|
34,000 |
|
|
((Being Accumulated profits distributed among partners in
old ratio) |
|
|
|
|
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
15,000 |
|
|
|
Y’s Capital A/c |
Dr. |
|
10,000 |
|
|
|
Z’s Capital A/c |
Dr. |
|
5,000 |
|
|
|
To Profit and Loss A/c |
|
|
|
30,000 |
|
|
((Being Debit balance in Profit and Loss A/c distributed
among partners in old ratio) |
|
|
|
|
|
|
|
|
|
|
|
Working Notes:
WN1: Calculation
of Share in Credit Balance of Reserves
|
Total
Credit Balance of Reserves |
= General Reserve + WCF = 1,80,000 + 24,000 = 2,04,000 |
X‘s
share= 2,04,000××3/6 =1,02,000
Y‘s
share= 2,04,000××2/6 =68,000
Z‘s
share= 2,04,000××1/6 =34,000
WN2: Calculation
of Share in Debit Balance of Profit and Loss A/c
X‘s
share= 30,000××3/6 =15,000
Y‘s
share= 30,000××2/6 =10,000
Z‘s
share= 30,000××1/6 =5,000
Note: Employees’ Provident Fund will
not be distributed as it is a liability and not accumulated profit.
Question 30:
Asha,
Naveen and Shalini were partners in a firm sharing profits in the ratio of 5 :
3 : 2. Goodwill appeared in their books at a value of ` 80,000 and General Reserve at ` 40,000. Naveen decided to retire from the firm. On
the date of his retirement, goodwill of the firm was valued at ` 1,20,000. The new profit-sharing ratio decided among
Asha and Shalini is 2 : 3.
Record necessary Journal entries on Naveen's retirement.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit |
Credit (`) |
|
|
|
Asha’s Capital A/c |
Dr. |
|
40,000 |
|
|
|
Naveen’s Capital
A/c |
Dr. |
|
24,000 |
|
|
|
Shalini’s Capital
A/c |
Dr. |
|
16,000 |
|
|
|
To Goodwill A/c |
|
|
|
80,000 |
|
|
(Being Existing
goodwill written off amongst existing partners in old ratio) |
|
|
|
|
|
|
|
|
|
|
|
|
|
General Reserves
A/c |
Dr. |
|
40,000 |
|
|
|
To Asha’s Capital A/c |
|
|
|
20,000 |
|
|
To Naveen’s Capital A/c |
|
|
|
12,000 |
|
|
To Shalini’s Capital A/c |
|
|
|
8,000 |
|
|
(Being General
Reserves distributed among all
partners in old ratio) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shalini’s Capital
A/c |
Dr. |
|
48,000 |
|
|
|
To Asha’s Capital A/c |
|
|
|
12,000 |
|
|
To Naveen’s Capital A/c |
|
|
|
36,000 |
|
|
(Being Goodwill
adjusted by debiting gaining partner and crediting sacrificing partner and
retiring partner) |
|
|
|
|
|
|
|
|
|
|
|
Calculation of Gaining Ratio:
Gain of a Partner=New Share - Old Shares
Asha's Gain (Sacrifice): 2/5-5/10=4-5/10=(-)1/10
Shalini's Gain (Sacrifice): 3/5-2/10=6-2/10=4/10
Therefore, Both Asha and Naveen would be compensated by Shalini in the ratio of 1:3
Asha's Sacrifice for 1/10th Share=1,20,000×1/10=12,000
Naveen's Sacrifice for 3/10th Share= 1,20,000×3/10=36,000
Ts Grewal Solution 2023-2024
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Class 12 / Volume – I