Question 36:
A, B and C are partners sharing
profits and losses in the ratio of 4 : 3 : 3. Their
Balance Sheet as at 31st March, 2025 is:
|
Liabilities |
(₹) |
Assets |
(₹) |
||
|
Creditors |
7,000 |
Land and
Building |
36,000 |
||
|
Bills
Payable |
3,000 |
Plant
and Machinery |
28,000 |
||
|
Reserves |
20,000 |
Computer
Printer |
8,000 |
||
|
Capital
A/cs: |
|
Stock |
20,000 |
||
|
A |
32,000 |
|
Sundry
Debtors |
14,000 |
|
|
B |
24,000 |
|
Less: Provision for Doubtful Debts |
2,000 |
12,000 |
|
C |
20,000 |
76,000 |
Bank |
2,000 |
|
|
|
|
|
|
|
|
|
|
1,06,000 |
|
1,06,000 |
||
|
|
|
|
|
||
On 1st April, 2025, B retired from the firm on the following terms:
(a) Goodwill of the firm is to be valued at ₹ 14,000.
(b) Stock, Land and Building are to be appreciated by 10%.
(c) Plant and Machinery and Computer Printer are to be reduced by 10%.
(d) Sundry Debtors are considered to be good.
(e) There is a liability of ₹ 2,000 for the payment of outstanding
salary to the employees of the firm. This liability was not provided in the
Balance Sheet but the same is to be recorded now.
(f) Amount payable to B is to be transferred to his Loan Account.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet
of A and C after B's retirement.
Answer:
|
Revaluation Account |
|||||
|
Dr. |
|
Cr. |
|||
|
Particulars |
(₹) |
Particulars |
(₹) |
||
|
Plant
and Machinery |
2,800 |
Stock |
2,000 |
||
|
Electronic
Typewriter |
800 |
Land
and Building |
3,600 |
||
|
Outstanding
Salary |
2,000 |
Provision
for Doubtful Debts |
2,000 |
||
|
Profit
transferred to: |
|
|
|
||
|
A’s Capital A/c |
800 |
|
|
|
|
|
B’s Capital A/c |
600 |
|
|
|
|
|
C’s Capital A/c |
600 |
2,000 |
|
|
|
|
|
|
|
|
||
|
|
7,600 |
|
7,600 |
||
|
|
|
|
|
||
|
Partners’ Capital Accounts |
|||||||
|
Dr. |
|
Cr. |
|||||
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
B’s
Capital A/c |
2,400 |
|
1,800 |
Balance
b/d |
32,000 |
24,000 |
20,000 |
|
B’s
Loan A/c |
|
34,800 |
|
Reserves |
8,000 |
6,000 |
6,000 |
|
Balance
c/d |
38,400 |
|
24,800 |
Revaluation
A/c |
800 |
600 |
600 |
|
|
|
|
|
A’s
Capital A/c |
|
2,400 |
|
|
C’s
Capital A/c |
|
1,800 |
|
||||
|
|
40,800 |
34,800 |
26,600 |
|
40,800 |
34,800 |
26,600 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet |
|||
|
an on April 01, 2025 (after B’s Retirement) |
|||
|
Liabilities |
(₹) |
Assets |
(₹) |
|
Creditors |
7,000 |
Land
and Building (36,000
+ 3,600) |
39,600 |
|
Bills
Payable |
3,000 |
Plant
and Machinery (28,000
– 2,800) |
25,200 |
|
B’s
Loan |
34,800 |
Electronic
Typewriter 8000
– 800) |
7,200 |
|
Capital
A/c: |
|
Stock
(20,000 + 2,000) |
22,000 |
|
A |
38,400 |
Sundry
Debtors |
14,000 |
|
C |
24,800 |
Bank |
2000 |
|
Outstanding
Salary |
2,000 |
|
|
|
|
1,10,000 |
|
1,10,000 |
|
|
|
|
|
Working Note:
Adjustment of Goodwill
Old Ratio (A, B and C) = 4 : 3 : 3
B retires from the firm.
∴ Gaining Ratio = 4
: 3
Goodwill of the firm = ₹ 14,000
B’s Share of Goodwill = 14,000×3/10=42,000
This share
of goodwill is to be distributed between A and C in their gaining ratio
(i.e. 4 : 3).
A‘s share= 4,200×4/7=2,400
C‘s share=
4,200×3/7=1,800
Question 37:
X, Y and Z are partners sharing profits and
losses in the ratio of 3 : 2 : 1. Balance Sheet of the
firm as at 31st March, 2025 was as follows:
|
Liabilities |
(₹) |
Assets |
(₹) |
||
|
Creditors |
21,000 |
Cash at
Bank |
5,750 |
||
|
Workmen
Compensation Reserve |
12,000 |
Debtors |
40,000 |
|
|
|
Investments
Fluctuation Reserve |
6,000 |
Less: Provision for Doubtful Debts |
2,000 |
38,000 |
|
|
Capital
A/cs: |
|
Stock |
|
30,000 |
|
|
X |
68,000 |
|
Investment
(Market
Value ₹ 17,600) |
15,000 |
|
|
Y |
32,000 |
|
Patents |
10,000 |
|
|
Z |
21,000 |
1,21,000 |
Machinery |
50,000 |
|
|
|
|
Goodwill |
6,000 |
||
|
|
|
Advertisement
Expenditure |
5,250 |
||
|
|
|
|
|
|
|
|
|
1,60,000 |
|
1,60,000 |
||
|
|
|
|
|
||
Z retired on 1st April, 2025 on the following terms:
(a) Goodwill of the firm is to be valued at ₹ 34,800.
(b) Value of Patents is to be reduced by 20% and that of machinery to 90%.
(c) Provision for doubtful debts is to be created @ 6% on debtors.
(d) Z took over the investment at market value.
(e) Liability for Workmen Compensation to the extent of ₹ 750 is to
be created.
(f) A liability of ₹ 4,000 included in creditors is not to be paid.
(g) Amount due to Z to be paid as follows: ₹ 5,067 immediately,
50% of the balance within one year and the balance by a draft for 3 Months.
Give necessary Journal entries for the treatment of goodwill,
prepare Revaluation Account, Capital Accounts and the Balance Sheet of the new
firm.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
2025 |
|
|
|
|
|
|
April 01 |
X’s
Capital A/c |
Dr. |
|
3,000 |
|
|
|
Y’s
Capital A/c |
Dr. |
|
2,000 |
|
|
|
Z’s
Capital A/c |
Dr. |
|
1,000 |
|
|
|
To Goodwill A/c |
|
|
|
6,000 |
|
|
(Existing
goodwill written off) |
|
|
|
|
|
|
|
|
|
|
|
|
April 01 |
X’s
Capital A/c |
Dr. |
|
3,480 |
|
|
|
Y’s
Capital A/c |
Dr. |
|
2,320 |
|
|
|
To Z’s Capital A/c |
|
|
|
5,800 |
|
|
(Z’s
share of goodwill credited to him and gaining partners debited in gaining
ratio) |
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation Account |
||||||
|
Dr. |
|
Cr. |
||||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|||
|
Patents |
2,000 |
Investments
(17,600
– 15,000) |
2,600 |
|||
|
Machinery |
5,000 |
Creditors |
4,000 |
|||
|
Prov.
for Doubtful Debts |
400 |
Loss
on Revaluation transferred |
|
|||
|
|
|
X’s
Capital A/c |
400 |
|
||
|
|
|
Y’s
Capital A/c |
267 |
|
||
|
|
|
Z’s
Capital A/c |
133 |
800 |
||
|
|
|
|
|
|||
|
|
7,400 |
|
7,400 |
|||
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
Partners’ Capital Accounts |
|||||||||
|
Dr. |
|
Cr. |
|||||||
|
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
||
|
Goodwill
A/c |
3,000 |
2,000 |
1,000 |
Balance
b/d |
68,000 |
32,000 |
21,000 |
||
|
Revaluation
A/c |
400 |
267 |
133 |
X’s
Capital A/c |
- |
- |
3,480 |
||
|
Z’s
Capital A/c |
3,480 |
2,320 |
- |
Y’s
Capital A/c |
- |
- |
2,320 |
||
|
Advertisement
Expenditure A/c |
2,625 |
1,750 |
875 |
Workmen
Compensation Reserve A/c* |
5,625 |
3,750 |
1,875 |
||
|
Investments
A/c |
- |
- |
17,600 |
Investment
Fluctuation Reserve A/c* |
3,000 |
2,000 |
1,000 |
||
|
Bank
A/c |
- |
- |
5,067 |
|
|
|
|
||
|
Z’s
Loan A/c |
- |
- |
2,500 |
|
|
|
|
||
|
Bills
Payable A/c |
- |
- |
2,500 |
|
|
|
|
||
|
Balance
c/d |
67,120 |
31,413 |
- |
|
|
|
|
||
|
|
76,625 |
37,750 |
29,625 |
|
76,625 |
37,750 |
29,625 |
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2025 after Z’s retirement |
|||||
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Creditors |
17,000 |
Cash
at Bank (5,750 – 5,067) |
683 |
||
|
Workmen
Compensation Claim |
750 |
Stock |
30,000 |
||
|
Bills
Payable |
2,500 |
Patents |
8,000 |
||
|
Capital
A/c’s: |
|
|
Debtors
A/c |
40,000 |
|
|
X |
67,120 |
|
Less: Prov. for D/D |
2,400 |
37,600 |
|
Y |
31,413 |
98,533 |
Machinery |
45,000 |
|
|
Z’s
Loan |
2,500 |
|
|
||
|
|
1,21,283 |
|
1,21,283 |
||
|
|
|
||||
Working Note:
Amount due to Z = (21,000+3,480+2,320+1,875+1,000) - (1,000+133+875+17,600) =10,067
Amount paid on Retirement immediately: ₹ 5,067
Amount paid within one year: 50% of 5,000 = ₹ 2,500
Amount payable by Bills of
Exchange: ₹ 2,500 (balance 50%)
Question 38:
Ashok, Bhaskar
and Chaman were in partnership sharing
profits and losses equally. ‘Bhaskar'
retires from the firm. After adjustments, his Capital Account shows
a credit balance of ₹ 3,00,000 as on
1st April, 2020. Balance due to Bhaskar' is
to be paid in three equal annual instalments along
with interest @ 10% p.a. Prepare Bhaskar's
Loan Account until he is paid the amount due to him. The firm closes its books
on 31st March every year.
Answer:
|
Dr. |
Bhaskar’s Loan A/c |
Cr. |
|||||
|
Date |
Particulars |
(₹) |
Date |
Particulars |
(₹) |
||
|
2021 |
|
|
2020 |
|
|
||
|
March 31 |
To Bank
A/c (1,00,000
+ 30,000) |
1,30,000 |
April 01 |
By Bhaskar's Capital A/c |
3,00,000 |
||
|
March 31 |
To
balance c/d |
2,00,000 |
2021 |
|
|
||
|
|
|
|
March 31 |
By
Interest on Loan A/c |
30,000 |
||
|
|
|
|
|
(3,00,000
× 10/100) |
|
||
|
|
|
3,30,000 |
|
|
3,30,000 |
||
|
2022 |
|
|
2021 |
|
|
||
|
March 31 |
To Bank
A/c (1,00,000 + 20,000) |
1,20,000 |
April 01 |
By
balance b/d |
2,00,000 |
||
|
March 31 |
To
balance c/d |
1,00,000 |
2022 |
|
|
||
|
|
|
|
March 31 |
By
Interest on Loan A/c |
20,000 |
||
|
|
|
|
|
(2,00,000
× 10/100) |
|
||
|
|
|
2,20,000 |
|
|
2,20,000 |
||
|
2023 |
|
|
2022 |
|
|
||
|
March 31 |
To Bank
A/c (1,00,000 + 10,000) |
1,10,000 |
April 01 |
By
balance b/d |
1,00,000 |
||
|
|
|
|
2023 |
|
|
||
|
|
|
|
March 31 |
By
Interest on Loan A/c
|
10,000 |
||
|
|
|
|
|
(1,00,000
× 10/100) |
|
||
|
|
|
1,10,000 |
|
|
1,10,000 |
||
|
|
|
|
|
|
|
||
Working Notes:
Amount payable per Installment = ₹ (3,00,000/3)
= ₹ 1,00,000
Question 39:
Rakesh
retired from the firm. The amount due to him was determined at ₹
90,000. It was decided to pay the due amount as follows:
On the date of retirement − ₹ 30,000
Balance in three yearly instalments −
First two instalments being of ₹ 26,000,
including interest; and Balance amount as last instalment.
Interest was payable @ 10% p.a. Prepare retiring Partners' Loan Account.
Answer:
|
Dr. |
Rakesh’s Loan A/c |
Cr. |
||||
|
Date |
Particulars |
(₹) |
Date |
Particulars |
(₹) |
|
|
Year I |
To Bank
A/c (20,000 + 6,000) |
26,000 |
Year I |
By Y’s
Capital
A/c |
60,000 |
|
|
|
To
balance c/d |
40,000 |
|
|
|
|
|
|
|
|
|
By
Interest on Loan A/c
|
6,000 |
|
|
|
|
|
|
(60,000
× 10/100) |
|
|
|
|
|
66,000 |
|
|
66,000 |
|
|
|
|
|
|
|
|
|
|
Year II |
To Bank
A/c (22,000 + 4,000) |
26,000 |
Year II |
By
balance b/d |
40,000 |
|
|
|
To
balance c/d |
18,000 |
|
|
|
|
|
|
|
|
|
By
Interest on Loan A/c |
4,000 |
|
|
|
|
|
|
(40,000
× 10/100) |
|
|
|
|
|
44,000 |
|
|
44,000 |
|
|
|
|
|
|
|
|
|
|
Year III |
To Bank
A/c (18,000 + 1,800) |
19,800 |
Year III |
By
balance b/d |
18,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By
Interest on Loan A/c |
1,800 |
|
|
|
|
|
|
(18,000
× 10/100) |
|
|
|
|
|
19,800 |
|
|
19,800 |
|
|
|
|
|
|
|
|
|
Question 40: Ram,
Manohar and Joshi were partners in a firm. Manohar retired and his claim including his capital and
share of goodwill was ₹1,80,000. There was an
unrecorded furniture estimated at ₹ 9,000, half of which was given for an
unrecorded liability of ₹18,000 in settlement of claim of ₹9,000
and remaining half was taken by Manohar at a discount
of 10% in part satisfaction of his claim. Balance of Manohar's
claim was discharged by bank draft. Pass necessary Journal entries to record
the above transactions.
Answer:
Date
|
Particulars
|
|
L.F.
|
Dr. ₹
|
Cr. ₹
|
|
|
B’s capital a/c
|
Dr.
|
|
4,050
|
|
To
Revaluation a/c
|
|
|
|
4,050
|
|
(Being unrecorded furniture taken over by
partner B)
|
|
|
|
|
|
Revaluation a/c
|
Dr.
|
|
9,000
|
|
|
To
unrecorded liabilities a/c
|
|
|
|
9,000
|
|
(Being remaining unrecorded Liabilities paid by
partner)
|
|
|
|
|
|
B’s capital a/c
|
Dr.
|
|
1,650
|
|
|
To
Revaluation a/c
|
|
|
|
1,650
|
|
(Being loss on revaluation debited to B’s
capital)
|
|
|
|
|
|
B’s capital a/c
|
Dr.
|
|
1,74,300
|
|
|
To
Bank a/c
|
|
|
|
1,74,300
|
|
(Being final amount paid to B’s capital on
his retirement by bank draft)
|
|
|
|
|
|
Total
|
|
|
1,89,000
|
1,89,000
|
|
|
|
|
|
|
|
Ts Grewal Solution 2025-2026
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Class 12 / Volume – I