Question no 43 of TS Grewal. in this the bank balance in the answer is given 2,350 instead of 2,750 why ?

The closing Bank Balance should be Rs 2,350 and not Rs 2,750. Check out the following solution for further clarifications.

Revaluation Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Stock (4,000 × 6%)

240

Factory Building (12,500 × 20%)

2,500

Provision for Doubtful debts (125 – 50)

75

 

 

Reserve for Legal Charges

385

 

 

Profit transferred to Capital A/c:

 

 

 

A

800

 

 

B

600

 

 

C

400

 

 

 

2,500

 

2,500

 

 

Partners’ Capital Accounts

Dr.

 

 

 

 

 

 

Cr.

Particulars

A

B

C

Particular

A

B

C

B’s Capital (Goodwill)

1,200

 

600

Balance b/d

10,000

7,500

5,000

 

 

 

 

Revaluation

800

600

400

B’s Loan

 

9,900

 

A’s Capital (Goodwill)

 

1,200

 

 

 

 

 

C’s Capital (Goodwill)

 

600

 

Balance c/d

9,600

 

4,800

 

 

 

 

 

10,800

9,900

4,800

 

10,800

9,900

5,400

Bank

267

 

133

Balance

9,600

 

4,800

Balance c/d (adjusted)

9,333

 

4667

 

 

 

 

 

9,600

 

4,800

 

9,600

 

4,800

 

 

 

 

 

 

 

 

 

Balance Sheet

as on March 31,2012 after Y’s retirement

Liabilities

Amount

Rs

Assets

Amount

Rs

Bills Payable

1,000

Bank Balance

2,350

Sundry Creditors

2,450

Debtors

2,500

 

Reserve for Legal Charges

385

Less: 5% Provision for Doubtful debts

(125)

2,375

B’s Loan

9,900

Stock (4,000 – 240)

3,760

Capital A/c

 

Plant and Machinery

4,250

A

9,333

 

Factory Building (12,500 + 2,500)

15,000

C

4,667

14,000

 

 

 

27,735

 

27,735

 

 

 

 

 

Bank Account

Dr.

 

 

Cr.

Particulars

Amount

Rs

Particular

Amount

Rs

Balance b/d

2,750

A’s Capital 

267

 

 

B’s Capital 

133

 

 

Balance c/d

2,350

 

2,750

 

2,750

 

 

 

 

Working Notes:

 

1.

 

2. Proportionate Capital of A and C after B’s retirement

3. Adjustment of Goodwill

B’s share of Goodwill

A’s gain in Goodwill

C’s gain in Goodwill 

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The correct answer is 2,350 only. bcoz in bank a/c on dr. side  [TO BAL. B/D = 2,750] and on cr. side[ BY A'S CAP. A/C = 267], [BY C'S CAP. A/C = 133] AND AT LAST  [BY BAL C/D = 2,350]  which will give both sides the equal amount of 2,750. 

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