Book Keeping Accountancy Solutions 2014 Solutions for Class 12 Commerce Accountancy Chapter 4 Reconstitution Of Partnership (Retirement Of Partnership) are provided here with simple step-by-step explanations. These solutions for Reconstitution Of Partnership (Retirement Of Partnership) are extremely popular among class 12 Commerce students for Accountancy Reconstitution Of Partnership (Retirement Of Partnership) Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the Book Keeping Accountancy Solutions 2014 Book of class 12 Commerce Accountancy Chapter 4 are provided here for you for free. You will also love the ad-free experience on Meritnation’s Book Keeping Accountancy Solutions 2014 Solutions. All Book Keeping Accountancy Solutions 2014 Solutions for class 12 Commerce Accountancy are prepared by experts and are 100% accurate.
Page No 127:
Question 1.A1:
Objective type questions :
Answer in one sentence only.
Who is a retiring partner?
Answer:
A partner retiring from a firm, i.e. ceasing to be a partner of the firm due to agreement between them or at his own will or due to any other reason, is called a retiring partner.
Page No 127:
Question 1.A2:
Objective type questions :
Answer in one sentence only.
What is gaining ratio?
Answer:
Gaining ratio is the ratio in which the continuing partners acquire the retiring partner’s share. It is calculated on retirement or death of a partner for adjusting the retiring partner’s share of goodwill. The formula for calculation of gaining ratio is as follows:
Page No 127:
Question 1.A3:
Objective type questions :
Answer in one sentence only.
How would you treat General Reserve on retirement of a partner?
Answer:
The amount of general reserve is transferred to the capital accounts of all the partners in their profit sharing ratio. This is done to give the retiring partner his amount of share in the accumulated profits of the firm. Hence, All Partners’ Capital Accounts are credited with their respective shares.
Page No 127:
Question 1.A4:
Objective type questions :
Answer in one sentence only.
How is amount due to a retiring partner settled?
Answer:
The amount due to a retiring partner is assumed to be paid through loan if nothing is mentioned in the question regarding the mode of payment. The capital account of the retiring or the deceased partner is closed by transferring the balancing figure to the credit side of the Retiring/Deceased Partner’s Loan A/c. The Retiring/Deceased Partner’s Loan A/c will be shown on the Liabilities side of the New Balance Sheet (post retirement/death).
Page No 127:
Question 1.A5:
Objective type questions :
Answer in one sentence only.
How would you adjust retiring partner’s share of goodwill without opening goodwill account?
Answer:
The retiring partner is paid his share of goodwill by debiting the Remaining Partners’ Capital Accounts in their gaining ratio and crediting the Retiring Partner’s Capital Account with the amount of premium.
Page No 127:
Question 1.A6:
Objective type questions :
Answer in one sentence only.
When is the gaining ratio to be calculated?
Answer:
Gaining ratio needs to be calculated at the time of retirement or death of a partner for adjusting the retiring (or deceased) partner’s share of goodwill.
Page No 127:
Question 1.B1:
Write the term / word / phrase which can substitute each of the following statement :
The account which shows revaluation of assets and liabilities.
Answer:
Revaluation or Profit and Loss Adjustment Account
Explanation: The account which shows revaluation of assets and liabilities is called Revaluation or Profit and Loss Adjustment Account. This account records the revised values of assets and liabilities, so that the retiring partner can be paid his share of profits that the firm has earned till the date of his retirement.
Page No 127:
Question 1.B2:
Write the term / word / phrase which can substitute each of the following statement :
Debit balance of revaluation account.
Answer:
Loss on revaluation
Explanation: Debit balance of Revaluation Account represents "Loss on revaluation." Such loss is transferred to All Partners’ Capital Accounts in their old profit-sharing ratio (including the retiring partner).
Page No 127:
Question 1.B3:
Write the term / word / phrase which can substitute each of the following statement :
The proportion in which the continuing partners benefit due to retirement of partner.
Answer:
Gaining Ratio
Explanation: The proportion in which the continuing partners benefit due to retirement of a partner is called gaining ratio. It is calculated on the retirement or death of a partner for adjusting the retiring/deceased partner’s share of goodwill.
Page No 127:
Question 1.B4:
Write the term / word / phrase which can substitute each of the following statement :
Excess of actual capital over proportionate capital.
Answer:
Surplus Capital
Explanation: Excess of actual capital over proportionate capital is regarded as surplus capital. This implies that the actual capital of the partners is more than what the capital should be on a proportionate basis. It is to be transferred to the current account or it may be withdrawn by the partners as per the terms of the agreement.
Page No 127:
Question 1.B5:
Write the term / word / phrase which can substitute each of the following statement :
The method under which amount payable to the retiring partner is paid off at a time.
Answer:
Lump-sum method
Explanation: The method under which the amount payable to a retiring partner is paid off at a time is termed as Lump-sum method. Under this method, nothing is to be transferred to his loan account, as the payment is made in one single instalment and accordingly, no interest is to be paid to him.
Page No 127:
Question 1.B6:
Write the term / word / phrase which can substitute each of the following statement :
Capital account of a retiring partner always shows balance.
Answer:
Credit balance
Explanation: The capital account of a retiring partner always shows credit balance. This is because the amount due to him in the form of share in profits of revaluation account, share of goodwill, accumulated profits and reserves, etc. is always more than the amount which decreases his claim such as drawings, share in accumulated losses, etc.
Page No 127:
Question 1.C1:
Select the most appropriate answer from the alternatives given below :
The profit or loss from revaluation on retirement of partner is shared by ___________.
a) all the partners
b) the remaining partners
c) only retiring partner
d) none of these
Answer:
The profit or loss from revaluation on retirement of a partner is shared by all the partners.
Explanation: Revaluation profit arising on retirement of a partner is shared by all the partners in their old profit sharing ratio (including the retiring partner).
Page No 127:
Question 1.C2:
Select the most appropriate answer from the alternatives given below :
X, Y, and Z are partners sharing profits in the ratio of 5:3:2. If Y retires then new ratio will be ___________.
a) 5:2
b) 5:3
c) 3:2
d) 1:1
Answer:
X, Y, and Z are partners sharing profits in the ratio of 5:3:2. If Y retires, then the new ratio will be 5:2.
Explanation: The new profit sharing ratio between X and Z can be calculated by simply striking out the share of the retiring partner, i.e. Y. In the given question, Y retires. So, his share will be taken out and the remaining partners will share future profits or losses in the ratio of 5:2.
Page No 127:
Question 1.C3:
Select the most appropriate answer from the alternatives given below :
When goodwill is raised at its full value and it is written off __________ account is to be credited.
a) cash
b) goodwill
c) all partners capital account
d) loan
Answer:
When goodwill is raised at its full value and it is written off, goodwill account is to be credited.
Explanation: When goodwill is raised in the books of the firm at its full value and it is written off, then Goodwill Account is to be credited and all partners’ Capital Accounts are to be debited in their old profit sharing ratio.
Page No 127:
Question 1.C4:
Select the most appropriate answer from the alternatives given below :
Increase in the value of assets should be ___________ to profit and loss adjustment account.
a) debited
b) credited
c) added
d) none of there
Answer:
Increase in the value of assets should be credited to profit and loss adjustment account.
Explanation: Increase in the value of assets represents appreciation and is a gain for the firm. Therefore, the increased value (of asset) is shown on credit side of the Revaluation Account.
Page No 127:
Question 1.C5:
Select the most appropriate answer from the alternatives given below :
If the goodwill is raised to the extent of retiring partners share ___________ account is to be debited.
a) cash
b) goodwill
c) all partner’s capital
d) retiring partners capital
Answer:
If the goodwill is raised to the extent of retiring partner’s share, goodwill account is to be debited.
Explanation: If the goodwill is raised to the extent of the retiring partner’s share, Goodwill Account is to be debited. It means that the continuing partners have not compensated their share in favour of the retiring partner; so, there is no need to calculate gaining ratio. Still, the retiring partner’s share of goodwill is to be paid, due to which the goodwill account is to be debited.
Page No 127:
Question 1.D1:
State whether the following statements are true or false :
Gaining ratio means old ratio minus new ratio.
Answer:
False
Explanation: Gaining ratio is the ratio in which continuing partners acquire the retiring partner’s share. In other words,
Hence, the given statement is incorrect.
Page No 127:
Question 1.D2:
State whether the following statements are true or false :
Retiring partner’s share in profit up to the date of his retirement will be debited to profit and loss suspense account.
Answer:
True
Explanation: The retiring partner is entitled to his share of profits or losses that have arisen till the date of his retirement. Such shares are dispensed to the retiring partner by debiting the Profit & Loss Suspense Account and crediting the Retiring Partner’s Capital Account. Profit and Loss Suspense Account is opened if any partner retires during the middle of the year as against the usual case of retirement at the year end.
Page No 127:
Question 1.D3:
State whether the following statements are true or false :
Amount due to a retiring partner if not paid, appears as his loan in the books of the firm.
Answer:
True
Explanation: Amount due to a retiring partner, if not paid, appears as his loan in the books of the firm, as it represents a liability that needs to be paid. Also, interest @ 6% p.a. is allowed till the date such amount remains outstanding.
Page No 127:
Question 1.D4:
State whether the following statements are true or false :
Revaluation account is also called Realisation account.
Answer:
False
Explanation: Revaluation Account is different from Realisation Account. Revaluation Account is prepared at the time of admission, retirement or death of a partner, which records the effect of changes in the value of assets and liabilities, whereas, Realisation Account is prepared at the time of dissolution of a firm to record the realisation of assets and settlement of liabilities.
Page No 127:
Question 1.D5:
State whether the following statements are true or false :
Retirement of a partner leads to dissolution of the firm unless otherwise agreed upon.
Answer:
True
Explanation: The above statement is true, especially where there are only two partners in a firm and one of them retires. In order to continue the partnership, the firm needs to admit a new partner. Otherwise, the firm will be dissolved.
Page No 127:
Question 1.D6:
State whether the following statements are true or false :
Profit on revaluation account is transferred to continuing partners’ capital account only.
Answer:
False
Explanation: Revaluation Profit is credited to All Partners’ Capital Accounts (including the retiring partners) in their old profit sharing ratio.
Page No 128:
Question 1:
PRACTICAL PROBLEM
Sanil, Nitish, Sapna were partners in a firm sharing profits and losses in the proportion of 1/2, 1/3 and 1/6 respectively. Their Balance Sheet as on 31st March, 2012 was as follows:
|
Balance Sheet as on 31-03-2012
|
|||
|
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
|
Bills Payable
|
30,000
|
Machinery
|
40,000
|
|
Capitals:
|
|
Furniture
|
5,000
|
|
Sanil
|
80,000
|
Sundry Assets
|
60,000
|
|
Nitish
|
50,000
|
Stock
|
30,000
|
|
Sapna
|
30,000
|
Debtors
|
32,000
|
|
|
|
Bank
|
23,000
|
|
|
1,90,000
|
|
1,90,000
|
|
|
|
|
|
Sapna decided to retire on 1st April 2012 on following terms:-
1) Goodwill of the firm will be valued at Rs 30,000/-
2) Furniture was taken over by Sanil for Rs 4,700/-
3) Make a provision for unpaid expenses Rs 1,700/-
4) Out of the amount due to Sapna Rs 7,500/- to be paid by cheque and the remaining amount to be transferred to her loan account.
Answer:
|
Profit and Loss Adjustment Account
|
|||||
|
Dr.
|
Cr.
|
||||
|
Particulars
|
Amount
Rs
|
Particulars
|
Amount
Rs
|
||
|
|
|
|
|
||
|
Furniture
|
300
|
Loss transferred to:
|
|
||
|
Provision for Unpaid Expenses
|
1,700
|
Sanil’s Capital
|
1,000
|
|
|
|
|
|
Nitish’s Capital
|
667
|
|
|
|
|
|
Sapna’s Capital
|
333
|
2,000
|
|
|
|
2,000
|
|
2,000
|
||
|
|
|
|
|
||
|
Partners’ Capital Accounts
|
||||||||
|
Dr.
|
Cr.
|
|||||||
|
Particulars
|
Sanil
|
Nitish
|
Sapna
|
Particulars
|
Sanil
|
Nitish
|
Sapna
|
|
|
Profit and Loss Adjustment A/c (Loss)
|
1,000
|
667
|
333
|
Balance b/d
|
80,000
|
50,000
|
30,000
|
|
|
Furniture A/c
|
4,700
|
|
|
Goodwill
|
15,000
|
10,000
|
5,000
|
|
|
Bank A/c
|
|
|
7,500
|
|
|
|
|
|
|
Loan A/c
|
|
|
27,167
|
|
|
|
|
|
|
Balance c/d
|
89,300
|
59,333
|
|
|
|
|
|
|
|
|
95,000
|
60,000
|
35,000
|
|
95,000
|
60,000
|
35,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet
as on April 01, 2012 after Sapna’s retirement
|
||||
|
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
|
|
|
|
|
|
|
|
Bills Payable
|
30,000
|
Machinery
|
40,000
|
|
|
Capital A/cs:
|
|
Sundry Assets
|
60,000
|
|
|
Sanil
|
89,300
|
|
Stock
|
30,000
|
|
Nitish
|
59,333
|
1,48,633
|
Debtors
|
32,000
|
|
Provision for Unpaid Expenses
|
1,700
|
Bank (23,000-7,500)
|
15,500
|
|
|
Loan A/c of Sapna
|
27,167
|
Goodwill
|
30,000
|
|
|
|
2,07,500
|
|
2,07,500
|
|
|
|
|
|
|
|
Note: As per the book the Total of Balance Sheet is Rs 2,12,200 but as per our solution it should be Rs 2,07,500.
Page No 128:
Question 2:
PRACTICAL PROBLEM
Pai, Amba and Manoj are partners in a firm sharing profit and losses in the proportion to their capitals. Their Balance Sheet as on 31.3.2012 is as follow:
|
Balance Sheet as on 31st March, 2012
|
|||
|
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
|
Capitals
|
|
Cash
|
3,000
|
|
Pai
|
30,000
|
Stock
|
12,000
|
|
Amba
|
30,000
|
Debtors
|
20,000
|
|
Manoj
|
15,000
|
Plant
|
13,000
|
|
Creditors
|
7,000
|
Building
|
20,000
|
|
Outstanding Expenses
|
15,000
|
Motor Van
|
31,000
|
|
Profit and Loss A/c
|
20,000
|
Goodwill
|
18,000
|
|
|
1,17,000
|
|
1,17,000
|
|
|
|
|
|
On the above date Pai retired and the following adjustments have been agreed upon
1) Goodwill was revalued at Rs 15,000
2) Assets and Liabilities were revalued as under debtors Rs 17,000 stock at 90% of book value Building Rs 35,000 Plant Rs 11,500 Motor Van Rs 29, 500, Outstanding expenses Rs 18,000
3) Amba and Manoj contributed additional capital of Rs 20,000 and Rs 10,000 respectively
4) Balance due to Mr. Pai is transferred to his loan account after paying him Rs 1,000/-
Prepare:- Profit and Loss adjustment A/c,. Partner’s Capital A/c’s and Balance Sheet of new firm
Answer:
|
Profit and Loss Adjustment Account
|
|||||
|
Dr.
|
Cr.
|
||||
|
Particulars
|
Amount
Rs
|
Particulars
|
Amount
Rs
|
||
|
|
|
|
|
||
|
Reserve for Discount on Debtors
|
3,000
|
Building
|
15,000
|
||
|
Stock
|
1,200
|
|
|
||
|
Plant
|
1,500
|
|
|
||
|
Motor van
|
1,500
|
|
|
||
|
Outstanding Expenses
|
3,000
|
|
|
||
|
Goodwill
|
3,000
|
|
|
||
|
Profit transferred to:
|
|
|
|
||
|
Pai’s Capital
|
720
|
|
|
|
|
|
Amba’s Capital
|
720
|
|
|
|
|
|
Manoj’s Capital
|
360
|
1,800
|
|
|
|
|
|
15,000
|
|
15,000
|
||
|
|
|
|
|
||
|
Partners’ Capital Accounts
|
||||||||
|
Dr.
|
Cr.
|
|||||||
|
Particulars
|
Pai
|
Amba
|
Manoj
|
Particulars
|
Pai
|
Amba
|
Manoj
|
|
|
Cash A/c
|
1,000
|
|
|
Balance b/d
|
30,000
|
30,000
|
15,000
|
|
|
Loan A/c
|
37,720
|
|
|
Profit and Loss Adjustment
A/c (Profit) |
720
|
720
|
360
|
|
|
Balance c/d
|
|
58,720
|
29,360
|
Profit and Loss A/c
|
8,000
|
8,000
|
4,000
|
|
|
|
|
|
|
Cash A/c
|
|
20,000
|
10,000
|
|
|
|
38,720
|
58,720
|
29,360
|
|
38,720
|
58,720
|
29,360
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet
as on April 01, 2012 after Pai’s retirement
|
|||||
|
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
||
|
|
|
|
|
||
|
Creditors
|
7,000
|
Stock
|
12,000
|
|
|
|
Outstanding Expenses
|
18,000
|
Less: Depreciation
|
1,200
|
10,800
|
|
|
Capital A/cs:
|
|
Building
|
35,000
|
||
|
Amba
|
58,720
|
|
Debtors
|
20,000
|
|
|
Manoj
|
29,360
|
88,080
|
Less: Reserve for Doubtful Debts
|
3,000
|
17,000
|
|
Loan A/c of Pai
|
37,720
|
Motor Van
|
31,000
|
|
|
|
|
|
Less: Depreciation
|
1,500
|
29,500
|
|
|
|
|
Goodwill
|
15,000
|
||
|
|
|
Plant
|
13,000
|
|
|
|
|
|
Less: Depreciation
|
1,500
|
11,500
|
|
|
|
|
Cash
|
32,000
|
||
|
|
1,50,800
|
|
1,50,800
|
||
|
|
|
|
|
||
Working Notes:
WN1: Distribution of Profit and Loss A/c
|
Cash Account |
||||
|
Dr. |
Cr. |
|||
|
Particulars |
Amount (Rs) |
Particulars |
Amount (Rs) |
|
|
|
|
|
|
|
|
Balance b/d |
3,000 |
Pai’s Capital A/c |
1,000 |
|
|
Capital A/cs: |
|
Balance c/d |
32,000 |
|
|
Amba |
20,000 |
|
|
|
|
Manoj |
10,000 |
30,000 |
|
|
|
|
33,000 |
|
33,000 |
|
|
|
|
|
|
|
Page No 129:
Question 3:
PRACTICAL PROBLEM
Shailesh, Anil and Das were partners sharing profits and losses in the ratio at 3:3:2.
Their Balance Sheet as on 31.3.2012 is as below:
|
Balance Sheet as on 31st March, 2012
|
|||
|
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
|
Capitals
|
|
Building
|
10,000
|
|
Shailesh
|
11,000
|
Machinery
|
10,700
|
|
Anil
|
15,000
|
Furniture
|
10,000
|
|
Das
|
8,000
|
Debtors
|
5,000
|
|
Bills Payable
|
1,900
|
Stock
|
6,600
|
|
Creditors
|
9,000
|
Cash
|
6,600
|
|
Reserve fund
|
4,000
|
|
|
|
|
48,900
|
|
48,900
|
|
|
|
|
|
In 1st April, 2012 Mr. Das retired from the firm on following terms:
1) Shailesh and Anil’s share in reserve fund should be continued in new firm.
2) Goodwill of the firm is to be valued at Rs 4,000 however only Das’s share in it is to be raised in the books and written off immediately
3) Assets to be revalued as under stock Rs 6,300 machinery Rs 10,000 furniture Rs 10,200
4) R.D.D. to be maintained at 10% on debtors
5) Rs 100 to be written off from creditors
6) The amount payable to Mr. Das is to be transferred to his loan account
Prepare:- Profit and Loss adjustment A/c, Partners capital A/c and Balance Sheet of New firm on 1/04/2012
Answer:
|
Profit and Loss Adjustment Account
|
|||||
|
Dr.
|
Cr.
|
||||
|
Particulars
|
Amount
Rs
|
Particulars
|
Amount
Rs
|
||
|
|
|
|
|
||
|
Stock
|
300
|
Furniture
|
200
|
||
|
Machinery
|
700
|
Creditors
|
100
|
||
|
Reserve for Doubtful Debts
|
500
|
Loss transferred to:
|
|
||
|
|
|
Shailesh’s Capital
|
450
|
|
|
|
|
|
Anil’s Capital
|
450
|
|
|
|
|
|
Das’s Capital
|
300
|
1,200
|
|
|
|
1,500
|
|
1,500
|
||
|
|
|
|
|
||
|
Partners’ Capital Accounts
|
||||||||
|
Dr.
|
Cr.
|
|||||||
|
Particulars
|
Shailesh
|
Anil
|
Das
|
Particulars
|
Shailesh
|
Anil
|
Das
|
|
|
Profit and Loss Adjustment A/c (Loss)
|
450
|
450
|
300
|
Balance b/d
|
11,000
|
15,000
|
8,000
|
|
|
Loan A/c
|
|
|
9,700
|
Reserve Fund
|
|
|
1,000
|
|
|
Goodwill (Written off)
|
500
|
500
|
|
|
|
|
|
|
|
Balance c/d
|
10,050
|
14,050
|
|
Goodwill
|
|
|
1,000
|
|
|
|
11,000
|
15,000
|
10,000
|
|
11,000
|
15,000
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2012 after Mr. Das’s retirement |
|||||
|
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
|
|
|
|
|
||
|
Creditors |
8,900 |
Cash |
6,600 |
||
|
Reserve Fund |
3,000 |
Machinery |
10,700 |
|
|
|
Capital |
|
Less: Depreciation |
700 |
10,000 |
|
|
Shailesh |
10,050 |
|
Stock |
6,600 |
|
|
Anil |
14,050 |
24,100 |
Less: Depreciation |
300 |
6,300 |
|
Bills Payable |
1,900 |
Debtors |
5,000 |
|
|
|
Loan A/c of Mr. Das |
9,700 |
Less: Reserve for Doubtful Debts |
500 |
4,500 |
|
|
|
|
Furniture |
10,200 |
||
|
|
|
Building |
10,000 |
||
|
|
47,600 |
|
47,600 |
||
|
|
|
|
|
||
Neha
Working Notes:
WN1: Calculation of Gaining Ratio
WN2: Calculation Share of Goodwill
WN3: Goodwill written off
Page No 129:
Question 4:
PRACTICAL PROBLEM
Shedge, Mayekar and Raut were partners sharing profits and losses in the ratio of 4: 3: 3.
Their Balance Sheet on 31st March 2012 was as given below:-
|
Balance Sheet as on 31st March, 2012
|
|||
|
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
|
Capitals
|
|
Furniture
|
4,200
|
|
Shedge
|
15,000
|
Stock
|
13,000
|
|
Mayekar
|
10,000
|
Debtors
|
10,000
|
|
Raut
|
10,000
|
Bill Receivable
|
18,000
|
|
Creditors
|
8,000
|
Cash/Bank
|
2,000
|
|
Bank Overdraft
|
10,000
|
Profit and Loss A/c (Loss)
|
5,800
|
|
|
53,000
|
|
53,000
|
|
|
|
|
|
Raut retired from the business on above date and it was agreed that the amount due to Raut to be paid immediately by availing overdraft facility
1) His share of goodwill was raised at Rs 3,500
2) Revalue furniture Rs 4,000 and stock Rs 16,000
3) Create R.D.D. at 5% on Debtors.
4) Make provision for outstanding printing bill Rs 6,000. Prepare profit and loss adjustment A/c, Capital A/c and Balance Sheet of continuing partners assuming that goodwill is written off by the continuing partners.
Answer:
|
Profit and Loss Adjustment Account
|
|||||
|
Dr.
|
Cr.
|
||||
|
Particulars
|
Amount
Rs
|
Particulars
|
Amount
Rs
|
||
|
|
|
|
|
||
|
Furniture
|
200
|
Stock
|
3,000
|
||
|
Reserve for Doubtful Debts
|
500
|
Loss to be transferred to:
|
|
||
|
Provision for Outstanding Printing Bill
|
6,000
|
Shedge’s Capital
|
1,480
|
|
|
|
|
|
Mayekar’s Capital
|
1,110
|
|
|
|
|
|
Raut’s Capital
|
1,110
|
3,700
|
|
|
|
6,700
|
|
6,700
|
||
|
|
|
|
|
||
|
Partners’ Capital Accounts
|
||||||||
|
Dr.
|
Cr.
|
|||||||
|
Particulars
|
Shedge
|
Mayeker
|
Raut
|
Particulars
|
Shedge
|
Mayeker
|
Raut
|
|
|
Profit and Loss Adjustment A/c (Loss)
|
1,480
|
1,110
|
1,110
|
Balance b/d
|
15,000
|
10,000
|
10,000
|
|
|
Profit and Loss A/c (Loss)
|
2,320
|
1,740
|
1,740
|
Goodwill
|
|
|
3,500
|
|
|
Goodwill (written off)
|
2,000
|
1,500
|
|
|
|
|
|
|
|
Bank A/c
|
|
|
10,650
|
|
|
|
|
|
|
Balance c/d
|
9,200
|
5,650
|
|
|
|
|
|
|
|
|
15,000
|
10,000
|
13,500
|
|
15,000
|
10,000
|
13,500
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet
as on April 01, 2012 after Raut’s retirement
|
|||||
|
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
||
|
|
|
|
|
||
|
Creditors
|
8,000
|
Furniture
|
4,200
|
|
|
|
Bank Overdraft
|
18,650
|
Less: Depreciation
|
200
|
4,000
|
|
|
Capital A/cs:
|
|
Stock
|
16,000
|
||
|
Shedge
|
9,200
|
|
Debtors
|
10,000
|
|
|
Mayeker
|
5,650
|
14,850
|
Less: Provision for doubtful debts
|
500
|
9,500
|
|
Provision for Outstanding Printing Bill
|
6,000
|
Bills Receivable
|
18,000
|
||
|
|
47,500
|
|
47,500
|
||
|
|
|
|
|
||
Working Notes:
WN1: Distribution of Profit and Loss A/c (Loss)
WN2: Goodwill written off
Page No 130:
Question 5:
PRACTICAL PROBLEM
Sathe, Deshpande and Madlani were partners sharing profits and losses in the ratio of 5:2:3.
Their Balance Sheet was as follows:
|
Balance Sheet as on 31st March, 2012
|
||||
|
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
|
|
Capitals
|
|
Plant and Machinery
|
50,000
|
|
|
Sathe
|
70,000
|
Building
|
1,00,000
|
|
|
Deshpande
|
80,000
|
Motor Van
|
20,000
|
|
|
Madlani
|
50,000
|
Stock
|
30,000
|
|
|
Creditors
|
25,000
|
Debtors
|
36,000 |
|
|
Bills Payable
|
12,000
|
Less: R.D.D.
|
2,000 |
34,000
|
|
Reserve Fund
|
25,000
|
Cash
|
28,000
|
|
|
|
2,62,000
|
|
2,62,000
|
|
|
|
|
|
|
|
Deshpande retired on that date on the following terms:
1) Plant to be depreciated by 10% and Motor Van by 20%.
2) Stock to be appreciated by 10% and building by 20%.
3) R.D.D. is no longer necessary
4) Provision is to be made for Rs 8,000 being compensation to worker
5) The goodwill of the firm to be valued at Rs 40,000 and Deshpande’s share in it should be raised.
6) Both the remaining partners decided to write off the goodwill
7) Amount payable to Shri. Deshpande to be kept as his Loan
Prepare:
1 ) Profit and Loss Adjustment Account
2) Partner’s Capital Accounts
3) New Balance Sheet
Answer:
|
Profit and Loss Adjustment Account
|
|||||
|
Dr.
|
Cr.
|
||||
|
Particulars
|
Amount
Rs
|
Particulars
|
Amount
Rs
|
||
|
|
|
|
|
||
|
Plant and Machinery
|
5,000
|
Stock
|
3,000
|
||
|
Motor Van
|
4,000
|
Building
|
20,000
|
||
|
Provision for Compensation to workers
|
8,000
|
Reserve for Doubtful Debts
|
2,000
|
||
|
Profit transferred to:
|
|
|
|
||
|
Sathe’s Capital
|
4,000
|
|
|
|
|
|
Deshpande’s Capital
|
1,600
|
|
|
|
|
|
Madlani’s Capital
|
2,400
|
8,000
|
|
|
|
|
|
25,000
|
|
25,000
|
||
|
|
|
|
|
||
|
Partners’ Capital Accounts
|
||||||||
|
Dr.
|
Cr.
|
|||||||
|
Particulars
|
Sathe
|
Deshpande
|
Madlani
|
Particulars
|
Sathe
|
Deshpande
|
Madlani
|
|
|
Goodwill (written off)
|
5,000
|
|
3,000
|
Balance b/d
|
70,000
|
80,000
|
50,000
|
|
|
Loan A/c
|
81,500
|
94,600
|
56,900
|
Reserve Fund
|
12,500
|
5,000
|
7,500
|
|
|
|
|
|
|
Profit and Loss Adjustment A/c (Profit)
|
4,000
|
1,600
|
2,400
|
|
|
|
|
|
|
Goodwill
|
|
8,000
|
|
|
|
|
86,500
|
94,600
|
59,900
|
|
86,500
|
94,600
|
59,900
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet
as on April 01, 2012 after Deshpande’s retirement
|
|||||
|
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
||
|
|
|
|
|
||
|
Creditors
|
25,000
|
Plant
|
50,000
|
|
|
|
Bills Payable
|
12,000
|
Less: Depreciation
|
5,000
|
45,000
|
|
|
Provision for worker’s compensation
|
8,000
|
Motor Van
|
20,000
|
|
|
|
Loan A/c of Deshpande
|
94,600
|
Less: Depreciation
|
4,000
|
16,000
|
|
|
Capital A/cs:
|
|
Debtors
|
36,000
|
||
|
Sathe
|
81,500
|
|
Building
|
1,20,000
|
|
|
Madlani
|
56,900
|
1,38,400
|
Stock
|
33,000
|
|
|
|
|
Cash
|
28,000
|
||
|
|
2,78,000
|
|
2,78,000
|
||
|
|
|
|
|
||
Working Notes:
WN1: Distribution of Reserve Fund:
WN2: Calculation Share of Goodwill
WN3: Goodwill written off
Note: According to the solution provided in the book, amount paid to Deshpande is Rs 34,600 but according to our solution it is Rs 94,600.
View NCERT Solutions for all chapters of Class 15