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RETIREMENT QUESTIONS 36 TO 48

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RETIREMENT  QUESTIONS 36 TO 48 Powered By Docstoc
					        Chapter 6
Retirement / Death of a Partner
36. Sol.                       Revaluation A/c
           Particulars                  Rs.             Particulars                Rs.
To Provision for D/D = 15,000 × 5%      750 By Land & Building = 1,00,000 × 20% 20,000
To Machinery w/o = 50,000 × 10%       5,000
To Stock w/o = 30,000 × 5%            1,500
To Provision for legal charges        1,500
To Capital A/c – Profits
  A = 11,250 × 4/9 = 5,000
  B = 11,250 × 3/9 = 3,750
  C = 11,250 × 2/9 = 2,500           11,250
                                     20,000                                     20,000
                                Partner’s Capital A/c
   Particulars        A        B       C           Particulars         A        B       C
To B’s A/c – G/w                             By Bal. b/d             70,000   45,000   30,000
 (6,000 in 2 : 1)    4,000             2,000 By Gen Reserve          12,000    9,000    6,000
To Cash A/c                   5,000          By Rev. A/c – Profit     5,000    3,750    2,500
To B’s Loan                  63,250          By JLP A/c
To Balance c/d      89,000            39,500 (13,500 in 4 : 3 : 2)    6,000    4,500    3,000
                                             By A & C A/c – G/w
                                              (18,000 × 3/9)                   6,000
                    93,000   68,250   41,500                         93,000   68,250   41,500
                     Balance Sheet of Reconstituted Firm
       Liabilities              Rs.                  Assets                      Rs.
Creditors                     33,000 Cash (10,000 – 5,000)                      5,000
B’s Loan A/c                  63,250 Debtors (15,000 – 750)                    14,250
Legal charges                  1,500 Stock (30,000 – 1,500)                    28,500
A’s Capital 89,000                   Machinery (50,000 – 5,000)                45,000
C’s Capital 39,500          1,28,500 Land and Building (1,00,000 – 20,000)   1,20,000
                                     Joint Life Policy                         13,500

                            2,26,250                                         2,26,250
37. Sol.                     Revaluation A/c
           Particulars             Rs.             Particulars      Rs.
To Stock                        12,000 By Fixed Assets
To Provision for D/D                   (3,00,000 × 10%)          30,000
   (6,000 – 4,000)               2,000
To Capital A/c - Profits
  X = 16,000 × 3/8 = 6,000
  Y = 16,000 × 3/8 = 6,000
  Z = 16,000 × 2/8 = 4,000      16,000
                                30,000                           30,000
                                  Partner’s Capital A/c
   Particulars         X         Y        Z        Particulars        X        Y        Z
To Profit/Loss A/c     1,500     1,500  1,000 By Bal. b/d          1,00,000   60,000   50,000
To Ad Sus A/c          6,000     6,000  4,000 By Gen. Reserve        30,000   30,000   20,000
To Y’s A/c – G/w                              By Rev. A/c – profit    6,000    6,000    4,000
 (30,000 in 3 : 2)     18,000          12,000 By X & Z A/c – G/w
To Y’s Loan                   1,18,500         (80,000 × 3/8)                 30,000
To Bal. c/d          1,10,500          57,000
                     1,36,000 1,26,000 74,000                      1,36,000 1,26,000   74,000
                      Balance Sheet of Reconstituted Firm
        Liabilities              Rs.                  Assets                 Rs.
Sundry Creditors             2,50,000 Cash at Bank                        50,000
Partners’ Loan A/c                    Bills Receivable                    60,000
 X                             50,000 Debtors                 80,000
 Y (40,000 + 1,18,500)       1,58,500 Less Provision for B/D 6,000         74,000
Capital Accounts    X        1,10,500 Stock (1,24,000 – 12,000)          1,12,000
                    Z          57,000 Fixed Assets (3,00,000 + 30,000)   3,30,000
                             6,26,000                                    6,26,000
38. Sol.                       Journal Entries
 Date                          Particulars                          Dr.     Cr.
        Singh Capital A/c (3,000 × 3/10)                    Dr.     900
        Gupta Capital A/c (3,000 × 7/10)                    Dr.   2,100
                  To Khan Capital A/c (JLP = 9,000 × 2/6)                 3,000
        Singh’s GR = 3/5 – 3/6 = (18-15) / 30 = 3/30
        Gupta’s GR = 2/5 – 1/6 = (12 - 5) = 7/30
        Singh Capital A/c (10,000 × 3/6)                   Dr.    2,500
        Khan Capital A/c (10,000 × 2/6)                    Dr.    5,833
        Gupta Capital A/c (10,000 × 1/6)                   Dr.            8,333
                  To Khan Capital A/c (G/w = 25,000 × 2/6)
        Singh’s GR = 3/5 – 3/6 = (18 – 15) / 30 = 3/30
        Gupta’s GR = 2/5 – 1/6 = (12-5) = 7/30)
        General Reserve A/c                                 Dr.   9,000
                  To Singh Capital A/c (9,000 × 3/6)                      4,500
                  To Khan Capital A/c (9,000 × 2/6)                       3,000
                  To Gupta Capital A/c (9,000 × 1/6)                      1,500
Date                          Particulars                           Dr.      Cr.
       Revaluation A/c                                     Dr.    5,500
                 To Machinery A/c (45,000 × 10%)                           4,500
                 To Provision for D/D (20,000 × 5%)                        1,000
       Provision on Creditors (20,000 × 2 ½ %)             Dr.      500
       Patents A/c                                         Dr.    2,000
                  To Revaluation A/c                                       2,500
       Singh Capital A/c (9,000 × 3/6)                     Dr.    1,500
       Khan Capital A/c (9,000 × 2/6)                      Dr.    1,000
       Gupta Capital A/c (9,000 × 1/6)                     Dr.      500
                 To Revaluation A/c (Loss = 5,500 – 2,500)                 3,000
       Khan Capital A/c                                    Dr.   40,000
                 To Cash A/c                                              15,000
                 To Khan’s Loan A/c (Bal.)                                25,000
       Cash A/c                                            Dr.   15,000
                  To Singh Capital A/c                                     9,000
                  To Gupta Capital A/c                                     6,000
                                  Partner’s Capital A/c
   Particulars        Singh    Khan     Gupta       Particulars     Singh    Khan     Gupta
To Goodwill            5,000    3,333    1,667 By Bal. b/d          40,000   30,000   20,000
To Khan’s A/c                                  By Gen. Reserve       4,500    3,000    1,500
(Rs.8,333 in 3 : 7)      900             2,100 By Singh & Gupta
(Rs.3,000 in 3 : 7)    2,500             5,833 Share of Goodwill              8,333
To Rev. – Loss         1,500    1,000      500 Share of JLP                   3,000
To Cash A/c                    15,000          By Cash A/c
To Khan’s Loan                 25,000          (Rs.15,000 in 2:1)   10,000             5,000
To Bal. c/d           44,600            16,400
                      54,500   44,333   26,500                      54,500   44,333   26,500
                      Balance Sheet of Singh & Gupta
        Liabilities            Rs.                 Assets              Rs.
Sundry Creditors                   Machinery (45,000 – 4,500)       40,500
  (20,000 – 500)            19,500 Patents (8,000 + 2,000)          10,000
Khan’s Loan A/c             25,000 Stock                            25,000
Capital Accounts:                  Sundry Debtors        20,000
  Singh 44,600                     Less: Prov.             1,000    19,000
  Gupta 16,400              61,000 Cash                             11,000


                           1,05,500                                1,05,500
39. Sol.                      Revaluation A/c
           Particulars              Rs.              Particulars              Rs.
To Furniture                      1,150 By Building (75,000 – 5,0000)      25,000
To Stock (12,500 – 10,000)        2,500 By Provision for D/D
To Capital A/cs – Profits                 (1,500 – 15,000 × 5%)              750
  X = 24,000 × 3/6 = 12,000             By Office Equipment (Typewriter)
  Y = 24,000 × 2/6 = 8,000                (2,000 – 2,000 × 10% × 6/12)      1,900
  Z = 24,000 × 1/6 = 4,000       24,000
                                 27,650                                    27,650
                                    Partner’s Capital A/c
   Particulars        X         Y        Z           Particulars           X        Y         Z
To Y A/c             3,000              3,000 By Bal. b/d               40,000    21,000    20,000
Y’s Loan A/c                  41,000          By Gen. Reserve            9,000     6,000     3,000
To Bal. c/d         58,000             24,000 By Rev. Profits           12,000     8,000     4,000
                                              By X’s A/c                           3,000
                                              By Z’s A/c                           3,000
                    61,000    41,000   27,000                           61,000    41,000    27,000


 Y’s share of g/w = Rs.18,000 × 2/6 = Rs.6,000
 X’s gaining ratio = 2/3 – 3/6 = 1/6, Premium for G/w borne by X = 6,000 × 1/6 = Rs.3,000
 Z’s gaining ratio = 1/3 – 1/6 = 1/6, Premium for G/w borne by Z = 6,000 × 1/6 = Rs.3,000
                      New Balance Sheet
        Liabilities       Rs.                Assets                   Rs.
Sundry Creditors       11,000 Building                             75,000
Y’s Loan A/c           41,000 Furniture (12,000 – 1,150)           10,850
Capital A/cs                  Office Equipment (14,000 + 1,900)    15,900
  X        58,000             Stock                                10,000
  Z        24,000      82,000 Debtors                 15,000
                              Less Provision for D/D     750       14,250
                              Cash at Bank                          8,000
                      1,34,000                                    1,34,000
40. Sol.                  Revaluation A/c
           Particulars         Rs.             Particulars              Rs.
To Plant (30,000 × 10%)      3,000 By Expenses Owing (2,000 – 1,500)     500
                                   By Patents (4,000 – 3,000)          1,000
                                   By Capital A/cs – Loss
                                     Manoj = 1,500 × 1/2 = 750
                                     Naveen = 1,500 × 1/3 = 500
                                     Deepak = 1,500 × 1/6 = 250        1,500
                             3,000                                     3,000
                                    Partner’s Capital A/c
   Particulars       Manoj Naveen Deepak                   Particulars   Manoj Naveen Deepak
To Rev. – Loss          750        500       250 By Bal. b/d             12,000   10,000    9,000
To Naveen A/c         1,200                2,800 By Gen. Reserve          3,000    2,000    1,000
To Naveen’s Loan                15,500           By Manoj’s A/c                    1,200
To Bal. c/d          1,5000               10,000 By Deepak A/c                     2,800
                                                 By Cash A/c              1,950             3,050
                     16,950     16,000    13,050                         16,950   16,000   13,050



Naveen’s share of g/w = Rs.12,000 × 1/3 = Rs.4,000
Manoj’s gaining ratio = 3/5 – 3/6 = (18 - 15)/30 = 3/30,
Premium for G/w = 4,000 × 3/10 = Rs.1,200
Deepak’s gaining ratio 2/5 – 1/6 = (12 - 5) / 30 = 7/30,
Premium for G/w = 4,000 × 7/10 = Rs.2,100`
                      New Balance Sheet
        Liabilities      Rs.                Assets           Rs.
Capital A/cs                 Plant (30,000 – 3,000)       27,000
 Manoj 15,000                Patents                       4,000
 Deepak 10,000        25,000 Stock                        11,000
Naveen’s Loan A/c     15,500 Debtors                       9,500
Creditors             10,000 Cash (500 + 1,950 + 3,050)    5,500
Bills Payable          5,000
Expenses Owing         1,500
                      57,000                              57,000
41. Sol.                  Profit & Loss Adjustment A/c
            Particulars               Rs.              Particulars    Rs.
To Stock (4,000 × 6%)                 240 By Factory Buildings
To Prov. for D/D (2,500 × 5% - 50)     75 (12,500 × 2,500)           2,500
To Reserve for Legal Charges          385
To Capital A/cs – Profits
  A = 1,800 × 4/9 = 800
  B = 1,800 × 3/9 = 600
 C = 1,800 × 2/9 = 400               1,800
                                     2,500                           2,500
                               Partner’s Capital A/c
   Particulars     A       B        C         Particulars     A      B       C
To B’s A/c        1,200              600 By Bal. b/d        10,000   7,500   5,000
ToB’s Loan A/c            9,900          By A’s A/c                  1,200
To Bank A/c         267              133 By C’s A/c                    600
To Bal. c/d       9,333            4,667 By Rev. Profits      800      600    400
                 10,800   9,900    5,400                    10,800   9,900   5,400
                            New Balance Sheet
         Liabilities            Rs.                  Assets                   Rs.
Bills Payable                2,450    Bank       (2,750 – 267 – 133)        2,350
Sundry Creditors             1,000    Debtors                 2,500
B’s Loan A/c                 9,900    Less: Provision            125        2,375
Reserve for Legal Charges      385    Stock             (4,000 – 240)       3,760
Capital A/cs –                        Plant & Machinery                     4,250
  A        9,333                      Factory Buildings (12,500 + 2,500)   15,000
 C         4,667            14,000
                            27,735                                         27,735

Working Notes
Old Ratio of A, B & C       =4:3:2
New Ratio of A & C          =4:2                  =2:1
Gaining Ratio of A & C                            =2:1
B’s Share of g/w            = Rs.5,400 × 3/9      = Rs.1,800
A’s Capital                 = Rs.14,000 × 2/3     = Rs.9,333
And, C’s Capital            = Rs.14,000 × 1/3     = Rs.4,667
42. Sol.                     Revaluation A/c
           Particulars             Rs.             Particulars    Rs.
To Provision for D/D                   By Unexpired Insurance    1,000
   (10,000 × 5% - 200)             300 By Land Buildings
To Machinery (24,000 × 5%)       1,200    (50,000 × 10%)         5,000
To O/s Repair Bills              1,500
To Capital A/cs – Profits
 A = 3,000 × 3/6 = 1,500
 B = 3,000 × 2/6 = 1,000
 C = 3,000 × 1/6 = 500           3,000
                                 6,000                           6,000
                                 Partner’s Capital A/c
   Particulars      A        B        C         Particulars     A        B        C
To B’s A/c         4,500             1,500 By Balance b/d     45,000   30,000   15,000
To Bank A/c                 5,000          By A’s A/c                   4,500
To B’s Loan A/c            32,000          By C’s A/c                   1,500
To Balance c/d    45,000            15,000 By Rev. Profits     1,500    1,000      500
                                           By Bank A/c         3,000             1,000
                  49,500   37,000   16,500                    49,500   37,000   16,500
                                Balance Sheet of A & C
           Liabilities                  Rs.                Assets                           Rs.
 Creditors                          10,800 Bank
 O/S Repairs Bills                   1,500 (8,000 + 3,000 + 1,000 – 5,000)                7,000
 Capitals Accounts:                 32,000 Debtors                  10,000
   A        45,000                         Less: Provision             500                9,500
   B        15,000                  60,000 Stock                                          9,000
                                           Machinery       (24,000 – 1,200)              22,800
                                           Land & Buildings (50,000 + 5,000)             55,000
                                           Unexpired Insurance                            1,000
                                  1,04,300                                           1,04,300


Working Notes : -                                   Total Capital = 60,000
A’s gaining ratio = 3/4 – 1/2 = (3 – 2)/4 = ¼ = 3/12 A’s Share = 60,000 × 3/4 = 45,000
C’s gaining ratio = 1/4 – 1/6 = (3 - 2)/12 = 1/12   B’s Share = 60,000 × 1/4 = 15,000
G.R. = 3 : 1
43. Sol.                        Revaluation A/c
            Particulars                Rs.             Particulars      Rs.
To Stock (32,000 × 6%)               1,920 By Buildings
To Provision for D/D                         (1,00,000 × 20%)        20,000
   (20,000 × 5% - 400)                 600
To O/s Legal Charges                 3,080
To Capital Accounts - Profits
  A = 14,400 × 4/9 = 6,400
  B = 14,400 × 3/9 = 4,800
  C = 14,400 × 2/9 = 3,200          14,400
                                    20,000                           20,000


Note: Capital Ratio = 80,000 : 60,000 : 40,000 = 4 : 3 : 2
                                 Partner’s Capital A/c
   Particulars      A        B        C         Particulars     A        B        C
To B’s A/c         7,800             6,600 By Balance b/d     80,000   60,000   40,000
To B’s Loan A/c            79,200          By A’s A/c                   7,800
To Bank A/c        8,600                   By C’s A/c                   6,600
To Balance c/d    70,000            42,000 By Rev. Profits     6,400    4,800    3,200
                                           By Bank A/c                           5,400
                  86,400   79,200   48,600                    86,400   79,200   48,600



Note: B’s share of g/w Rs.43,200 × 1/3 = Rs.14,400 debited to A & C in 13
: 11 i.e. G.R.
                      Balance Sheet of A & C
        Liabilities        Rs.                  Assets               Rs.
Creditors                27,600 Cash (22,000 + 5,400 – 8,600)     18,800
O/s Legal Charges         3,080 Debtors               20,000
B’s Loan A/c             79,200 Less: Provision         1,000      19,000
Capital A/cs                    Stock         (32,000 – 1,920)     30,080
  A        70,000               Machinery                          34,000
 C         42,000      1,12,000 Buildings (1,00,000 + 20,000)    1,20,000
                       2,21,880                                  2,21,880
44. Sol.                     Revaluation A/c
           Particulars             Rs.             Particulars     Rs.
To Machinery (3,000 × 10%)       3,000 By Freehold Premises
To Furniture (12,000 × 7%)         840   (40,000 × 20%)          8,000
To Provision for D/D                   By Stock (22,000 × 15%)   3,300
   (1,500 – 1,000)                 500
To Capital A/cs – Profits
  X = 6,960 × 3/6 = 3,480
  Y = 6,960 × 1/6 = 1,160
  Z = 6,960 × 2/6 = 2,320        6,960
                                 11,300                          11,300
                                    Partner’s Capital A/c
   Particulars         X        Y        Z          Particulars          X          Y      Z
To Z’s A/c                                    By Bal. b/d              30,000   20,000   28,000
  (7,000 in 3 : 1)    5,250    1,750          By Gen. Reserve           6,000    2,000    4,000
Z’s Loan A/c                           41,320 By Rev. Profits           3,480    1,160    2,320
To Current A/c                 7,500          By X’s & Y’s A/c
To Bal. c/d          41,730   13,910           (21,000 × 2)                               7,000
                                              By Current A/c            7,500
                     46,980   23,160   41,320                          46,980   23,160   41,320


Total capital of X & Y after adjustments = (X = 34,230) + (Y = 21,410) = Rs.55,640
X’s capital = 55,640 × 3/4 = Rs.41,730 and Y’s capital = 55,640 × 1/4 = Rs.13,910
                      New Balance Sheet
        Liabilities       Rs.                 Assets                   Rs.
Bills Payable          12,000 Freehold Premises (40,000 + 8,000)    48,000
Sundry Creditors       28,000 Machinery (30,000 – 3,000)            27,000
Z’s Loan A/c           41,320 Furniture (12,000 – 840)              11,160
Y’s Current A/c         7,500 Stock (22,000 + 3,300)                25,300
Capital Accounts              Sundry Debtors        20,000
  X        41,730             Less Prov. For D/D     1,500          18,500
  Y        13,910      55,640 Cash                                   7,000
                              X’s Current A/c                        7,500
                      1,44,460                                     1,44,460
46. Sol.                        Revaluation A/c
            Particulars               Rs.                Particulars    Rs.
To Stock (18,000 × 10%)             1,800 By Creditors                 6,000
To Furniture (30,000 × 5%)          1,500
To Provision for D/D                1,000
To O/S Damage Charges               1,100
To Capital Accounts – Profits
  A = 600 × 3/6 = 300
  B = 600 × 2/6 = 200
  C = 600 × 1/6 = 100                 600
                                    6,000                              6,000
                                    Partner’s Capital A/c
   Particulars         A        B        C           Particulars           A         B          C
To Goodwill          5,000     3,333    1,667   By Balance b/d           40,000   40,000    30,000
To B’s A/c           5,500              1,833   By A’s A/c                         5,500
To Cash (Bal.)                48,200    2,450   By C’s A/c                         1,833
To Bal. c/d         78,450             26,150   By Gen. Reserve           6,000    4,000        2,000
                                                By Rev – Profits            300      200          100
                                                By Cash A/c (Bal.)       42,650


                    88,950    51,533   32,100                            88,950   51,533    32,100

Balance of capitals after adjustments = (A = 35,800) + (B = 48,200) + (C = 28,600) = 1,12,600
Total capital of A & C = 1,12,600 + 10,000 – 18,000 = Rs.1,04,600
A’s Capital = 1,04,600 × 3/4 = 78,450 and C’s capital = 1,04,600 × 1/4 = 26,150
                             Balance Sheet of A & C
         Liabilities               Rs.                 Assets               Rs.
Creditors (30,000 – 6,000)      24,000 Cash in hand                      10,000
Bills Payable                   16,000 Debtors               25,000
O/s Damage Charges               1,100 Less: Prov. For D/D 4,000         21,000
Capital A/cs:                          Stock         (18,000 – 1,800)    16,200
  A        78,450                      Furniture    (30,000 – 1,500)     28,500
  C        26,150             1,02,600 Machinery                         70,000
                              1,45,700                                  1,45,700
47. Sol.                               Journal Entries
 Date                                Particulars                    Dr.     Cr.
           Reserve A/c                                      Dr.   3,000
                     To P’s Capital A/c (3,000 × 5/10)                    1,500
                     To Q’s Capital A/c (3,000 × 3/10)                      900
                     To R’s Capital A/c (3,000 × 2/10)                      600
           J.L.P. A/c                                       Dr.   4,000
                        To P’s Capital A/c (4,000 × 5/10)                 2,000
                        To Q’s Capital A/c (4,000 × 3/10)                 1,200
                        To R’s Capital A/c (4,000 × 2/10)                   800
           P’s Capital A/c (4,500 × 1/3)                    Dr.   1,500
           R’s Capital A/c (4,500 × 2/3)                    Dr.   3,000
                       To Q’s Capital A/c                                 4,500
                       (share of g/w = 15,000 × 3/10)
           P’s G.R. = 3/5 – 5/10 = (6 - 5)/10 = 1/10
           R’s G.R. = 2/5 – 2/10 = (4 – 2)/10 = 2/10
Date                            Particulars                   Dr.      Cr.
       P’s Capital A/c (4,000 × 3/5)                 Dr.    2,400
       R’s Capital A/c (4,000 × 2/5)                 Dr.    1,600
                   To J.L.P. Account                                 4,000
       Fixed Assets A/c                              Dr.    5,000
                 To Revaluation A/c                                  5,000
       Revaluation A/c                               Dr.    1,000
                 To Stock A/c                                        1,000
       Revaluation A/c                               Dr.    4,000
                 To P’s Capital A/c (4,000 × 5/10)                   2,000
                 To Q’s Capital A/c (4,000 × 3/10)                   1,200
                 To R’s Capital A/c (4,000 × 2/10)                     800
       Q’s Capital A/c                               Dr.   17,800
                  To Bank A/c                                       17,800
       Bank A/c                                      Dr.   17,800
                  To P’s Capital A/c                                 5,400
                  To R’s Capital A/c                                12,400
                                    Partner’s Capital A/c
   Particulars         P        Q        R           Particulars           P          Q      R
To Q’s A/c           1,500              3,000 By Bal. b/d                20,000   10,000    8,000
To J.L.P A/c         2,400              1,600 By Reserve                  1,500      900      600
To Bank A/ c                  17,800          By P’s A/c                           1,500
To Bal. c/d         27,000             18,000 By R’s A/c                           3,000
                                              By J.L.P                    2,000    1,200      800
                                              By Rev. Profits             2,000    1,200      800
                                              By Bank A/c                 5,400            12,400
                    30,900    17,800   22,600                            30,900   17,800   22,600


Total Capital of P, Q and R = (P = 21,600) + (Q = 17,800) + (R = 5,600) = Rs.45,000
P’s New capital = Rs.45,000 × 3/5 = Rs.27,000
R’s New Capital = Rs.45,000 × 2/5 = Rs.18,000
                      Balance Sheet of P & R
        Liabilities        Rs.                 Assets                 Rs.
Sundry Creditors         5,300 Fixed Assets                        30,000
Expenses o/s               700 Stock                               10,000
Capital A/cs                   Book Debts                           9,000
  P        27,000              Bank
  R        18,000       45,000 (2,000 + 5,400 + 12,400 – 17,800)    2,000
                        51,000                                     51,000
47. Sol.                     Revaluation A/c
           Particulars               Rs.            Particulars             Rs.
To Machinery (17,00,000 × 20%)   3,40,000 By Land & Building
To Stock (5,00,000 – 4,50,000)     50,000   (1,00,000 × 30%)            3,00,000
To Provision for D/D               30,000 By Sundry Creditors             50,000
   (6,00,000 × 5%)                        By Capital Accounts – loss
                                            X = 70,000 × 2/7 = 20,000
                                            Y = 70,000 × 3/7 = 30,000
                                            Z = 70,000 × 2/7 = 20,000    70,000
                                 4,20,000                               4,20,000
                                         Partner’s Capital A/c
   Particulars           X           Y           Z            Particulars           X           Y           Z
To Rev. A/c Loss        20,000      30,000      20,000    By Balance b/d         10,00,000   15,00,000   10,00,000
To Y’s A/c                                                By Joint Life Policy    1,00,000    1,50,000    1,00,000
(2,70,000 in 1 : 4)    1,98,000                 72,000    By X’s & Z’s A/c
To Bank A/c                        9,45,000               G/w = 6,30,000 × 3/7                2,70,000
To Y’s Loan A/c                    9,45,000               By Bank A/c            12,18,000                3,92,000
To Bal. c/d           21,00,000               14,00,000
                      23,18,000   19,20,000   14,92,000                          23,18,000   19,20,000   14,92,000


  X’s GR = 3/5 – 2/7 (21 – 10)/35 = 11/35 and Z’s GR = 2/5 – 2/7 = (14-10)/35 = 4/35
  Total capital of X, Y & Z before adjustments = Rs.3,50,000
  X’s capital = 35,00,000 × 3/5 = Rs.21,00,000 and Y’s capital = 35,00,000 × 1/4 = Rs.14,00,000
                              Bank A/c
            Particulars         Rs.            Particulars        Rs.
To Balance c/d              2,00,000 By Y’s Capital A/c       9,45,000
To X’s Capital A/c         12,18,000 By Bal. c/d             12,15,000
To Z’s Capital A/c          3,92,000
To Joint Life Policy A/c    3,50,000
                           21,60,000                         21,60,000
                          New Balance Sheet
            Liabilities          Rs.              Assets                   Rs.
Capital Accounts                      Land and Building
   X       21,00,000                    (10,00,000 + 3,00,000)        13,00,000
   Z       14,00,000        35,00,000 Machinery (1,70,000 – 3,40,000) 13,60,000
Y’s Loan A/c                 9,45,000 Stock                            4,50,000
Sundry Creditors                      Sundry Debtors        6,00,000
(5,00,000 – 50,000)          4,50,000 Less Provision          30,000   5,70,000
                                      Cash at Bank                    12,15,000
                            48,95,000                                 48,95,000

				
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