Q1.
On 31st march, 2016, the balance sheet of M/s
Ram, Rahul and Rohit sharing profits and losses in proportion of their capital,
stood as follows:
Rs.
Rs.
Rs.
Capital
Accounts:
Land
& Building
2,00,000
Ram
3,00,000
Machinery
2,00,000
Rahul
2,00,000
Closing
Stock
1,00,000
Rohit
1,00,000
6,00,000
Sundry
Debtors
2,00,000
Sundry
creditors
2,00,000
Cash
and Bank Balances
1,00,000
8,00,000
8,00,000
On 31st march,2016, Ram desired to retire from
the firm and the remaining partners decided to carryon. It was agreed to
revalue the assets and liabiities on that date on the following basis:-
1. Land
and buildings be appreciated by 30%.
2. Machinery
be depreciated by 20%.
3. Closing
stock to be valued at Rs.80,000.
4. Provision
for Bad debts be made at 5%.
5. Old
credit balances of sundry creditors Rs.10,000 be written back.
6. Joint
life policy of the partners surrendered and cash obtained Rs.60,000.
7. Goodwill
of the entire firm be valued at Rs.1,80,000 and Ram’s share of the goodwill be
adjusted in the accounts of Rahul and Rohit who share the future profits
equally. No goodwill will be raised.
8. The
total capital of the firm is to be the same as before retirement. Individual
capital be in their profit sharing ratio.
9. Amount
due to ram is to be settled on the following basis;- 50% on retirement and the balance 50%
within one year. Prepare revaluation account, capital
account of partners: Rahul & Rohit,
loan account of Ram, Cash account and balance sheet as on 1.4.2016 of M/s Rahul and Rohit.
see in detail
Q2.
A,B,C were in partnership sharing profits and losses in
the ratio of 3:2:1. The balance sheet of the firm on 31.2.2016 was as under:
Liabilities
Rs.
Assets
Rs.
Capital
Accounts:
Goodwill
40,000
A
1,50,000
Fixtures
30,000
B
Stock
1,70,000
C
50,000
3,00,000
Sundry
debtors
90,000
Sundry
Creditors
40,000
Cash
10,000
3,40,000
3,40,000
A, on account of ill-health, gave notice that he wished
to retire from the firm. A retirement was, therefore, entered as on 31.3.2016,
the terms of which were as follows:
(a) The
profit and loss account for the year ended 31.3.2016,which showed a net profit
of Rs.42,000 was to be re-opened. B was to be credited with Rs.6,000 as bonus,
in consideration of the extra work, which had devolved upon him during the
year. The profit sharing basis was to be revised and the revised ratio is to be
2:3:1 as and from 1st April 2015.
(b) Goodwill
was to be valued at two years purchase of the average profits of five years.
Profits for these five years ending on 31st march were as under: Rs.
31.3.2012
15,000
31.3.2013
23,000
31.3.2014
25,000
31.3.2015
35,000
31.3.2016
42,000
(c) Fixtures
are to be valued at Rs.39,800 and a provision of 2% was to be made for doubtful
debts and the remaining assets were to be taken at their book value
(d) That
the amount payable to A shall be paid by B.
B and C agreed , as between themselves,
to continue the business, sharing profits and losses in the ratio of 3:1 and
decided to eliminate goodwill from balance sheet, to retain fixtures in the books at the revised value and increase
the provision for doubtful debts to 6%. Total capital of the firm will be Rs.3
Lakhs as before to be maintained in the new ratio as between B and C.
You are required to give the necessary
entries to give effect of the above arrangements. Prepare capital accounts of
partners, cash account and balance sheet of B and C after giving effect to the
above arrangements on the retirement of A.
see in detail
Q3. The balance Sheet
of Anil, Swanand and Ashok who were sharing profits in proportion to their
capital stood as follows on 31st March, 2013.
Balance Sheet as on
31/03/2013
Liabilities
(Rs.)
Assets
(Rs.)
Sundry Creditors
7,000
Cash at Bank
15,000
Bills payable
8,000
Sundry
Debtors 10,000
General Reserve
10,000
(-) Res for bad
debt 200
9,800
Capital Accounts
Stock
25,000
Anil
30,000
Plant &
Machinery
15,200
Swanand
15,000
Land &
Building
20,000
Ashok
15,000
85,000
85,000
Ashok retired on
the above date and the following was agreed upon.
1. That the provision for bad debts be brought up to 5% on Debtors.
2. The Land and Building be appreciated by 25%.
3. A provision of Rs.500 be made in respect of outstanding legal charges.
4. The goodwill of the entire firm be fixed at Rs. 10,800 and Ashok’s share
of it be adjusted into the accounts of Anil and Swanand who are going to share
future profits in the ratio 5:3.
Prepare: (1) Profit
& Loss Adjustment Account. (2).
Partners Capital Account. (3). Balance Sheet of Anil and Swanand.
see in detail
Q4. Laxmi,
Bharati and Gauri were partners sharing profits and losses in the proportion
5:3:2 Their Balance Sheet was as follows on 31st December, 2012.
Liabilities
(Rs.)
Assets
(Rs.)
Capital
Laxmi
Bharati
Gauri
Reserve
Fund
Creditors
Bank
Loan
O/s.
Expenses
20,000
18,000
9,000
5,000
2,000
5,000
1,000
Premises
Loose
Tools
Furniture
Stock
Debtors
Motor
Cycle
Cash
25,000
2,000
4,000
8,000
8,000
7,000
6,000
60,000
60,000
Gauri
retires from the partnership on 1st April, 2013. The following terms
were agreed for retirement.
The
retiring partner to be given her share in business profits from the date of 1st
Balance Sheet to the date of retirement on the basis of average profit for the
last 3 years and Gauri’s share in goodwill is to be calculated on the basis of
two times the average profit for the preceding three years. The profit were
2010: Rs. 7,000, 2011 Rs. 13,000 2012 her capital Rs. 4,000. Gauri is to get Rs.
3,840 on the date of retirement and the balance of A/c kept in the business as
his loan.
The
assets and liabilities were revalued at: Premises to be depreciated by Rs. 1,000,
Value of Motor Cycle be raised to Rs. 8,000, Reserve for bad and doubtful debts
be created at 10% on debtors. Creditors to be valued at Rs. 1,800.
You are required to give: Working of the Share of Profit and Share of
Goodwill of Gauri, Gauri’s Capital’s A/c and Profit and Loss Adjustment A/c.
see in detail
Q5. The
Balance Sheet of Bhavini, Shalini and Varsha, who shared profit and losses in
the ratio of 2/5, 3/10, and 3/10 respectively was as follows.
Balance
Sheet As on 31st December, 2010
Liabilities
(Rs.)
Assets
(Rs.)
Sundry
Creditors
Reserve
Fund
Capital
A/c
Bhavini
Subhashri
Varsha
12,000
6,250
20,000
15,000
12,250
Cash
at Bank
Sundry
Debtors 5,000
Less:
R. D. D. 500
Stock
Motor
Vans
Machinery
Building
4,500
4,500
12,500
4,000
17,500
22,500
65,500
65,500
Shalini
retires on 1-1-2011 on the following terms.
The
share of Shalini in goodwill of the firm is valued at Rs. 2,700.
Machinery
to be depreciated by 10% and motor vans by 12.5%.
Stock
to be appreciated by 10% and building by 20%.
A
provision of Rs. 2,000 to be made for a claim of compensation.
R.
D. D. is no longer necessary.
Bhavini
and Varsha will share the future profits in ratio of 1:2 in which the goodwill
should be written off.
The amount payable to Shalini should be
transferred to her Loan A/c after paying her a sum of Rs. 2,500 as a part
payment.
Prepare: Profit and loss Adjustment A/c and Capital A/c of Partners.
see in detail
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