CBSE Class-12 Accountancy: Questions 203 - 203 of 209

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Question number: 203

» Accounting for Partnership Firms » Reconstitution and Dissolution » Retirement and Death of a Partner

Essay Question▾

Describe in Detail

Anil, Jatin and Ramesh were sharing profit in the ratio of 2: 1: 1. Their Balance Sheet as at 31.12. 2001 stood as follows: -

BALANCE SHEET AS ON 31.12. 2001

shows available balance of assets and liabilities as on 31.12. 2001

Liabilities

Rs.

Assets

Rs.

Creditors

24, 400

Cash

1, 00, 000

Bank Loan

10, 000

Debtors

20000

Profit and Loss A/c

18, 000

Less: Provision

1600

18, 400

Bills Payable

2, 000

Stock

10, 000

Anil’s Capital

50, 000

Land & Building

20, 000

Jatin’s Capital

40, 000

Investment

14, 000

Ramesh’s Capital

40, 000

Goodwill

22, 000

1, 84, 400

1, 84, 400

Ramesh died on 31st March 2002. The following adjustments were agreed upon-

(a) Building be appreciated by Rs. 2, 000

(b) Investments be valued at 10 % less than the book value.

(c) All debtors (except 20 % which are considered as doubtful) were good.

(d) Stock be increased by 10 %

(e) Goodwill be valued at 2 years’ purchase of the average profit of the past five years.

(f) Ramesh’s share of profit to the death be calculated on the basis of the profit of the preceding year. profit for the years 1997, 1998, 1999 and 2000 were Rs. 26, 000, Rs. 22, 000, Rs. 20, 000 and Rs. 24, 000 respectively.

Prepare revaluation account, partner’s capital Account, Ramesh ‘s Executors’ Account and Balance sheet immediately after Ramesh’s death assuming that Rs. 18, 425 be paid immediately to his executors and balance to b left to the Ramesh’s Executor’s Account

Explanation

REVALUATION ACCOUNT of the firm

shows re-valuated assets and liabilities of the firm

Particulars

Rs.

Particulars

Rs.

To Investment A/c

1, 400

By Building A/c

2, 000

To Provision for doubtful debt A/c

2, 400

By Stock A/c

1, 000

By Loss transferred to

Anil’s Capital A/c

400

Jatin’s Capital… (273 more words) …

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