Page 123 - ISCDEBK-12

Death of a Partner 5.21
Solution: JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)

2019
Aug. 1 Karun’s Capital A/c ...Dr. 12,500
Som’s Capital A/c ...Dr. 7,500
Mehar’s Capital A/c ...Dr. 5,000
To Goodwill A/c 25,000
(Being the existing goodwill written off)
Karun’s Capital A/c (` 35,000 × 5/8) ...Dr. 21,875
Som’s Capital A/c (` 35,000 × 3/8) ...Dr. 13,125
To Mehar’s Capital A/c (` 1,75,000 × 2/10) 35,000
(Being the Mehar’s share of goodwill adjusted)
Mehar’s Capital A/c ...Dr. 5,000
To Profit and Loss Suspense A/c 5,000
(Being the Mehar’s share of loss till date of death recorded)
Investment Fluctuation Reserve A/c ...Dr. 17,500
To Karun’s Capital A/c 8,750
To Som’s Capital A/c 5,250
To Mehar’s Capital A/c 3,500
(Being the transfer of Investment Fluctuation Reserve)
Workmen Compensation Reserve A/c ...Dr. 17,500
To Workmen Compensation Claim A/c 10,000
To Karun’s Capital A/c 3,750
To Som’s Capital A/c 2,250
To Mehar’s Capital A/c 1,500
(Being the transfer of Workmen Compensation Reserve)
Karun’s Capital A/c ...Dr. 2,500
Som’s Capital A/c ...Dr. 1,500
Mehar’s Capital A/c ...Dr. 1,000
To Advertisement Expenditure A/c 5,000
(Being the transfer of Advertisement Expenditure)
Karun’s Capital A/c ...Dr. 1,87,500
Som’s Capital A/c ...Dr. 1,12,500
Mehar’s Capital A/c ...Dr. 75,000
To Profit and Loss A/c 3,75,000
(Being the transfer of Accumulated Loss)
Bank A/c ...Dr. 21,000
To Investment A/c 15,000
To Revaluation A/c 6,000
(Being the investment sold)
Patents A/c ...Dr. 70,000
Machinery A/c ...Dr. 19,000
Unexpired Insurance A/c ...Dr. 5,000
Trade Creditors A/c ...Dr. 1,100
To Revaluation A/c 95,100
(Being the increase in assets and decrease in liabilities recorded)
Revaluation A/c ...Dr. 26,100
To Stock A/c 20,000
To Provision for Outstanding Legal Charges A/c 5,000
To Provision for Doubtful Debts A/c 1,100
(Being the decrease in assets and increase in liabilities recorded)