Page 155 - DEBKVOL-1

6.22 Double Entry Book Keeping—CBSE XII

BALANCE SHEET as at 1st April, 2018
Liabilities ` Assets `
Creditors 1,08,000 Cash at Bank 28,000
Provision for Outstanding Repairs 15,000 Debtors 1,00,000
Warranty Claim 12,000 Less: Provision for Doubtful Debts 5,000 95,000
B’s Loan 3,20,000 Stock 90,000
Capital A/cs: Computer 12,000
A 4,20,000 Machinery 2,40,000
C 1,40,000 5,60,000 Land and Building 5,00,000
Add: Appreciation 50,000 5,50,000
10,15,000 10,15,000

Unsolved Questions

1. A, B and C are partners in a firm sharing profits in the ratio of 5 : 3 : 2 respectively. B retires and his share is
taken up by A and C in the ratio of 2 : 1. Then immediately, D is admitted for 25% share of profits, half of which
was gifted by A and remaining share was taken by D equally from A and C. Calculate new profit-sharing
ratio after D ’s admission. [Ans.: New Ratio—41 : 19 : 20.]
2. A, B and C are partners sharing profits in the ratio of 4 : 3 : 2. B retires and goodwill of the firm is valued at
` 10,800. No goodwill appears as yet in the books of the firm. A and C decide to share future profits in the
ratio of 5 : 3. Pass Journal entries. [Ans.: Dr. A’s Capital A/c by ` 1,950 and
C’s Capital A/c by ` 1,650; Cr. B’s Capital A/c by ` 3,600.]
3. Ravi, Mukesh, Naresh and Yogesh are partners in a firm sharing profits in the ratio of 2 : 2 : 1 : 1. On Mukesh’s
retirement, the goodwill of the firm is valued at ` 90,000. Ravi, Naresh and Yogesh decided to share the
future profits equally. Pass necessary Journal entry for the treatment of goodwill. No goodwill is to be
shown in the books of the firm. (AI 1999)
[Ans.: Dr. Naresh and Yogesh by ` 15,000 each;
Cr. Mukesh by ` 30,000; Gaining Ratio 1 : 1.]
[Hint: Gaining Ratio, i.e., Ravi = 1/3 – 2/6 = 0; Naresh = 1/3 – 1/6 = 1/6; Yogesh = 1/3 – 1/6 = 1/6. Hence,
Naresh and Yogesh gain in the ratio of 1 : 1.]
4. X, Y and Z were partners in a firm sharing profits in the ratio of 1/5 : 2/5 : 2/5. On 15th April, 2018, X retires
and the new profit-sharing ratio of Y and Z was 3 : 2. On X’s retirement the goodwill of the firm was valued
at ` 60,000. Calculate the gaining ratio and pass necessary Journal entry on X’s retirement for the treatment
of goodwill. [Ans.: Dr. Y’s Capital A/c and Cr. X’s Capital A/c by ` 12,000.]
[Hint: Only Y is gaining. He will be debited for the entire share of X in goodwill, i.e., 1/5 of ` 60,000 = ` 12,000.]
5. X, Y and Z are partners in a firm sharing profits and losses equally. The Balance Sheet of the firm as at
31st March, 2018 stood as follows:
Liabilities ` Assets `
Creditors 10,900 Cash in Hand and Cash at Bank 8,600
General Reserve 6,000 Debtors 20,000
Employees’ Provident Fund 2,000 Stock 10,000
Capital A/cs: Investments (At cost) 5,000
X 30,000 Freehold Property 40,000
Y 20,000 Trademarks 2,000
Z 20,000 70,000 Goodwill 3,300
88,900 88,900
Z retires on 1st April, 2018 subject to the following adjustments:
(a) Freehold Property be valued at ` 58,000.
(b) Investments be valued at ` 4,700 and Stock be valued at ` 9,400.