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M.284 An Aid to Accountancy—CBSE XII

(d) X takes over the Investments at an agreed value of ` 18,000.
(e) New Profit-sharing Ratio of partners will be 4 : 3 : 2.
(f ) Z will bring in ` 60,000 as his capital by cheque.
(g) Z is to pay an amount equal to his share in firm’s goodwill valued at twice the
average profit of the last three years which were ` 90,000; ` 78,000 and ` 75,000
respectively.
(h) Half of the amount of goodwill is to be withdrawn by X and Y.
Prepare Revaluation Account, Partners’ Capital and Current Accounts, and the Balance
Sheet of the new firm.
Or
A, B and C are partners sharing profits and losses in the ratio of 3 : 2 : 1. Balance
Sheet of the firm as at 31st March, 2018 stood as follows:

Liabilities ` Assets `
Creditors 21,000 Cash at Bank 5,750
Workmen Compensation Reserve 12,000 Debtors 40,000
Investment Fluctuation Reserve 6,000 Less: Provision for Doubtful Debts 2,000 38,000
Capital A/cs: Stock 30,000
A 68,000 Investment (Market Value ` 17,600) 15,000
B 32,000 Patents 10,000
C 21,000 1,21,000 Machinery 50,000
Advertisement Expenditure 5,250
Goodwill 6,000
1,60,000 1,60,000

C retired on 1st April, 2018 on the following terms:
(a) Goodwill of the firm is to be valued at ` 34,800.
(b) Value of Patents is to be reduced by 20% and that of Machinery to 90%.
(c) Provision for Doubtful Debts is to be created @ 6% on Debtors.
(d) C took over the Investment at market value.
(e) Liability for Workmen Compensation to the extent of ` 750 is to be created.
(f) A liability of ` 6,000 included in Creditors is not likely to be paid.
(g) Revaluation expenses paid by the firm ` 2,000.
(h) Amount due to C to be settled on the following basis:
` 5,067 to be paid immediately 50% of the balance within one year and the balance
by a Bill of Exchange (without interest) at 3 Months.
Give necessary Journal entries for the treatment of goodwill. Prepare Revaluation
Account, Partners’ Capital Accounts and the Balance Sheet of the new firm. (8)
17. Exe Ltd. issued for subscription 50,000 equity shares of ` 10 each at a premium of
` 2 per share, payable as follows:
On Application ` 3 per share;
On Allotment ` 5 per share, including premium;
On First Call ` 2 per share;
On Second and Final Call ` 2 per share.