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P. 408

M.390                                                An Aid to Accountancy—CBSE XII

                                                      Answers



                                                          PART A
                       1.  Receipts and Payments Account records all receipts and payments whether they are
                          of Capital nature or Revenue nature or whether they relate to previous, current or
                          following accounting years.
                                                             Or
                          Balance of Receipts and Payments Account is cash in hand and/or at bank whereas
                          balance of Income and Expenditure Account is either surplus or deficit.
                       2.  Maximum partners allowed in a partnership firm are 50. It is provided in the Companies
                          Act, 2013.
                       3.  Reconstitution of a firm means change in existing agreement of partnership. As a
                          result, the existing agreement among partners comes to an end and a new agreement
                          comes into existence and the firm continues.
                       4.                                  JOURNAL
                     Date     Particulars                                          L.F.   Dr. (`)   Cr. (`)
                             P’s Capital A/c                                 ...Dr.       24,000
                             Q’s Capital A/c                                 ...Dr.       6,000
                               To  R’s Capital A/c                                                 30,000
                             (Being R’s share of goodwill adjusted to the Capital Accounts of
                             P and Q in their gaining ratio, i.e., 4 : 1)

                     Notes:  (i)  R’s Share of Goodwill = ` 90,000 × 1/3 = ` 30,000.
                           (ii)     Gain of Partner  =  New Share – Old Share
                                                                             -
                                                       -
                                                3  1  95   4          2  1  65    1
                                       P’s Gain  =   -  =  =  ;  Q’s Gain =   -  =  =
                                                5  3  15   15         5  3   15  15
                                 Thus, Gaining Ratio  =  4 : 1.
                       5.                                  JOURNAL
                     Date     Particulars                                          L.F.   Dr. (`)   Cr. (`)
                             Investment Fluctuation Reserve A/c              ...Dr.       40,000
                                To  Investment A/c                                                 10,000
                               To  X’s Capital A/c                                                 15,000
                               To  Y’s Capital A/c                                                  9,000
                               To  Z’s Capital A/c                                                  6,000
                             (Being the value of investment brought down to market value and surplus
                             IFR transferred  to Partners’ Capital Accounts in their old profit-sharing ratio)
                                                             Or
                                                           JOURNAL
                     Date     Particulars                                          L.F.   Dr. (`)   Cr. (`)
                             Workmen Compensation Reserve A/c                ...Dr.       60,000
                                To  Workmen Compensation Claim A/c                                 40,000
                               To  A’s Capital A/c                                                 10,000
                               To  B’s Capital A/c                                                  6,000
                               To  C’s Capital A/c                                                  4,000
                             (Being the liability of workmen compensation claim created and
                             surplus WCR transferred to partners in their old profit-sharing ratio)
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