Practical Problem 03
Practical Problems | Q 3 | Page 185
Balance Sheet as on 31st March 2019 | |||||
Liabilities | Amt | Amt | Assets | Amt | Amt |
Creditors | 8,000 | Bank | 5,000 | ||
Bills Payable | 2,000 | Debtors | 20,000 | ||
General Reserve | 5,000 | Less : R.D.D | 1,000 | 19,000 | |
Capital Account: | Furniture | 15,000 | |||
Anu | 40,000 | Machinery | 4,000 | ||
Renu | 30,000 | Free hold Property | 27,000 | ||
Dinu | 15,000 | Goodwill | 30,000 | ||
1,00,000 | 1,00,000 | ||||
Dinu retires from the firms on 1st April 2019 on the following terms. | |||||
1. The assets are to be revalued as freehold property Rs 30,000, Machinery Rs 5000, Furniture Rs 12000, All debtors are good | |||||
2. Goodwill of the firm be valued at thrice the average profit for preceding five years. | |||||
Profits of the firm for the year. | |||||
2014-15 – Rs 1,000, 2015-16 – Rs 10,500 2016-17 – Rs 10,000, | |||||
2017-18 – Rs 16,000 2018-19 – Rs 10,000 | |||||
3. Dinu should be paid Rs 3,000 by cheque | |||||
4. The Balance of Dinu’s capital A/c should be kept in the business as loan. | |||||
Prepare: Profit and loss adjustment A/c, Capital Accounts of partners, Balance Sheet of the new firm. | |||||
IN THE BOOKS OF Partnership Firm | |||||
Dr Profit and Loss Adjustment Account Cr | |||||
Particular | Amt | Amt | Particular | Amt | Amt |
To Furniture A/c | 3,000 | By Free hold Property | 3,000 | ||
To Goodwill A/c | 1,500 | By Machinery | 1,000 | ||
To Partners Capital A/c (Profit) | By R.D.D A/c | 1,000 | |||
Anu | 200 | ||||
Renu | 200 | ||||
Dinu | 100 | 500 | |||
5,000 | 5,000 | ||||
Dr Partners Capital A/c Cr | |||||||
Particular | Anu | Renu | Dinu | Particular | Anu | Renu | Dinu |
To Bank A/c | 3,000 | By Balance b/d | 40,000 | 30,000 | 15,000 | ||
To Loan A/c | 13,100 | By Gen Res A/c | 2,000 | 2,000 | 1,000 | ||
To Balance c/d | 42,200 | 32,200 | By P & L Adj A/c (Profit) | 200 | 200 | 100 | |
42,200 | 32,200 | 16,100 | 42,200 | 32,200 | 16,100 | ||
Balance sheet of New Firm as on 1st April 2019 | |||||
Liabilities | Amt | Amt | Asset | Amt | Amt |
Capital A/c | Furniture | 15,000 | |||
Anu | 42,200 | Less : Depreciate | -3,000 | 12,000 | |
Renu | 32,200 | 74,400 | Machinery | 4,000 | |
Creditors | 8,000 | Add : Appreciation | 1,000 | 5,000 | |
Bills Payable | 2,000 | Free hold Property | 27,000 | ||
Dinu Loan A/c | 13,100 | Add : Appreciation | 3,000 | 30,000 | |
Goodwill | 30,000 | ||||
Less : Written off | -1,500 | 28,500 | |||
Debtors | 20,000 | ||||
Bank | 2,000 | ||||
97,500 | 97,500 | ||||