(a) X, Y and Z were partners in a firm sharing profits and losses in the ratio of 3 : 3 : 4. On 31st March, 2022 their Balance Sheet was as follows : Balance Sheet of X, Y and Z as at 31st March, 2022
| Liabilities | Amount ₹ | Assets | Amount ₹ |
|---|---|---|---|
| Sundry Creditors | 34,000 | Bank | 1,74,000 |
| Bills Payable | 29,000 | Sundry Debtors | 2,00,000 |
| General Reserve | 2,00,000 | Bills Receivable | 26,000 |
| Capitals : X 3,00,000; Y 3,00,000; Z 4,00,000 | 10,00,000 | Stock | 1,50,000 |
| Furniture | 1,28,000 | ||
| Machinery | 2,00,000 | ||
| Land and Building | 3,85,000 | ||
| 12,63,000 | 12,63,000 |
On the above date, Z retired on the following terms :
- A provision of 3% on debtors will be created for bad and doubtful debts.
- Stock will be reduced by ₹ 5,000 and furniture by ₹ 2,000.
- Land and building will be brought up to ₹ 4,00,000 and machinery will be brought down to ₹ 1,80,000. Prepare Revaluation Account and Z's Capital Account, transferring the amount due to his loan account. OR
(b) Sonu, Monu and Ashu were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. On 31st March, 2022 their Balance Sheet was as follows : Balance Sheet of Sonu, Monu and Ashu as at 31st March, 2022
| Liabilities | Amount ₹ | Assets | Amount ₹ |
|---|---|---|---|
| Creditors | 35,000 | Bank | 22,000 |
| General Reserve | 25,000 | Stock | 25,000 |
| Debtors 20,000; Less : Provision for bad debts 2,000 | 18,000 | ||
| Capitals : Sonu 50,000; Monu 30,000; Ashu 20,000 | 1,00,000 | Furniture | 15,000 |
| Land and Building | 80,000 | ||
| 1,60,000 | 1,60,000 |
On the above date, the firm was dissolved on the following terms :
- Land and Building realised for ₹ 85,000, Furniture realised for ₹ 6,000 and Debtors realised full amount.
- Stock was taken over by Sonu at book value. There was an unrecorded asset which was taken over by Ashu for ₹ 3,000.
- Monu agreed to bear all realisation expenses. For his services Monu was paid ₹ 2,000. Actual expenses on realisation amounted to ₹ 2,200.
- Creditors were paid at 2% less. Prepare Realisation Account.
You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.
Start your 14-day free trial to unlock the full solution →(a) Z's retirement: Revaluation loss ₹18,000 (X 5,400, Y 5,400, Z 7,200); amount due to Z ₹4,72,800 to his Loan A/c.
(b) Dissolution: Realisation Account shows a loss of ₹300 (Sonu 150, Monu 90, Ashu 60).
Part (a)
On retirement, revaluation profit/loss is shared by all partners in the old ratio (3:3:4). The retiring partner is credited with reserves and the amount due is moved to his Loan Account.
Revaluation changes: Provision on debtors 3% × 2,00,000 = ₹6,000 (loss); Stock −₹5,000; Furniture −₹2,000; Land & Building 4,00,000 − 3,85,000 = +₹15,000 (gain); Machinery 2,00,000 − 1,80,000 = −₹20,000 (loss).
Net loss = (6,000 + 5,000 + 2,000 + 20,000) − 15,000 = ₹18,000 ⇒ X 5,400, Y 5,400, Z 7,200.
| Revaluation Account | Amount (₹) | Amount (₹) | |
|---|---|---|---|
| To Provision for Doubtful Debts | 6,000 | By Land and Building | 15,000 |
| To Stock | 5,000 | By Loss (X 5,400; Y 5,400; Z 7,200) | 18,000 |
| To Furniture | 2,000 | ||
| To Machinery | 20,000 | ||
| Total | 33,000 | Total | 33,000 |
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.