(a) Vivek, Vishal, and Vimal are partners in a firm sharing Profits and Losses equally. Their Balance Sheet as on 31st March, 2018 is as follows :
| Liabilities | ₹ | ₹ | Assets | ₹ | ₹ |
|---|---|---|---|---|---|
| Capital accounts | Furniture | 60,000 | |||
| Vivek | 60,000 | Machinery | 1,20,000 | ||
| Vishal | 70,000 | Sundry debtors | 33,000 | ||
| Vimal | 70,000 | 2,00,000 | Less : Provision for doubtful debts | 3,000 | 30,000 |
| Bills Payable | 80,000 | Bills Receivable | 50,000 | ||
| Cash at Bank | 20,000 | ||||
| 2,80,000 | 2,80,000 |
Vimal retired on 31st March, 2019 subject to the following conditions :
- Machinery is valued at ₹ 1,50,000.
- Value of furniture brought down by ₹ 10,000.
- Provision for Doubtful debts should be increased to ₹ 5,000.
- Investment of ₹ 30,000 not recorded in the books is to be recorded now. Pass necessary journal entries and prepare Revaluation account. OR
(b) Poornima Ltd. issued 1,00,000 ordinary shares of ₹ 10 each, payable at ₹ 2 on application, ₹ 4 on allotment, ₹ 2 on First call and ₹ 2 on Final call. All the shares are subscribed and amount was duly received. Pass journal entries.
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Start your 14-day free trial to unlock the full solution →(a) Revaluation net profit ₹48,000 (gains 60,000 − losses 12,000), shared equally ₹16,000 each. (b) Issue of 1,00,000 shares of ₹10 — journal entries; capital ₹10,00,000.
(a) Retirement of Vimal — Vivek, Vishal, Vimal (equal) — TN HSC Class-12 Accountancy
Revaluation items: Machinery 1,20,000 → 1,50,000 (gain 30,000); Furniture down by 10,000 (loss 10,000); Provision for doubtful debts 3,000 → 5,000 (loss 2,000); Investment ₹30,000 unrecorded now recorded (gain 30,000).
Journal Entries:
| Particulars | Dr (₹) | Cr (₹) |
|---|---|---|
| Machinery A/c Dr | 30,000 | |
| To Revaluation A/c | 30,000 | |
| Investment A/c Dr | 30,000 | |
| To Revaluation A/c | 30,000 | |
| Revaluation A/c Dr | 10,000 | |
| To Furniture A/c | 10,000 | |
| Revaluation A/c Dr | 2,000 | |
| To Provision for Doubtful Debts A/c | 2,000 | |
| Revaluation A/c Dr | 48,000 | |
| To Vivek's Capital A/c | 16,000 | |
| To Vishal's Capital A/c | 16,000 | |
| To Vimal's Capital A/c | 16,000 |
Revaluation Account
| Dr. Particulars | ₹ | Cr. Particulars | ₹ |
|---|---|---|---|
| To Furniture A/c | 10,000 | By Machinery A/c | 30,000 |
| To Provision for doubtful debts A/c | 2,000 | By Investment A/c | 30,000 |
| To Profit transferred to: | |||
| Vivek 16,000 | |||
| Vishal 16,000 | |||
| Vimal 16,000 | 48,000 | ||
| Total | 60,000 | Total | 60,000 |
Net revaluation profit = 60,000 − 12,000 = ₹48,000; shared equally = ₹16,000 each.
(b) Issue of shares — Poornima Ltd (1,00,000 shares of ₹10 each) — Company Accounts
Amounts: Application ₹2, Allotment ₹4, First call ₹2, Final call ₹2 (per share) → ₹2,00,000 / ₹4,00,000 / ₹2,00,000 / ₹2,00,000.
Journal Entries:
| Particulars | Dr (₹) | Cr (₹) |
|---|---|---|
| Bank A/c Dr | 2,00,000 | |
| To Share Application A/c | 2,00,000 |
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