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12th Standard English Medium Accountancy Subject Retirement and Death of a Partner Creative 5 Mark Questions with Solution Part - II updated Creative Questions

Published on: 13/05/2022

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Questions:

Generic 5

5 x 5 = 25

Shankar, Saleem and Pandian are partners, sharing profits in the ratio of 3:2:1. Their balance sheet as an 31^stDecember 2018 is as under

Selvam, Saravanan and Santhosh were partners of a firm sharing profits and losses in the ratio of 3: 2 : 1. Set out below was their balance sheet as on 31't December 2018.

Liabilities	Rs.	Rs.	Assets	Rs.
Bills payable		15,000	Cash in hand	3,000
Sundry creditors		25,000	Cash at bank	35,000
Capital Accounts			Bill receivable	11,000
Selvam	80,000		Book debts	18,000
Sarvanan	50,000		Stock	36,000
Santhosh	40,000	1,70,000	Furniture	7,000
Profit and Loss A/c		30,000	Plant & Machinery	50,000
			Buildings	80,000
		2,40,000		2,40,000

Selvam retired from the partnership on 1^st January 2019 on the following terms:
(i) Goodwill of the firm was to be valued at Rs.30,000
(ii) Assets are to be valued as under stock Rs.30,000 plant and machinery Rs.40,000; Buildings Rs.1,00,000
(iii) A provision for doubtful debts be created at Rs.1,000
(iv) Rs.21,500 was to be paid to Selvam immediately and the balance was transferred to his loan account.
Show revaluation account, capital accounts, bank account and the balance sheet of the reconstituted Partnership.

Thangamuthu, Anaimuthu and Vairamuthu are partners sharing profit and loss in the ratio of 3:3:2.
Thangamuthu wanted to retire on 1st June 2018, the firms books showed a general reserve of Rs.40,000. Pass entry.

Priya, Latha, and Kalai are partners sharing profits and losses in the ratio of 3:2:1 respectively. Priya died on 31^stDecember, 2018 Final amount due to her showed a credit balance of Rs.1,20,000. Pass journal entries if
(a) The amount due is paid off immediately,·
(b) The amount due is not paid immediately,
(c) Rs.80,000 is paid and the balance in future.

Sun, Moon and Jupiter are partners sharing profits and losses in the ratio of 5:3:2. Jupiter retires and the share is taken by Sun and Moon in the ratio of 3:2. Find out the new profit sharing ratio and gaining ratio

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Answers Key:

Generic 5

5 x 5 = 25

Balance sheet as on 31'1 December 2018
Liabilities	Rs	Rs	Assets	Rs
Capital accounts:			Land	80,000
Sankar	50,000		Stock	20,500
Saleem	40,000		Debtors	30,000
Pandiyan	10,000	1,00,000	Cash at bank	14,000
General reserve		36,000	Profit and loss Ale (loss)	6,000
Sundry creditors		14,000
	1,50,000			1,50,000

Dr Revaluation Account Cr
Particulars	Rs	Rs	Particulars	Rs
To Stock A/c		6,000	By Buildings A/c	20,000
Plant and Machinery A/c		10,000
To Provision for doubtful debts A/c		1,000
To Profit on revaluation A/c
Selvam	1,500
Saravanan	1,000
1,000	500	3,000

		20,000		20,000

Dr Capital Account Cr
Particulars	Selvam Rs	Saravanan Rs	Santhosh	Particulars	Selvam Rs	Saravanan Rs	Santhosh Rs
To Bank A/c	21,500	-	-	By Balanced b/d	80,000	50,000	40,000
To Selvam's				By Revaluation
loan A/c	90,000	-	-	A/c	1,500	1,000	500
				By profit and
To Balance C/d	-	71,000	50,500	loss A/c	15,000	10,000	5,000
				By Goodwill	15,000	10,000	5,000

	1,11,500	71,000	50,500		1,11,500	71,000	50,500
				By Balance b/d		71,000	50,500

Dr Bank Account Cr
Particulars	Rs	Particulars	Rs
To Balance b/d	35,000	By Selvam A/c	21,500
		By Balance c/d	13,500
	35,000		35,000

Balance sheet as on 1.1.2018
Liabilities	Rs	Rs	Assets	Rs	Rs
Bills payable		15,000	Cash in hand		3,000
Sundry creditors		25,000	Cash at bank		13,500
Selvam's loan A/c		90,000	Bills receivable		11,000
Capital Accounts			Book debts	18,000
Saravanan	71,000		Less: provision for bad debts	1,000	17,000
Santhosh	50,500	1,21,500
			Stock	36,000
			Less:Decreased	6,000	30,000
			Furniture		7,000
			Plant and Machinery	50,000
			Less : depreciation	10,000	40,000

			Building	80,000
			Add: Appreciation	20,000	1,00,000
			Good will		30,000
		2,51,500			51,500

Journal entries
Date	Particulars	Debit Rs	Credit Rs
2018	General reserve A/c	40,000
June 1	To Thangamuthu's capital A/c (40,000 x 3/8)		15,000
	To Anaimuthu's capital A/c (40,000 x 3/8)		15,000
	To Vairamuthu's capital A/c (40,000 x 2/8)		10,000
	(General reserve transferred Partner's capital account

Journal entries
Particulars		Debit Rs	Credit Rs
a)Priya's Executors A/c	Dr	1,20,000
To BankA/c			1,20,000
(b)Priya's Executors A/c	Dr	1,20,000
To Priya Executor's loan A/c			1,20,000
(Amount due transferred to loan account
(c) Priyas Executors A/c	Dr	1,20,000
To BankA/c			80,000
To Priya's Executors loan A/c			40,000
Rs.80,000 paid and the balance transferred to loan account

Jupiter's share \(\cfrac { 2 }{ 10 } \)
Share gained = Retiring partner's share x Proportion of share gained
Sun = \(\cfrac { 2 }{ 10 } \times \cfrac { 3 }{ 5 } =\cfrac { 6 }{ 50 } \)
Moon = \(\cfrac { 2 }{ 10 } \times \cfrac { 2 }{ 5 } =\cfrac { 4 }{ 50 } \)
Gaining ration = \(\cfrac { 6 }{ 50 } :\cfrac { 4 }{ 50 } \) that is,3:2
New share of continuing partner = Old share + share gained
Sun = \(\cfrac { 5 }{ 10 } +\cfrac { 6 }{ 50 } =\cfrac { 25+6 }{ 50 } =\cfrac { 31 }{ 50 } \)
Moon = \(\cfrac { 3 }{ 10 } +\cfrac { 4 }{ 50 } =\cfrac { 15+4 }{ 50 } =\cfrac { 19 }{ 50 } \)
The new of Sun and Moon is \(\cfrac { 31 }{ 50 } :\cfrac { 19 }{ 50 } \)
that is 31: 19