BRIGHT FUTURE

A GROUP OF TOPPERS
SOLUTIONS OF CH – RETIREMENT

Ans1- (1M) (a) 1 : 1

Ans2- (1M) (c) Rs.40000

Ans3- (1M) (b) The capital accounts of all partners in the old profit sharing ratio.

Ans4- (1M) (b) To the debit of the capital accounts of Hari, Ram and Sharma equally.

Ans5- (1M) (b) Rs. 2000

Ans6- (1M) Share taken by P from R = 2/10

P’s new share = 5/10+2/10 = 7/10
Q’s new share = 3/10 (unchanged)
New ratio of P and Q = 7/10 : 3/10 = 7 : 3

Ans7- (3M) JOURNAL

Date Particulars L.F. Dr. Amt. Cr. Amt.
Furniture A/c …..Dr. 12000
To Revaluation A/c 12000
(Being Unrecorded assets recorded)
Revaluation A/c …..Dr. 12000
To Parth’s Capital A/c 6000
To Angad’s Capital A/c 4000
To Leesha’s Capital A/c 2000
(Being transfer of profit on revaluation)
Angad’s Capital A/c …..Dr. 54000
To Furniture A/c 12000
To Bank A/c 42000
(Being Angad’s claim discharged)

Ans8- (3M) JOURNAL

S. No. Particulars l/f Dr. Amt. Cr. Amt.
1. Workmen compensation reserve A/c……………Dr 70000
To Raveena’s Cap. A/c 15000
To Neeti’s Cap. A/c 15000
To Rajat’s Cap. A/c 15000
To workmen claim A/c 25000
2. Workmen compensation reserve A/c ………….Dr 60000
To Rajat’s Cap. A/c 20000
To Sajjan’s Cap. A/c 20000
To Kavita’s Cap. A/c 20000
3. Investment fluctuation reserve A/c………………Dr 4000
To X’s Cap. A/c 1000
To Y’s Cap. A/c 1000
 To Z’s Cap. A/c 1000
To Investments A/c 1000

Ans9- (3M)
Amount agreed to be paid in full settlement 150000
Less: C’s Capital (after all adjustments) 120000
Hidden Goodwill: 30000
JOURNAL
A’s Capital A/c………………………Dr 5000
B’s Capital A/c………………………Dr 25000
To C’s Capital A/c 30000
Calculation of Gaining ratio:
A Gains: 1/4 - 1/6 = 1/12
B Gains: 3/4 - 2/6 = 5/12

Ans10- (3M) (i) JOURNAL

S. NO. Particulars l/f Dr. Amt. Cr. Amt.
1. A’s Cap. A/c………………………..Dr 36000
C’s Cap. A/c………………………..Dr 45000
To B’s Cap. A/c 81000
2. Profit & Loss App. A/c…………Dr 105000
To A’s Cap. A/c 70000
To C’s Cap. A/c 35000

(ii) A and C purchased B’s share for 81000, out of which A pays 36000 and C pays 45000 i.e. A and
C will share B’s profit in the ratio of 36000:45000 = 4 : 5.
As such new profit sharing ratio of A and C will be:
A gets 4/9th of the B’s share of 3/8 = 4/9 * 3/8 = 12/72
A’s old share = 4/8
A’s new share = 4/8 + 12/72 = 2/3
C gets 5/9th of the B’s share of 3/8 = 5/9 * 3/8 = 15/72
C’s old share = 1/8
C’s new share = 1/8 + 15/72 = 1/3
Hence new ratio between A and C = 2/3 : 1/3 = 2 : 1

(iii) Division of profit between A and C

New profit sharing ratio = 2 : 1
Profit = 105000
A’s share = 105000 * 2/3 = 70000
C’s share = 105000 * 1/3 = 35000.

Ans11- (2M)
A’s share will be divided between B and C in the ratio of 2/3 : 1/3
B will gain 2/3 of 2/6 = 2/9
Hence, B’s new share = 1/2 + 2/9 = 13/18
C will gain 1/3 of 2/6 = 1/9
Hence, C’s new share = 1/6 + 1/9 = 5/18
New ratio of B and C = 13/18 : 5/18 = 13 : 5
 Gaining ratio: =2:1

Ans12- (4M) JOURNAL

S. No. Particulars l/f Dr. Amt. Cr. Amt.
1. A’s Cap……………………..Dr 135000
B’s Cap……………………..Dr 135000
C’s Cap……………………..Dr 90000
D’s Cap……………………..Dr 90000
To Goodwill A/c 450000
2. A’s Cap……………………..Dr 120000
B’s Cap……………………..Dr 20000
To C’s Cap. A/c 20000
To D’s Cap. A/c 120000
3. Profit & Loss App. A/c…………..Dr 1200000
To A’s Cap. A/c 600000
To B’s Cap. A/c 400000
To C’s Cap. A/c 200000
Working Notes:
1. Calculation of Gaining ratio:
A= 3/6 – 3/10 = 12/60 (Gain)
B= 2/6 – 3/10 = 2/60 (Gain)
C= 1/6 – 2/10 = 2/60 (Sacrifice)
• A’s share in G.W. = 600000*12/60 = 120000
• B’s share in G.W. = 600000*2/60 = 20000
• C’s share in G.W. = 600000*2/60 = 20000
• D’s share in G.W. = 600000*2/10 = 120000

Ans13- (4M) JOURNAL ENTRIES

Date Particulars L/F Dr. Amt. Cr. Amt.
1. Stock A/c …..Dr. 2000
To Revaluation A/c 2000
2. Revaluation A/c …..Dr. 6000
To Patents A/c 6000
3. Revaluation A/c …..Dr. 20000
To Machinery A/c 20000
4. Revaluation A/c …..Dr. 2500
To Prov. for Bad debts A/c 2500

Ans14- (6M) Revaluation Account

PARTICULARS AMOUNT PARTICULARS AMOUNT
To Plant 15000 By Patents 3000
To Prov. for doubtful debts 600 By Prov. for dis. on creditors 300
To Prov. on dis. on debtors By Prepaid Insurance 870
(3% on 19000) 570 By Loss trf. to:
To Investments 4000 A’s Cap. A/c 12600
To Workmen’s Comp. Liab. 5000 B’s Cap. A/c 8400 21000
25170 25170
 Partner’s Capital Account
Particulars A B Particulars A B
To Goodwill 9000 6000 By Balance b/d 80000 40000
To B’s Cap a/c 20000 ----- By Reserve Fund (3 : 2) 7200 4800
To Revaluation 12600 8400 By Profit & Loss A/c (3:2) 14400 9600
To Investments ------ 8000 By A’s Cap a/c ----- 20000
To Cash ------ 5000
To Bank ------ 47000
To Balance c/d 60000 -----
101600 74400 101600 74400

Balance Sheet
Liabilities Amount Assets Amount
Employee’s provident fund 18000 Plant 75000
Creditors 10000 Patents 7400
Less: Prov. for discount 300 9700 Stock 30000
Workmen comp. liability 5000 Investments 8000
Bank loan 47000 Debtors 20000
Capital 60000 Less: prov. for debtors 1000
Less: prov. for discount 570 18430
Prepaid insurance 870
139700 139700

Ans15- (6M)
Dr. PROFIT & LOSS ADJUSTMENT ACCOUNT Cr.
Particulars Amount Particulars Amount
To fixed assets a/c 2500 By creditors 2000
To provision for doubtful debts 5000 By loss trf. to:
X’s Cap. A/c 2750
Y’s Cap. A/c 1650
Z’s Cap. A/c 1100 5500
7500 7500
Partner’s Capital Accounts
Particulars X Y Z Particulars X Y Z
To Profit & loss By Bal. b/d 40000 62000 33000
Adjustment A/c 2750 1650 1100 By Profit & Loss A/c 42500 25500 17000
To X’s Capital ----- 8000 32000 By Y’s Capital (G.W.) 8000
(G.W.) By Z’s Capital (G.W.) 32000
To Bank A/c 119750
To Bal. c/d
79000 118500 By Bank A/c (Bal.fig) 1150 101600

122500 88650 151600 122500 88650 151600

 Balance Sheet
Liabilities Amount Asset Amount
Creditors 50000 Fixed Assets 57500
(-) paid claim (10000) 40000 Debtors 100000
Employee’s provident fund 10000 (-) Provision for (5000) 95000
Capital A/c bad debts
Y - 79000 Stock 80000
Z – 118500 197500 Cash at Bank 15000
247500 247500

Adjustment:
X’s c/d + Y’s c/d + Z’s c/d + Required cash balance – Existing cash balance
= 119750 + 77850 + 16900 + 15000 – (40000 – 8000)
= 197500 * 2/5 = 79000
= 197500 * 3/5 = 118500