INDIAN SCHOOL MUSCAT DEPARTMENT OF COMMERCE AND HUMANITIES ACCOUNTANCY CLASS XII

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1 INDIAN SCHOOL MUSCAT DEPARTMENT OF COMMERCE AND HUMANITIES ACCOUNTANCY CLASS XII Worksheet no. Name of the chapter: Admission of a partner Reference bks( NCERT, Tulsian, T.S.Grewal) Date of issue: Date of submission: NEW PROFIT SHARING RATIO AND SACRIFICING RATIO 1) A, B,C and D are in partnership sharing profits and losses in the ratio of 36:24:20:20 respectively. E joins the partnership for 20% share. A,B,C and D would share profits in the future among themselves 3/10: 4/10:2/10:1/10. Calculate the new profit sharing ratio after E s admission. 2) X and Y are in partnership sharing profits and losses in the ratio of 3:2. Z is admitted for 1/4 th share. Afterwards W enters for 20 paise in the rupee. Compute the profit sharing ratio of X,Y, Z and W after W s admission. 3) A and B are partners sharing profits in the ratio of 3:2. C is admitted as partner. The new profit sharing ratio among A, B and C is 4:3:2. Find out the sacrificing ratio. 4) A and B are partners sharing profits in the ratio of 3:2. A surrenders 1/6 th of his share and B surrenders 1/4 th of his share in favour of C, a new partner. What is the new profit and the sacrificing ratio. 5) R and T are partners sharing profits in the ratio of 3:2. S joins the firm. R surrenders 3/5 th of his share and T 1/5 th of his share in favour of S. Find the new profit sharing ratio. 6) A and B are partners in a firm sharing profits in the ratio of 5:3. C joins the firm. A surrenders 1/4 th of his share and B 1/5 th of his share in favour of C. Find the new profit sharing ratio. 7) R and S are partners in a firm sharing profits in the ratio of 3:2. They admit T as a new partner. R surrenders 1/5 th of his profit and S surrenders 2/5 th of his share in favour of T. Calculate the new profit sharing ratio of the partners. 8) Mohan and Sohan are partners in affirm sharing profits in the ratio of 3:2. They admit Karan for 1/5 th share in the profits of the firm which he gets equally from Mohan and Sohan. Calculate the new profit sharing ratio. 9) X and Y are partners in a firm who share profits in the ratio of 3:2. They admit Z for 3/7 th share in profits of the firm. He gets this share as 1/7 th from X and 2/7 th from Y. Calculate the new profit sharing ratio. 10) Ajit and Baljit are partners in a firm sharing profits in the ratio of 3:2. They admit Surjit as a new partner. Ajit surrenders 1/4 th of his share and Baljit sacrifices 1/5 th of his share in favour of Surjit. Calculate the new profit sharing ratio. 11) P and Q are partners in a firm sharing profits in the ratio of 7:5. They admit R as a partner in the firm. The new profit sharing ratio among P,Q and R is 1:1:2. Calculate the sacrificing ratio.

2 12) A and B are partners in a firm sharing profits in the ratio of 3:2. C is admitted as partner. A and B surrenders ½ of their respective share in favour of C. Find the new profit sharing ratio and also the sacrificing ratio. 13) L and m are partners in a firm sharing profits in the ratio of 7:3. They admit N for 3/4 th share of profits which he takes 2/7 th from L and 1/7 th from M. Calculate their new profit sharing ratio. 14) A and B are partners in a firm sharing profits in the ratio of 2:1. C is admitted as partner. A and B surrender ½ of their respective share in favour of C. Find the new profit sharing ratio and also the sacrificing ratio. 15) A and B are partners in affirm sharing profits in the ratio of 5:3. C is admitted as a partner. A and B surrenders ½ of their respective share in favour of C. Find the new profit sharing ratio and also the sacrificing ratio. 16) X and Y are sharing profits in the ratio of 7:3. They admit C for 3/7 th share in the new firm which he takes 2/7 th from X and 1/7 th from Y. Calculate the new profit sharing ratio of partners after C s admission. 17) Suraj and Chand are two partners sharing profits in the ratio of 3:2. They admit Tara into the firm as a partner from1st April, Suraj gives 1/3 rd of his share while Chand gives 1/10 th from his share. Calculate new profit sharing ratio and sacrificing ratio. 18) A and B are partners sharing profits and losses in the ratio of 7:5. They agree to admit C into partnership, who is to get 1/6the share in the profits. He acquires this share as 1/24 th from A and 1/8 th from B. Calculate the new profit sharing ratio. TREATMENT OF GOODWILL 19) M and J are partners sharing profits in the ratio of 3:2. They admitted R as a new partner. The new profit sharing ratio between M, J and R will be 5:3:2. R brought Rs.25,000 for his share of Goodwill. Pass the necessary journal entries for goodwill. 20) Piyush and Deepika are partners sharing profits in the ratio of 7:3. They admit Seema as a new partner paying Rs.4,000 as premium for 1/5 th share. The new profit being 5:3:2. Pass journal entries. 21) A and B are partner sharing profits in the ratio of 3:2. Goodwill appears in their books at Rs.3,000. They admit C into partnership, C paying a premium of Rs.1,000 for one-fourth share in profits. A and B as between themselves sharing profits as before. 22) A and B are partners sharing profits in the ratio of 3:2. They admit C as new partner. C pays a premium of Rs.3,000 for 3/10 share of profits which he acquires from a and B in the ratio of 2:1. Goodwill account appears in the books at Rs.2,000. Pass journal entries. 23) A, B and C are partners sharing profits in the ratio of 5:3:2. Goodwill is appearing in the books at Rs.50,000. D is admitted to the partnership, the new profit sharing ratio between A, B,C and D being 3:3:2:2. Pass the journal entries for Goodwill if the new partner D brings Rs.1,00,000 for capital and cash for his share of goodwill. The goodwill of the firm is valued at Rs.1,20,000 and it is not to appear in the books after D s admission. 24) A and B are partners sharing profits in the ratio of 2:1. They admit C for 1/4 th share in profits. C brings Rs.30,000 for his capital and Rs.8,000 out of his share of Rs.10,000 for goodwill. Before admission goodwill appeared in books at Rs.18,000. Pass journal entries.

3 25) E and F were partners in a firm sharing in the ratio of 3:1. They admitted G as a new partner on for 1/3 rd share. It was decided that E, F and G will share future profits equally. G brought Rs.50,000 in cash and machinery worth Rs.70,000 for his share of profit as premium for goodwill. Pass necessary journal entries. 26) A and B are partners in a firm sharing profits in the ratio of 3:2. They admit C into partnership for 1/5 th share. C brings Rs.30,000 as capital and Rs.10,000 as premium for goodwill. New profit sharing ratio of partners shall be 5:3:2. Pass necessary journal entries. 27) A and B are partners in a firm sharing profits in the ratio of 3:2. They admit C into partnership. C is paying a premium of Rs.1,000 for 1/4 th share of the profits. A, B and C decided to share the future in the ratio of 3:3:2. Pass journal entries. 28) A and B are partners in a firm sharing profits equally. They admit C into partnership. C pays only Rs.1,000 for premium, out of his share of premium of Rs.1,800 for 1/4 th share of profit. Give necessary journal entries if the new profit sharing ratio is 7:5:4. 29) A and B are partners in a firm sharing profits in the ratio of 3:2. They admit C into partnership for 1/5 th share in profits. C brought in Rs.80,000 as his share of capital and Rs.24,000 as premium. The new profit sharing ratio of A, B and C will be 5:3:2. Pass journal entries. 30) A and B are partners in a firm sharing profits in the ratio of 5:3. They admit C into partnership for 3/10 th share in profits which he takes 2/10 from A and 1/10 th from B, C brings in Rs.3,000 as premium in cash out of his share of Rs.7,800. Goodwill does not appear in the books of A and B. Pass journal entries. 31) A and B are partners in a firm with capitals of Rs.26,000 and Rs.22,000. They admit C as a partner for 1/4 th share in profits of the firm. C brings Rs.26,000 as his share of goodwill. Pass journal entries. 32) A and B are partners with capitals of Rs.13,000 and Rs.9,000 respectively. They admit C as partners with 1/5 th share in the profit of the firm. C brings Rs.8,000 as his capital. Pass journal entries. 33) Pass journal entries for the following a) Unrecorded investments worth Rs.5,000 b) Unrecorded liability towards suppliers of Rs.1, ) A and B were partners in affirm sharing profits in the ratio of 4:3 ratio. On1st January they admitted C as a new partner. On the date of C s admission the balance sheet of a and B showed a general reserve of Rs.70,000 and a debit balance of Rs.7,000 in the Profit and loss account. Pass journal entries. (COMPREHENSIVE QUESTIONS WITHOUT ADJUSTMENT OF CAPITAL) 35) L and M are partners sharing profits in the ratio of 5:3. The balance sheet of the firm as at 31 st March 2009 is given below: Capitals L M Land Buildings Other Fixed assets 6,00,000 8,80,000 3,90,000 12,85,000 7,16,000 Reserve fund 2,40,000 Stock 1,98,000 Sundry creditors 1,49,000 Debtors 1,83,000

4 Cash at bank 1,39,000 23,90,000 23,90,000 On 1 st april 2009 N is admitted into partnership on the following terms: a) L, M and N will share profits in the ratio of 7:5:3. b) The assets were revalued for the purpose of admission: Land Rs.7,50,000 ; Buildings Rs.8,00,000. c) Goodwill of the firm was valued at Rs.3,60,000. N was to bring his share of goodwill in cash which was to be retained in the business. d) N has to bring Rs.6,00,000 towards his share of capital. Prepare Revaluation a/c, Capital a/c, cash a/c and balance sheet. 1) A and B are partners sharing profits in the ratio of 3:1. Their balance sheet as on 31 st December 2009 were as follows: A s Capital B s Capital 6,000 2,000 Bank Debtors 1,000 6,000 Creditors 1,000 Stock 3,000 Workmen s compensation Fund 2,000 Investments 5,000 Reserve 4,000 Goodwill 1,000 Employees provident fund 1,000 16,000 16,000 C is admitted for 2/5 th share in future profits. For this purpose following adjustments are agreed upon: C will bring Rs.8,000 for capital and Rs.2,000 for Goodwill. Market value of Investment is Rs.4,500; claim on account of Workmen s Compensation is Rs.1,000. Goodwill is not to appear in the new firm at all. Prepare the necessary ledger accounts and the balance sheet. 2) L and M share profits of a business in the ratio of 5:3. They admit into the firm for a fourth share in the profits in the profits to be contributed equally by L and M. On the date of admission the balance sheet of L and M are as follows. L s capital Machinery M s capital Furniture Reserve fund 4000 Stock Bank loan Debtors 8000 Creditors 2000 Cash Terms of N s admission were as follows: a) N will bring Rs as his capital. b) Goodwill of the firm is to be valued at 4 years purchase of the average profits of the last three years. Average profits of the last three years are Rs while the normal profits that can be earned on the capital employed are Rs

5 c) Furniture is to be appreciated to Rs and the value of stock to be reduced by 20%. Prepare Revaluation account, capital a/c, and the balance sheet of the firm. 1) B and C are partners in a firm sharing profits and losses in the ratio of 5:3. They admit A into the firm on 1 st April 2009 when their balance sheet was as follows: B s Capital 32,000 Goodwill 8,000 C s Capital 34,000 Machinery 38,000 General reserve 4,000 Furniture 5,000 Bank loan 6,000 Debtors 23,000 Creditors 5,000 Stock 7,000 Employees provident fund 1,000 Bank 5,000 Workmen s compensation fund 4,000 86,000 86,000 Terms of admission were as follows: a) A will bring Rs.30,000 through cheque as his share of capital and will be entitled to 1/3 rd share in the profits. b) A is not to bring goodwill in cash. B and C value the goodwill on the basis of 2 years purchase of the average profits of the last three years. No goodwill is to appear in the books. c) Average profits of the last three years are Rs.6,000. d) Machinery and stock are revalued at Rs.45,000 and Rs.8,000 respectively. Prepare revaluation account and partners capitals account and the balance sheet. 1) P and S are partners in a firm sharing profits in the ratio of 3:2. Their Balance sheet as on was as follows: Bank overdraft 20,000 Cash 8,000 Creditors 30,000 Debtors 30,000 Provision for doubtful debts 1,000 Bills receivables 40,000 General reserve 15,000 Stock 50,000 V s loan 20,000 Building 90,000 P s capital 1,00,000 Land 1,48,000 S s capital 1,80,000 3,66,000 3,66,000 On they admitted V as a new partner on the following conditions: a) V will get 1/8 th share in the profits of the firm. b) V s loan will be converted into his Capital. c) The goodwill of the firm was valued at Rs.80,000 and v brought his share of goodwill / premium in cash. d) Provision for doubtful debts was to be made equal to 5% of the debtors. e) Stock was to be depreciated by 5%.

6 f) Land was to be appreciated by 10%. Prepare revaluation/c, capital a/c and the balance sheet of the firm after admission. 1) X and Y were partners in a firm sharing profits in the ratio of 3:2. On their balance sheet was as follows: Creditors 50,000 Land & Building 1,00,000 Bills payable 20,000 Machinery 80,000 Outstanding expenses 10,000 Stock 1,00,000 X s Capital 1,80,000 Debtors 40,000 Y s Capital 70,000 Cash 10,000 3,30,000 3,30,000 On the above date Z was admitted as a new partner in the firm for 1/4 th share in the profits on the following terms: a) Z will bring Rs.1,20,000 for his capital and Rs.20,000 for his share as premium for goodwill. b) Machinery was to be depreciated by 10% and land and building was to be appreciated by Rs.30,000 c) Stock was overvalued by Rs.20,000 d) A provision of 5% was to be created for doubtful debts. e) Salary outstanding was Rs.5,000 Prepare Revaluation a/c, partners capital a/c and the balance sheet. (COMPREHENSIVE QUESTIONS WITH CAPITAL ADJUSTMENTS) 1) X and Y are partners in a firm sharing profits in the ratio of 3:2. They decided to admit Z as a new partner w.e.f. April 1, In future profits will be shared equally. The balance sheet of X and Y as at 1 st April 2009 and the terms of admission are given below: X s Capital 3,00,000 Plant & Machinery 4,53,000 Y s Capital 3,00,000 Furniture and fittings 62,000 Creditors 60,000 Stock 84,000 Outstanding expenses 15,000 Debtors 36,000 Cash in hand 40,000 6,75,000 6,75,000 a) Capitals of the firm was fixed at Rs.6,00,000 to be contributed by partners in the profit sharing ratio. The differences to be adjusted in cash. b) Z was to bring his share of goodwill and capital in cash. Goodwill of the firm is to be valued on the basis of two years s purchase of super profit. The average net profit expected in future by the firm Rs.90,000 per year. The normal rate of return on capital in similar business is 10%. Calculate the goodwill and prepare partners capital a/c and cash a/c.

7 1) A firm ahs two partners X and Y sharing profits in the ratio of 3:2. They admit Z into the firm on 1 st Jan,2009 when the Balance sheet of the firm was as follows: Liabilities Amount Assets Amount X s Capital 3,00,000 Fixed assets 3,60,000 Y s Capital 1,00,000 Investments 90,000 Workmens compensation reserve 75,000 Debtors 40,000 Creditors 70,000 Stock 60,000 Employees provident fund 25,000 Cash 20,000 5,70,000 5,70,000 Terms of admission are as follows: (i) Z is to bring Rs.2,00,000 as his capital for a third share in future profits and Rs.35,000 as his share of goodwill. (ii) Value of fxed assets and stock are to be reduced by 20% and Rs.10,000 respectively. (iii) Capitals of the partners shall be proportionate to their profit sharing ratio, taking Z s capital as the base. Excess capital is to be withdrawn in cash by the partner concerned and the deficiency is to be made up by bringing in cash. Prepare partners capital accounts and the balance sheet of the firm. 1) On 31 st December 2009 the Balance sheet of A and B who are partners in a firm sharing profits in the ratio of 3:2 was as follows: Liabilities Amount Assets Amount Capital accounts A B General reserves Workmens compensation fund 10,000 8,000 15,000 Plant & machinery Land & Buildings Debtors 12,000 Less: PBDD 1,000 Stock Cash 10,000 8,000 11,000 12,000 9,000 5,000 Creditors 12,000 50,000 50,000 They agreed to admit C into partnership for 1/5 th share of profits on the following terms: (i) Provision for doubtful debts would be increased by Rs.2,000. (ii) (iii) The value of Land and Building would be increased to Rs.18,000. The value of stock would be increased by Rs.4,000. (iv) The liability against workmen s compensation fund is dtermined at Rs.2,000. C brought in as his share of goodwill Rs.10,000 in cash. (v) C would bring further cash as would make his capital equal to 20% of the total capital of the new firm after the above revaluation and adjustments are carried out. Prepare revalauation a/c, partners capital a/c and the balance sheet of the firm after C s admission. 1) A and B are partners in a firm sharing profits in the ratio of 3:2. Their balance sheet as at 31 st December 2009 stood as follows: Liabilities Amount Assets Amount Capital accounts A B 35,000 30,000 Machinery Furniture Investments 33,000 15,000 20,000 General reserves 10,000 Stock 23,000

8 Bank loan 9,000 Debtors 19,000 Less: PBDD 2,000 17,000 Creditors 36,000 Cash 12,000 1,20,000 1,20,000 On that date they admitted C into partnership for 1/4 th share in the profit on the following terms: (i) C brings capital proportionate to his share. He brings Rs.7,000 in cash as his share of goodwill. (ii) Debtors are all good. (iii) Depreciate stock by 5% and furniture by 10%. (iv) An outstanding bill for repairs Rs.1,000 will be brought in books. (v) Half of the investments were to be taken over by A and B in their profit sharing ratio at book value. (vi) Bank loan is paid off. (vii) Partners agreed to share future profits in the ratio of 3:3:2. Prepare revaluation account, partners capital account and the balance sheet after C s admission. 1) Sun, Moon are partners sharing profits in the ratio of 5:3. Their balance sheet as at 31 st December 2009 was as follows: Liabilities Amount Assets Amount Creditors 20,000 Goodwill 30,000 Employees provident fund 8,000 Building 34,000 Workmens compensation fund 28,000 Plant 27,000 Sun s capital a/c 80,000 Furniture 4,000 Moon s capital a/c 40,000 Debtors 32,500 Bills receivables 15,000 Stock 22,500 Bank 11,000 1,76,000 1,76,000 On 1 st January 2010 they decided to admit Star giving 1/5 th share. He brings Rs.40,000 as capital. The partners decide to revalue the assets as follows: Goodwil Rs.50,000 ; Debtors Rs.31,000 ; Building Rs.40,000 ; Bills receivables Rs.12,500, Plant Rs.25,000 ; Stock Rs.32,500, Furniture Rs.2,000. Sun and Moon also decided to adjust their capital accounts on the basis of Star s capital by opening current accounts and not to show goodwill in the books. Pass the journal entries for goodwill and prepare revaluation a/c, partners capital a/c and balance sheet of the new firm.

9 INDIAN SCHOOL MUSCAT DEPARTMENT OF COMMERCE AND HUMANITIES CLASS XII ( ) ACCOUNTANCY WORKSHEET NO : DATE OF ISSUE : CHAPTER : RETIREMENT OF PARTNERSHIP DATE OF SUBMISSION: REFERENCE : P.C.TULSIAN, NCERT, T.S.GREWAL 1 Kangli, Mangli and Sanvali are three partners sharing profits in the ratio of 4:3:2. Kangli retires. Assuming Mangli and Sanvali will share profits in future in the ratio of 5:3. Determine the gaining ratio. 2 A, B and C have been sharing profits and losses in the ratio of 5:3:2.B retires. His share is taken over by A and C in the ratio of 2:1.Calculate the new profit sharing ratio. 3 Give two circumstances in which gaining ratio may be applied. 4 A, B and C were partners in a firm sharing profits in the ratio of 5:4:3.B retired and his share was divided equally between A and C. Calculate the new profit sharing ratio of A and C. 5 P, Q and R are equal partners in a firm. Goodwill has been valued at Rs.36,000. On R s retirement, P and Q agrees to share profits in the ratio of 3:2.Pass necessary journal entry for treatment of R s share of goodwill. 6 M, N and O who are partners in a firm share profits in the ratio of 3:2:1. Goodwill has been valued at Rs.60,000. On N s retirement M and O agree to share profits equally. Pass necessary journal entries for treatment of N s share of goodwill. 7 A, B and C are partners in a firm sharing profits in the ratio of 4:3:1. A retires and his share is taken up by B and C equally. Find the new profit sharing ratio and the gaining ratio. The goodwill of the firm is valued at Rs.16,000. No goodwill account appears in the books. Pass necessary journal entry for recording the goodwill. 8 A, B and C are partners in a firm sharing profits in the ratio of 3:2:1. A retires and his share is taken over by B and C equally. Find the new profit sharing ratio and gaining ratio. The goodwill of the firm is valued at Rs.18,000. No goodwill account appears in the books. Pass the necessary journal entry for recording the goodwill. 9 A, B and C are partners in a firm sharing profits in the ratio of 5:3:2. A retires and his share is taken up by B and C equally. Find the new profit sharing ratio and the gaining ratio. The goodwill of the firm is valued at Rs.20,000. No goodwill account appears in the books. Pass journal entries. 10 Surender, Ramesh, Naresh and Mohan are partners in a firm sharing profits in the ratio of 2:1:2:1. On the retirement of Naresh the goodwill was valued at Rs.72,000. Surender, Ramesh and Mohan decided to share future profits equally. Pass the necessary journal entries without opening goodwill account. 11 A, B and C are equal partners in a firm. B retires and his claims including his capital and his share of goodwill is Rs.40,000. He is paid in kind a vehicle valued at Rs.20,000 unrecorded in the books of the firm till the date of retirement and the balance in cash. Give the journal entries for recording the payment to B in the books of the firm. 12 X,Y and Z are partners sharing profits in the ratio of ½:3/10: 1/5 respectively. Y retires and his share is taken up by X and Z in the ratio of 2:1. Then immediately W is admitted for 1/4 th share of profits, half of which was gifted by X and the remaining share was taken by W equally from X and Z.

10 Calculate the new profit sharing after W s admission 13 X,Y and Z share profits and losses in the ratio of 4:3:2 respectively. Y retires and X and Z decide to share future profits and losses in the ratio of 5:3. Then W is admitted for 3/10 th share of profits half of which was gifted by X and the remaining share was taken by W equally from X and Z. Calculate the gaining ratio of X and Z on Y s retirement and the new profit sharing ratio after W s admission. 14 The Balance sheet of J, K and L who were sharing profits in the ratio of 5:3:2 is given below as at 31 st March 2003: Capitals Land 1,85,000 J 5,78,800 Buildings 2,87,000 K 3,47,800 Plant & Machinery 3,86,000 L 2,37,900 Stock 1,85,000 Creditors 78,600 Debtors 92,100 Cash 1,08,000 12,43,100 12,43,100 L retires on the above date and the following adjustments in the value of assets and liabilities were agreed upon: (a) Land was found under valued by Rs.1,20,000, Plant and machinery was found over valued by Rs.35,000. (b) Provision for doubtful debts was required for Rs.6,000. (c) Goodwill was valued at Rs.3,00,000 and was to be adjusted against the capital of the remaining partners. L was paid Rs.75,000 immediately and the balance amount was to be transferred to his loan account. Prepare Revaluation account, Capital accounts and the Balance sheet. 15 The Balance sheet of A, B and C who were sharing profits in the ratio of 5:3:2 is given as at 31 st March 2003: Capitals Land 4,00,000 A 7,20,000 Buildings 3,80,000 B 4,15,000 Plant & Machinery 4,65,000 C 3,45,000 Furniture 77,000 Reserve fund 1,80,000 Stock 1,85,000 Creditors 1,24,000 Debtors 1,72,000 Outstanding expenses 16,000 Cash in hand 1,21,000 18,00,000 18,00,000 B retires on the above date and the following adjustments are agreed upon his retirement. (a) (b) Stock was valued at Rs.1,72,000. Furniture and fittings were undervalued by Rs.3,000. (c) An amount of Rs.10,000 due from Mr. D was doubtful and a provision for the same was required. (d) Goodwill of the firm was valued at Rs.2,00,000, but it was decided not to show

11 goodwill in the books of accounts. (e) B was paid Rs.40,000 immediately on retirement and the balance was transferred to his loan account. (f) A and C were to share future profits in the ratio of 3:2. Prepare Revaluation account, Capitals accounts and the Balance sheet of the reconstituted firm. 16 A, B and C were partners in a firm sharing profits in 3:2:1 ratio. On 28 th February 2001 B retired. On the date of his retirement the balance in his capital account was Rs.35,000. The other assets and liabilities of the firm on that date were as follows: Cash Rs.10,000 ; Building Rs.1,00,000 ; Plant and Machinery Rs.40,000 ; Stock Rs.20,000 ; Debtors Rs.20,000 and Investments Rs.30,000. The following was agreed between the partners on B s retirement: a) Building to be appreciated by 20%. b) Plant and machinery to be depreciated by 10%. c) A provision of 5% on debtors to be created for doubtful debts. d) Stock was to be valued at Rs.18,000 and investments at Rs.35,000 e) An old photocopier previously written off was sold for Rs.2,000 f) Partners had to pay Rs.5,000 to the family of an employee who died in accident. B was paid Rs.7,500 in cash and the balance in three equal yearly installments with interest at 10%p.a starting from Pass the necessary journal entries to record the above adjustments, prepare Revaluation a/c and B s loan a/c till it is finally paid. The firm closes its book on 31 st March every year. 17 P,Q and R were partners in a firm sharing profits in the ratio of 2:3:5. On their Balance sheet was as follows: Creditors 70,000 Bank 45,000 Capital accounts P Q R 80,000 70,000 60,000 Debtors 40,000 Less : PDBB 5,000 35,000 50,000 1,40,000 Stock Building Profit & loss a/c 10,000 2,80,000 2,80,000 On the above date R retired from the firm due to his illness on the following terms: a) Building was to be depreciated by Rs.40,000. b) Provision for doubtful debts was to be maintained at 20% on debtors. c) Salary outstanding Rs.5,000 was to be recorded and creditors Rs.4,000 will not be claimed. d) Goodwill of the firm was valued at Rs.72,000 and the same was to be treated without opening goodwill account. e) R was to be paid Rs.15,000 in cash, through bank and the balance was to be transferred to his loan account. Prepare Revaluation a/c, Partners capital a/c and the Balance sheet of P and Q after R s retirement. 18 X,Y and Z were partners in firm sharing profits in the ratio of ½,1/3, 1/6 respectively. The Balance

12 Sheet of the firm on 31 st December 2004 stood as follows: Creditors 9,500 Cash at Bank 1,250 Bills payable Reserve fund 2,500 6,000 Debtors 8,000 Less : PBDD 7,750 Capitals : X Y Z 20,000 15,000 12, Stock Motor vans Machinery Buildings 12,500 4,000 17,500 22,500 65,500 65,500 Y retired from the firm on the above date subject to the following conditions: a) Goodwill of the firm is valued at Rs.9,000 and is not to be shown in the books of the firm. b) Machinery would be depreciated by 10% and motor vans by 15%. c) Stock would be appreciated by 20% and Buildings by 10%. d) The provision for doubtful debts would be increased by Rs.975. e) Liability for workmen s compensation to the extent of Rs.825 would be created. It was agreed that X and Z would share profits in the future in the ratio of 3:2 respectively. Prepare the Revaluation a/c, Partners capital a/c and the Balance sheet of the firm after the retirement of Y. 19 X, Y and Z are in partnership sharing profits in the ratio of 5:3:2. Their Balance sheet on the day Y decided to retire was: X s Capital 30,000 Buildings 25,000 Y s Capital 20,000 Plant & Machinery 15,000 Z s Capital 20,000 Investments 25,000 General Reserve 10,000 Debtors 10,000 Sundry Creditors 7,000 Stock 5,000 Bills Payable 3,000 Cash 10,000 90,000 90,000 The terms of retirement were : a) Y sells his share of goodwill to X for Rs.3,000 and to Z for Rs.4,000. b) Stock to be appreciated by 20% and Buildings by Rs.5,000. c) Investments were sold for Rs.27,000. d) Y is paid off in cash. Prepare Revaluation a/c, Partners capital a/c and the Balance Sheet of the new firm. 20 Jyoti, Ruchi and Yogesh were sharing profits and losses in proportion to their capitals. Their Balance Sheet on 31 st December 2001 was as under: Sundry creditors 20,000 Buildings 1,00,000

13 Employees Provident fund 1,600 Machinery 48,000 Contingency Reserve 4,500 Stock 18,000 Employees Compensation 4,500 Debtors 20,000 Reserve Capitals Less : PBDD ,600 Jyoti Ruchi Yogesh 76,000 57,000 38,000 Bank Cash 8,000 8,000 2,01,600 2,01,600 Ruchi decided to retire due to old age. They agreed to the following adjustments in the books of accounts to decide Ruchi s share. a) Buildings to be appreciated by 20%. b) Provision for doubtful debts is to be increased to 5% on debtors. c) Out of total insurance premium paid Rs.3,000 is to be treated as prepaid insurance. This amount was earlier debited to Profit and loss account. d) Machinery is to be depreciated by 20%. e) Goodwill of the entire firm is to be valued at Rs.72,000. Ruchi's share is to be adjusted in the accounts of Jyoti and Yogesh. f) Jyoti and Yogesh also decide that their total capital of the firm after Ruchi s retirement will be Rs.1,80,000 in their profit sharing ratio i.e actual cash to be brought in or paid to a partner as the case may be. Prepare Revaluation a/c, the Capital a/c of all the partners and the Balance Sheet of Jyoti and Yogesh. 21 A, B and C were partners sharing profits and losses in the ratio of 5:3:2. On 31 st December 2001 the Balance Sheet of the firm stood as under: Sundry creditors 26,500 Bank(minimum balance) 10,000 Employees Reserve fund 3,500 Debtors 65,000 Workmen Compensation 15,000 Stock 55,000 Reserve A s Capital 1,10,000 Fixed assets 1,25,000 B s Capital 56,000 C s Capital 44,000 2,55,000 2,55,000 B retires on 31 st December For the purpose the following adjustments were agreed upon; a) That Goodwill be valued at Rs.75,000 but no goodwill is to appear in the books of new firm. b) That fixed assets be appreciated by 20%. c) That Stock be reduced to Rs.50,000. d) That B be paid through cash brought in by A and C in such a way as to make their capitals proportionate to their new profit sharing ratio which is to be A-3/5 and C- 2/5. Prepare Partners Capital a/c and the Balance sheet of A and C.

14 22 The Balance sheet of A, B and C who are partners in a firm sharing profits according to their capitals as on 31 st March 2003 was as under: Creditors 21,000 Buildings 1,00,000 A s Capital 80,000 Machinery 50,000 B s Capital 40,000 Stock 18,000 C s Capital 40,000 Debtors 20,000 General Reserve 20,000 Less : PBDD 1,000 19,000 Cash at bank 14,000 2,01,000 2,01,000 On that date B decided to retire from the firm and was paid for his share in the firm subject to the following: a) Building to be appreciated by 20%. b) Provision for Bad debts to be increased to 15% on debtors. c) Machinery to be depreciated by 20%. d) Goodwill of the firm is valued at Rs.72,000 and the retiring partner s share is adjusted through the capital account of retaining partners. e) The capital of the new firm be fixed at Rs.1,20,000. Prepare Revaluation a/c, Capital accounts of the partners and the Balance Sheet after retirement of B. 23 A, B and C were partners sharing profits and losses in the ratio of 5:3:2. On the Balance sheet was as under: Trade Creditors 26,500 Bank 20,000 Employees Provident fund 3,500 Debtors 30,000 Reserve 20,000 Stock 55,000 A s Capital 1,00,000 Fixed assets 1,15,000 B s Capital 50,000 Goodwill 15,000 C s Capital 40,000 Advertisement Expenditure 5,000 2,40,000 2,40,000 B retires on For the purpose the following adjustments were agreed upon: a) That the goodwill be valued at 2 years purchase of the average profits of 3 completed years preceding the date of retirement. The profits for previous years were 2001: Rs.45,000, 2002 : Rs.50,000, 2003: Rs.55,000, 2004: Rs.60,000. b) That fixed assets were found undervalued by Rs.25,000. c) That stock was found overvalued by Rs.5,000. d) That the new profit sharing ratio of A and C will be 3:2. e) That B be paid through cash brought in by A and C in such a way as to make their capitals proportionate. Minimum Bank balance is to be maintained at Rs.10,000. f) The partners decide that Goodwill is not to appear in the Balance sheet of new firm.

15 Prepare Revaluation a/c, Capital a/c of partners and the Balance sheet of A and C. 24 On 31 st March 2002 the Balance Sheet of M/s Ram, Hari and Mohan sharing profits and losses in the ratio of 2:3:2 stood as follows: Capital accounts Goodwill 7,00,000 Ram 10,00,000 Land and Building 10,00,000 Hari 15,00,000 Machinery 17,00,000 Mohan 10,00,000 Stock 5,00,000 Workmen Compensation 10,50,000 Sundry Debtors 6,00,000 reserve Sundry creditors 5,00,000 Cash and Bank 5,50,000 50,50,000 50,50,000 On 31 st March 2002 Hari desired to retire from the firm and the remaining partners decided to carry on. It was agreed to revalue the Assets and Liabilities on that date on the following basis: a) Land and Building be appreciated by 30%. b) Machinery be depreciated by 20%. c) Closing stock to be valued at Rs.4,50,000. d) Provision for doubtful debts be made at 5%. e) Old credit Balances of Sundry Creditors Rs.50,000 be written back. f) Goodwill of the entire firm be valued at Rs.6,30,000 and Hari s share of the Goodwill be adjusted in the accounts of Ram and Mohan who share the future profits and losses in the ratio of 3:2. No Goodwill account being raised. g) The total capital of the firm is to be settled on the following basis. Individual capitals be in their profit sharing ratio. h) Amount due to Hari is to be settled on the following basis : 50% on retirement and the balance 50% within one year. Prepare Revaluation a/c, Partners Capital a/c, Cash a/c and the Balance sheet. 25 On 31 st December 2001 the Balance sheet of A, B and C were sharing profits and losses in proportion to their capitals stood as follows: Creditors 20,000 Goodwill 6,000 Employees provident fund 1,600 Cash at Bank 16,000 A s Capital 78,000 Debtors 20,000 B s Capital 52,000 Less : PBDD 19, C s Capital 26,000 Stock 18,000 Contingency Reserve 30,000 Machinery 48,000 Workmen Compensation 6,000 Land & Building 1,00,000 reserve Advertisement expenditure 6,000 2,13,600 2,13,600 B retires and the following readjustments of the assets and liabilities have been agreed upon before

16 the ascertainment of the amount payable to B. a) That out of the amount of insurance which was debited entirely to Profit and Loss account, Rs.2,000 be carried forward as an unexpired insurance. b) That the Land and Building be appreciated by 10%. c) That the Provision for Doubtful debts be brought up to 5% on Debtors. d) That Machinery be depreciated by 5%. e) That a provision of Rs.3,000 be made in respect of an outstanding bill for repairs. f) That the Goodwill of the entire firm be fixed at Rs.36,000 and B s share of the same be adjusted into the accounts of A and C who are going to share future profits in the proportion of ¾ and ¼ respectively.( No goodwill being raised) g) That the entire capital of the firm as newly constituted be fixed at Rs.1,20,000 between A and C in the proportion of ¾ and ¼ after passing entries in their accounts for adjustments i.e. actual cash to be paid off or to be brought in by the continuing partners as the case may be. h) That B be paid Rs.6,000 in cash and the balance be transferred to his loan account. Prepare Revaluation a/c, Partners Capital a/c and the Balance sheet of the firm.

17 INDIAN SCHOOL MUSCAT DEPARTMENT OF COMMERCE AND HUMANITIES CLASS XII ACCOUNTANCY WORKSHEET NO : DATE OF ISSUE : CHAPTER : DEATH OF A PARTNER DATE OF SUBMISSION: REFERENCE : P.C.TULSIAN, NCERT, T.S.GREWAL 1 Ram, Manohar and Joshi were partners in a firm. Joshi died on 28 th February His share of profit from the closure of the last accounting year till the date of death was to be calculated on the basis of the average of three completed years profit before death. Profits for 2001,2002 and 2003 were Rs.7,000, Rs.8,000 and Rs.9,000 respectively. Calculate Joshi s share of profit till his death and pass the necessary journal entry for the same. 2 P, R and S are in partnership sharing profits in the ratio of 4:3:1 respectively. It is provided in the partnership deed that on the death of any partner his share of goodwill is to be valued at half of the profits credited to his account during the previous four completed years. R dies on 1 st January The firm s profits for the last four years 2001: Rs.1,20,000; 2002: Rs.80,000; 2003: Rs.40,000; 2004 : Rs.80,000. Determine the amount that should be credited to R in respect of his share of goodwill. 3 X, Y and Z were partners in a firm sharing profits in the ratio of 5:3:2. On 15 th February 2002 X dies and the new profit sharing ratio of Y and Z was equal. On X s death the goodwill of the firm was valued at Rs.50,000. Calculate the gaining ratio and pass the necessary journal entry for treatment of goodwill. 4 P,Q and R were partners sharing profits in the ratio of 3:1:1. The Balance Sheet of the firm is given below as at March 31, Balance Sheet of P,Q and R As at 31 st March 2004 Capitals Land 2,80,000 P 6,03,300 Buildings 3,40,000 Q 4,12,800 Plant & machinery 2,48,000 R 2,01,900 Furniture and Fitting 48,000 General Reserve 10,000 Stock 1,09,000 Sundry Creditors 62,000 Sundry Debtors 1,32,000 Cash in hand 1,33,000 12,90,000 12,90,000 Partnership deed provides for the settlement of claim on death of a partner in addition to his capital as under :

18 1) The share of deceased partner to be computed on the basis of average profits of the past three years for the period from the Balance Sheet to date of death of the partner. 2) His share in profit/ loss on revaluation of assets and reassessment of liabilities. 3) His share of goodwill valued on the basis of two years purchase of last three years average profits. Q died on June 1 and the following information is provided: a) Profits for the last three years were Rs.80,000, Rs.1,30,000, Rs. 1,50,000. b) The assets were revalued as land Rs.3,80,000, Plant and Machinery Rs.1,80,000. c) Q withdrew Rs.10,000 during the current financial year. d) Rs.1,00,000 was paid immediately on Q s death to his executor and the balance amount was to be paid later. Pass the necessary journal entries and prepare Q s Capital account. 5 X and Y are partners. The partnership deed provides inter alia: a) That the accounts be balanced on 31 st December in each year. b) That the profits be divided as follows: X one-half, Y one-third and carried to a Reserve account one-sixth. c) That in the event of the death of a partner, his executors be entitled to be paid out: 1) The Capital to his credit at date of death. 2) His proportion of profits to date of death based on the average profits of the last three completed years. 3) By way of Goodwill his proportion of the total profits for the three preceding years. The Balance Sheet as at 31 st December 2003 X s Capital 9,000 Sundry Assets 21,000 Y s Capital 6,000 Contingency Reserve 3,000 Creditors 2,000 Employees provident fund 1,000 21,000 21,000 The Profits for three years were 2001: Rs.4,200, 2002: Rs.3,900, 2003: Rs.4,500. Y died on 1 st May Prepare the necessary accounts. 6 A, B and C are partners sharing profits in the proportions of ½, ¼ and ¼ respectively. Their Balance sheet on 31 st December 2001 was as follows: Sundry Creditors 3,000 Cash 1,000

19 Employees Provident Fund 1,000 Sundry Debtors 4,500 A s Capital 8,000 Stock in trade 5,500 B s Capital 5,000 Loan to A 3,000 C s Capital 3,000 Building 10,000 Contingency Reserve 4,000 24,000 24,000 A died on 1 st January The firm had effected an assurance for Rs.10,000 on the joint lives of the three partners and the amount of the policy was realized on 1 st February According to the partnership agreement Goodwill was to be calculated at two year s purchase of the average profits of three completed years preceding the death or retirement of a partner. The deceased partner s share of Capital and Goodwill etc. was paid out in cash on 1 st March 2002 the available cash balance being supplemented by a loan from the firm s banker on the security of the building. The net profits of three preceding years were Rs.5,500, Rs.4,800 and Rs.6,500. Show the necessary ledger accounts of the partners and the Balance Sheet after A s death. 7 R, S and T were partners sharing profits and losses in the ratio of 5:3:2 respectively. On 31 st December 2004 their Balance sheet stood as follows: Sundry Creditors 50,000 Goodwill 25,000 Employees provident fund 5,000 Leasehold 1,00,000 Contingency Reserve 20,000 Patents 30,000 Employees Compensation 10,000 Machinery 1,50,000 Reserve Capital Accounts Stock 50,000 R 1,50,000 Debtors 40,000 S 1,25,000 Cash at Bank 40,000 T 75,000 4,35,000 4,35,000 T died on 1 st May It was agreed that: a) Goodwill to be valued at 2 ½ years purchase of last four years average profits which were : 2001 Rs.65,000, 2002 Rs.60,000, Rs.80,000 and 2004 Rs.75,000. b) Machinery be valued at Rs.1,40,000; Patents be valued at Rs.40,000; Leasehold be valued at Rs.1,25,000 on 1 st May c) For the purpose of calculating T s share in the profits to 2005, the profits in 2005 should be taken to have accrued on the same scale as in d) A sum of Rs.21,000 to be paid immediately to the executors of T and the balance to be paid in four equal half yearly instalments together with 10% per annum. e) Pass the necessary journal entries to record the above transactions and T s executors account for A, B and C were partners in a firm sharing profits and losses in the ratio of 5:3:2 respectively. A died on 28 th February The Balance Sheet on that date was as follows: A s Capital 12,000 Goodwill 6,000 B s Capital 16,000 Machinery 35,000

20 C s Capital 12,000 Furniture 6,000 Contingency Reserve 12,000 Stock 9,000 Creditors 20,000 Debtors 15,000 Employees Provident Fund 2,000 Cash 3,000 The firm has a joint life policy in the names of the partners for insured value of Rs.60,000. The premium paid on the policy was debited to Profit and loss account. The partnership deed provided that on the death of a partner the assets and liabilities are to be revalued. The assets and liabilities were revalued as follows on A s death: a) Machinery Rs.45,000 and furniture Rs.7,000. b) A provision of 10% was created for doubtful debts. c) A provision of Rs.15,000 was made for taxation. d) The Goodwill of the firm was valued at Rs.21,000 on A s death. e) Death claim for policy was realized in full. The amount payable to A was transferred to his executor s account. Prepare Revaluation account, Partner s capital account and Balance sheet. 9 The following is the balance sheet of Ram, Mohan and Sohan as on 31 st December Sundry creditors 10,000 Goodwill 5,000 Workmen Compensation 7,500 Tools 3,000 Reserve Ram s Capital 20,000 Furniture 13,000 Mohan s Capital 10,000 Stock 16,000 Sohan s Capital 10,000 Debtors 12,000 Cash at bank 8,000 Cash in hand ,500 57,500 Ram, Mohan and Sohan shared profits and losses in the ratio of 2:2:1. Sohan died on 31 st March Under the partnership agreement the executor of Sohan was entitled to : a) Amount standing to the credit of his capital account. b) Interest on 6%p.a. c) Share of Goodwill on the basis of twice the average of past three years profits. d) Share of profit from the closing of last financial year to the date of death on the basis of average profits of past three years. Profits for 2001,2002 and 2003 were Rs,10,000, Rs.15,000 and Rs.20,000. Sohan s executor was paid Rs.1,400 on 1 st April 2004 and the Balance sheet in four equal yearly instalments from with 6%p.a. Pass the necessary journal entries and draw up Sohan s account to be rendered to his executor and Sohan s Executor Account till it is finally paid. 10 A,B and C were partners in a firm sharing profits in the ratio of 5:3:2. On 31 st March 2003 their

21 Balance sheet was as under : Creditors 11,000 Buildings 20,000 Reserves 6,000 Machinery 30,000 A s Capital 30,000 Stock 10,000 B s Capital 25,000 Patents 11,000 C s Capital 15,000 Debtors 8,000 Cash 8,000 87,000 87,000 A died on 1 st October It was agreed between his executors and the remaining partners that : a) Goodwill to be valued at 2 ½ years purchase of the average profits of the previous four years which were 2000: Rs.13,000; 2001 : Rs.12,000 ; 2002 : Rs.20,000 and 2003 : Rs.15,000. b) Patents be valued at Rs.8,000; Machinery at Rs.28,000 and Buildings at Rs.25,000. c) Profits for the year be taken as having accrued at the same rate as that of the previous year. d) Interest on Capital be provided at 10%p.a. e) Half of the amount due to A to be paid immediately to the executor and the balance transferred to his Executor Loan a/c. Prepare A s Capital a/c and A s Executor A/c as on 1st October On 31 st December 2003 the Balance Sheet of P,Q and R who were partners in affirm was as under : Sundry Creditors 25,000 Building 26,000 Reserves fund 20,000 Investment 15,000 Capital P Q R 15,000 10,000 10,000 Debtors Bills Receivable Stock Cash 15,000 6,000 12,000 6,000 80,000 80,000 The Partnership deed provides that the profits be shared in the ratio of 2:1:1 and that in the event of death of the partner, his executors will be entitled to be paid out : a) The capital to his credit at the date of last Balance Sheet. b) His proportion of Reserve at the date of last balance sheet. c) His proportion of profits to the date of death based on the average profits of the last three completed years plus 10% and d) By way of goodwill his proportion of the total profits for the three preceding years. e) The net profits for the last three years were as follows: 2001: Rs.16,000 ; 2002 :

22 Rs.16,000; 2003 : Rs.15,400. R died on 1 st April He had withdrawn Rs.5,000 to the date of his death. The investments were sold at par and R s executors were paid off. Prepare Partner capital account, R s Executor s Account and Balance Sheet. 12 Arti, Bharati and Seema are partners in a firm sharing profits in the proportion of 3:2:1. Their Balance Sheet as on 31 st March 2003 stood as follows: Bills payable 12,000 Buildings 21,000 Creditors 14,000 Cash in hand 12,000 General Reserve 12,000 Cash at Bank 13,700 Capital accounts Debtors 12,000 Arti 20,000 Bills Receivables 4,300 Bharati 12,000 Stock 1,750 Seema 8,000 Investments 13,250 78,000 78,000 Bharati died on 30 th june 2003 and according to the deed of the said percentage her executors are entitled to be paid as under: a) The capital to her credit at the time of her death and interest 10% p.a. b) Her proportionate share of general reserves. c) Her share of profits for the intervening period will be based on the sales during that period. Sales were calculated as Rs.1,20,000. The rate of profit during past three years had been 10% on sales. d) Goodwill according to her share of profit to be calculated by taking twice the amounts of profits of the last three years less 20%. The profits of the previous three years were : Rs.8, Rs.9, Rs.9,800 The investments were sold at par and her executors were paid out. Prepare Bharati s capital account and her executors account. 13 A, B and S are partners in a firm sharing profits in the proportion of 5:3:2. Their Balance Sheet as on 31 st March 2003 stood as follows: Creditors 7,000 Buildings 20,000 General Reserve 10,000 Cash in hand 21,000 Capital accounts Stock 10,000 A 30,000 Patents 6,000 B 25,000 Machinery 30,000 S 15,000 87,000 87,000

23 S died on 1 st October 2003 and it was agreed between his executors and the remaining partners that : a) Goodwill will be valued and 2 years purchase of the average profits of the previous five years which were 2001: Rs.15,000; 2002: Rs.13,000; 2003: Rs.12,000; 2004: Rs.15,000 and 2005: Rs.20,000. b) Patents be valued at Rs.8,000; Machinery at Rs.28,000; Buildings at Rs.30,000. c) Profit for the year be taken as having accrued at the same rate as the previous year. d) Interest on capital be provided at 10%p.a. e) A sum of Rs.7,750 was paid to his executors immediately. Prepare S s capital account and his executors account. 14 A,B and C were partners in a firm sharing profits in the ratio of 5:3:2. On 31 st December 2004 their Balance sheet was as under : Creditors 10,000 Goodwill 5,000 Contingency Reserves 4,000 Machinery 30,000 A s Capital 30,000 Stock 13,000 B s Capital 30,000 Patents 6,000 C s Capital 20,000 Debtors 6,000 Employee provident fund 4,000 Cash 10,000 Investments 10,000 Premises 20,000 Advertisement suspense a/c 2,000 1,02,000 1,02,000 C died on 1 st May It was agreed between his executors and the remaining partners that : a) Goodwill to be valued at 2 ½ times the average profits of the previous four years which were 2000: Rs.13,000; 2001 : Rs.12,000 ; 2002 : Rs.16,000 and 2003 : Rs.15,000. b) Patents be valued at Rs.8,000; Machinery at Rs.25,000 and Premises at Rs.25,000. c) The share of Profits of C should be calculated on the basis of the profit of d) Rs.8,600 should be paid immediately to his Executor and the balance should be in 4 equal half yearly installment s carrying 10%. Pass journal entries and Prepare C s Capital a/c and C s Executor A/c as on 1st May 2005.

24 INDIAN SCHOOL MUSCAT DEPARTMENT OF COMMERCE AND HUMANITIES ACCOUNTANCY CLASS XII Worksheet no. Name of the chapter: Dissolution of a partner Reference bks( NCERT, Tulsian, T.S.Grewal) Date of issue: Date of submission: 1 Supriya and Monika are partners, who share profit in the ratio of 3:2. Following is the balance sheet as on 31 st March, 2007 Balance sheet of Supriya and Minika as on 31 st march 2007 Supriya s capital 32,500 Cash and bank 40,500 Monika s capital 11,500 Stock 7,500 Sundry creditors 48,000 Sundry debtors 21,500 Reserve fund 13,500 Less: PBDD ,000 Fixed assets 36,500 1,05,500 1,05,500 The firm was dissolved on 31 st march Close the books of the firm with the following information: 1) Debtors realised at a discount of 5%. 2) Stock realised at Rs.7,000. 3) Fixed assets realised at Rs.42,000. 4) Realistion expenses of Rs.1,500 5) Creditors are paid in full. Prepare necessary ledger accounts. 2 Sita, Rita and Meeta are partners sharing profits and losses in the ratio of 2:2:1. Their balance sheet as on