39. (Goodwill not appearing in Books/Payment to Retiring Partner made in Equal
Instalments) C, P and S were partners sharing profit in the ratio of 215, 3/10 and 3/10
respectively. Their balance sheet on 31st December, 2018 was follows:
Liabilities
Amount
Assets
Amount
₹
₹
Capitals :
Building
18,000
С
16,000
Plant
14,000
Р
12,000
Motor Car
4,000
S
10,000 38,000 Stock
10,000
Reserve
5,000 Debtors
7,000
Bills payable
2,000 Less : Provision for
Creditors
8,000 Bad Debts
1,000
6,000
Cash at Bank
1,000
53,000
53,000
P retires on that date on the following terms:
(i) The goodwill of the firm is to be valued at 7,000.
(ii) Stock and buildings are to be appreciated by 10%.
(iii) Plant and motor car are to be depreciated by 10%.
(iv). Liability for the payment of gratuity to workers * 2,000 is not yet recorded in the
books, but the same is to be provided for.
(v) Provision for bad debts is no more necessary.
(vi) It is decided not to maintain goodwill account in the books.
(vii) The amount payable to P is to be paid in 3 equal instalments beginnning from 1st
January, 2019 with interest at 10% p.a.
You are required to prepare :
(a) Revaluation account ;
(6) Partner's capital account ;
(c) New balance sheet of C and S; and (d) P's loan account.
Answers
Answer:
39. (Goodwill not appearing in Books/Payment to Retiring Partner made in Equal
Instalments) C, P and S were partners sharing profit in the ratio of 215, 3/10 and 3/10
respectively. Their balance sheet on 31st December, 2018 was follows:
Liabilities
P retires on that date on the following terms:
(i) The goodwill of the firm is to be valued at 7,000.
(ii) Stock and buildings are to be appreciated by 10%.
(iii) Plant and motor car are to be depreciated by 10%.
(iv). Liability for the payment of gratuity to workers * 2,000 is not yet recorded in the
books, but the same is to be provided for.
(v) Provision for bad debts is no more necessary.
(vi) It is decided not to maintain goodwill account in the books.
(vii) The amount payable to P is to be paid in 3 equal instalments beginnning from 1st
January, 2019 with interest at 10% p.a.
You are required to prepare :
(a) Revaluation account ;
(6) Partner's capital account ;
(c) New balance sheet of C and S; and (d) P's loan account.
Explanation:
Amount
Assets
Amount
₹
₹
Capitals :
Building
18,000
С
16,000
Plant
14,000
Р
12,000
Motor Car
4,000
S
10,000 38,000 Stock
10,000
Reserve
5,000 Debtors
7,000
Bills payable
2,000 Less : Provision for
Creditors
8,000 Bad Debts
1,000
6,000
Cash at Bank
1,000
53,000
53,000