TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations

TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations – Here are all the TS Grewal solutions for Class 12 Accountancy Chapter 7. This solution contains questions, answers, images, explanations of the complete Chapter 7 titled Company Accounts Financial Statements of Not-for-Profit Organisations of Accountancy taught in Class 12. If you are a student of Class 12 who is using TS Grewal Textbook to study Accountancy, then you must come across Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations. After you have studied lesson, you must be looking for answers of its questions. Here you can get complete TS Grewal Solutions for Class 12 Accountancy Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations in one place.

TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations

Question 1.
From the following particulars of Evergreen club, prepare Receipts and payments Account for the year ended 31st March,2018:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations - 1
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations - 2

Question 2.
How are the following items shown in the accounts of a Not-for-Profit Organisation ?
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations - 3

Question 3.
How are the following dealt with in the accounts of a Not-for-Profit Organisation ?
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 5

Question 4.
How are the following dealt with while preparing the final accounts of a club?
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 7

Question 5.
From the following information of a club show the amounts of match expenses and match fund in the appropriate Financial Statements of the club for the year ended on 31st March, 2018:
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 9

Question 6.
Show how are the following items dealt with while preparing the final accounts for the year ended 31st March , 2018 of a Not-for-profit Organisation:
Case I: Expenditure on construction of Pavilion is ₹ 6,00,000. The construction work is in progress  and has not yet completed.
Capital Fund as at 31st March , 2017 is ₹ 20,00,000.
Case II: Expenditure on construction of Pavilion is ₹ 6,00,000. The construction work is in progress and has not yet completed.
Pavilion Fund as at 31st March, 2017 is ₹ 10,00,000 and Capital Fund as at 31st March, 2017 is ₹ 20,00,000.
Case III: Expenditure on construction of Pavilion is ₹ 6,00,000. The construction work is in progress and has not yet completed.
Pavilion Fund as at 31st March, 2017 is ₹ 10,00,000, and Capital Fund as at 31st March, 2017 is ₹ 20,00,000 .
Donation Received for Pavilion on 1st January, 2018 is ₹ 5,00,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 10
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 11

Question 7.
How is Entrance Fees dealt with while preparing the final accounts for the year ended 31st March, 2018 in each of the following alternative cases?
Case I: During the year ended 31st March, 2018, Entrance Fees received was ₹ 1,00,000.
Case II: During the year ended 31st March, 2018, Entrance Fees received was ₹ 1,00,000. Out of this ₹ 25,000 was received from individuals whose membership is not yet approved.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 12

Question 8.
In the year ended 31st March, 2018, the subscriptions received by the jaipur Literary Society were ₹ 4,20,000. These subscriptions include ₹ 14,000 received for the year ended 31st March, 2017. On 31st March, 2018, subscriptions due but not received were ₹ 10,000. What amount should be credited to Income and Expenditure Account for the year ended 31st March, 2018 as subscription ?
Solution:
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Question 9.
Subscriptions received during the year ended 31st March, 2018 are:
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There are 450 members, each paying an annual subscription of ₹ 200; ₹ 1,800 were in arrears for the year ended 31st March, 2017.
calculate amount of subscriptions to be credited to Income and Expenditure Account for the year ended 31st March, 2018.
Solution:
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Question 10.
In the year ended 31st March, 2018 subscriptions received by Kings Club, Delhi were ₹ 4,09,000 including ₹ 5,000 for the year ended 31st March, 2017 and ₹ 10,000 for the year ended 31st March, 2019. At the end ₹ 15,000. The subscriptions due but not received at the end of the previous year, i.e., 31st March, 2017 were ₹ 8,000, while subscriptions received in advance on the same date were ₹ 18,000.
Calculate amount of subscriptions to be credited to Income and Expenditure Account for the year ended 31st March, 2018.
Solution:
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Question 11.
From the following information, calculate amount of subscriptions to be credited to the Income and Expenditure Account for the year ended 31st March, 2018:
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Subscriptions received during the year ended 31st March, 2018 – ₹ 3,00,000
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 33
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 34

Question 12.
Calculate amount of subscriptions which will be treated as income for the year ended 31st March, 2018 for each of the following cases:
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 36
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 37
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 38

Question 13.
From the following particulars, calculate amount of subscriptions to be credited to the Income and Expenditure Account for the year ended 31st March, 2018:
(a) Subscriptions in arrears on 31st March, 2017 – ₹ 500
(b) Subscriptions received in advance on 31st March, 2017 for the year ended on 31st March, 2018 – ₹ 1,100
(c) Total Subscriptions received during the year ended 31st March, 2018 – ₹ 35,400
(including ₹ 400 for the year ended 31st March, 2017 ₹ 1,200 for the year ended 31st March, 2019 and ₹ 300 for the year ended 31st March, 2020)
(d) Subscriptions outstanding for year ended 31st March, 2018 – ₹ 400
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 39

Question 14.
Receipts and Payments Account of Friends Club showed that ₹ 6,85,000 were received by way of subscriptions for the year ended on 31st March, 2018.
The additional information was as under:
(a) Subscription outstanding as on 31st March, 2017 were – ₹ 65,000.
(b) Subscription received in advance as on 31st March, 2017 were – ₹ 41,000.
(c) Subscription outstanding as on 31st March, 2018 were – ₹ 54,000.
(d) Subscription received in advance as on 31st March, 2018 were – ₹ 25,000.
Show how the above information would appear in the final accounts for the year ended on 31st March, 2018 of Friends Club.
Solution:
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TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 41

Question 15.
How are the following items of subscriptions shown in the Income and Expenditure Account for the year ended 31st March, 2018 and Balance Sheets as at 31st March, 2017 and 2018 ?
Subscriptions received during the year ended 31st March, 2018 – ₹ 3,58,500
Subscriptions outstanding on 31st March, 2017 – ₹ 30,000
Subscriptions received in Advance on 31st March, 2017 – ₹ 22,500
Subscriptions received in Advance on 31st March, 2018 – ₹ 13,500
Subscriptions outstanding on 31st March, 2018 – ₹ 37,500
(including ₹ 12,500 for the year ended 31st March, 2017)
Solution:
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TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 43

Question 16.
From the following information , calculate amount of subscriptions outstanding for the year ended 31st March, 2018:
A club has 200 embers each paying an annual subscription of ₹ 1,000. The Receipts and Payments Account for the year showed a sum of ₹ 2,05,000 received as subscriptions. The following additional information is provided:
Subscriptions Outstanding on 31st March, 2017 – ₹ 30,000
Subscriptions Received in Advance on 31st March, 2018 – ₹ 40,000
Subscriptions Received in Advance on 31st March, 2017 – ₹ 14,000
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 44

Question 17.
On the basis of information given below, calculate the amount of medicines to be debited to the Income and Expenditure Account of Good Health Hospital for the year ended 31st March, 2018:
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Medicines purchased during the year ended 31st March, 2018 were ₹ 60,80,700.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 46

Question 18.
Calculate amount of medicines consumed during the year ended 31st March, 2018:
Opening Stock of Medicines – ₹ 1,00,000
Opening Creditors for Medicines – ₹ 90,000
Cash purchases of Medicines during the year – ₹ 3,00,000
Closing Stock of Medicines – 1,50,000
Closing Creditors for Medicines – 1,30,000
Solution:
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Question 19.
Calculate amount to be posted to the Income and Expenditure Account for the year ended 31st March, 2018:
(i) Amount paid for stationery during the year ended 31st March, 2018 – ₹ 5,400; Stock of Stationery in Hand on 31st March, 2018 – ₹ 250.
(ii) Stock of Stationery in Hand on 1st April, 2017 – ₹ 1,500; Payment made for Stationery during the year ended 31st March, 2018 – ₹ 5,400; Stock of Stationery in Hand on 31st March, 2018 – ₹ 250.
(iii) Stock of Stationery on 1st April, 2017 – ₹ 1,500
Creditors for Stationery on 1st April, 2017 – ₹ 1,000
Amount paid for Stationery during the year – ₹ 5,400
Stock of Stationery on 31st March, 2018 – ₹ 250
Solution:
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Question 20.
On the basis of the following information, calculate amount that will appear against the term Stationery Used in the Income and Expenditure Account for the year ended 31st March, 2018:
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 31

Question 21.
Calculate the amount that will be posted to the income and Expenditure Account for the year ended 31st March, 2018:
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 52

Question 22.
How are the following dealt with while preparing the final accounts for the year ended 31st March, 2018?
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Additional information:
(i) Sports Materials in Hand on 31st March, 2018 – ₹ 22,000
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 54

Question 23.
How are the following dealt with while preparing the final accounts for the year ended 31st March, 2018?

Solution:
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TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 58

Question 24.
​How are the following dealt with while preparing the final accounts of a sports club for the year ended 31st March, 2018?.
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 60

Question 25.
From the following information of a Not-for-Profit Organisation, show the Sports Materials item in the Income and Expenditure Account for the year ended 31st March, 2018 and Balance Sheets as at 31st March, 2018:
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 62
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 63

Question 26.
The book value of furniture on 1st April, 2017 is ₹ 60,000. Half of this furniture is sold for ₹ 20,000 on 30th September, 2017. Depreciation is to be charged on furniture @ 10% p.a.
Calculate loss on sale of furniture. Show how the loss on sale and depreciation on furniture will be shown in the Income and Expenditure Account for the year ended 31st March, 2018.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 64
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 65

Question 27.
Delhi Youth Club has furniture at a value of ₹ 2,20,000 in its book on 31st March, 2017. It sold old furniture , having book value of ₹ 20,000 as at 1st April, 2017 at a loss of 20% on 31st December, 2017. Furniture is to be depreciated @ 10% p.a. Furniture costing ₹ 1,50,000 was also purchased on 1st October, 2017.
Prepare Furniture Account for the year ended 31st March, 2018.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 66
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 67

Question 28.
In the year ended 31st March, 2018, salaries paid amounted to ₹ 2,04,000. Ascertain the amount chargeable to the Income and Expenditure Account for the year ended 31st March, 2018 from the following additional information:
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 68

Question 29.
How are the following items dealt with while preparing Income and Expenditure Account of a club for the year ended 31st March, 2018?
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Locker Rent received during the year ended 31st March, 2018 – ₹ 52,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 70

Question 30.
Prepare Income and Expenditure Account for the year ended 31st March, 2018 from the following:
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 72

Question 31.
Prepare Income and Expenditure Account from the following Receipts and Payments Account of Delhi Nursing Society for the year ended 31st March, 2018:
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Donation of ₹10,000 received for Building Fund was wrongly included in the Subscriptions Account. A bill of medicines purchased during the year amounted to ₹12,800 was outstanding. Government Grant is not for a specific purpose.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 74

Question 32.
Following is the Receipts and Payments Account of You Bee Forty Club for the year ended 31st March, 2018:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 75
Additional information:
(a) Outstanding Subscriptions for the year ended 31st March, 2018 – ​₹ 55,000.
(b) Outstanding Salaries and Wages – ₹ 40,000.
(c) Depreciate Sports Equipments by 25%.
Prepare Income and Expenditure Account of the club from the above particulars.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 76

Question 33.
From the following Receipts and Payments Account of Jaipur Sports Club, prepare Income and Expenditure Account for the year ended 31st March, 2018:
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 78
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 79

Question 34.
Following is the Receipts and Payments Account of Delhi Football Club for the year ended 31st March, 2018:
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TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 80
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 81
Additional Information:
(i) During the year ended 31st March, 2018, the club had 550 members and each paying an annual subscription of ₹ 100.
(ii) Salaries Outstanding as at 1st April, 2017 were ₹ 10,000 and as at 31st March, 2018 were ₹ 5,000.
Prepare Income and Expenditure Account of the Club for the year ended 31st March, 2018.
Solution:
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TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 83

Question 35.
Following is the information given in respect of certain items of a Sports club. Show these items in the Income and Expenditure Account and the Balance Sheet of the club as at 31st March, 2018:
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Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 85
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 86

Question 36.
Following is the summary of cash transactions of the Royal Club for the year ended 31st March, 2018:
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In the beginning of the year, the club possessed Books of ₹ 2,00,000 and Furniture of ₹ 85,000. Subscriptions in arrears in the beginning of the year amounted to ₹ 3,500 and at the end of the year ₹ 4,500 and six months Rent ₹ 6,000 was due both in the beginning of the year and at the end of the year.
​Prepare Income and Expenditure Account of the club for the year ended 31st March, 2018 and ist Balance Sheet as at that date after writing off ₹ 5,000 and ₹ 11,300 on Furniture and books respectively.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 88
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 89

Question 37.
From the following Receipts and Payments Account of City Club and from the information supplied, prepare Income and Expenditure Account for the year ended 31st March, 2018 and Balance Sheet as at that date:
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(a) The club has 50 members each paying an annual subscription of ₹ 500. Subscriptions Outstanding on 31st March, 2017 were ₹ 6,000.
(b) On 31st March, 2018, Salries Outstanding amounted to ₹ 2,000. Salaries paid in the year ended 31st March, 2018 included ₹ 6,000 for the year ended 31st March, 2017.
(c) On 1st April, 2017, the club owned Building valued at ₹ 2,00,000; Furniture ₹ 20,000 and Books ₹ 20,000.
(d) Provide depreciation on Furniture at 10%.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 91
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 92
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 93

Question 38.
From the following Receipts and Payments Account and additional information given below, prepare Income and Expenditure Account and Balance Sheet of Rural Literacy Society as on 31st March, 2018:
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Additional information:
(i) Subscription outstanding as on 31st March, 2017 ₹ 20,000 and on 31st March, 2018 ₹ 15,000.
(ii) On 31st March, 2018, salary outstanding ₹ 6,000 and one month rent paid in advance.
(iii) On 1st April, 2017, society owned furniture ₹ 1,20,000 and books ₹ 50,000.
Solution:
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TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 96
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 97

Question 39.
Modern Club’s Balance Sheet as at 1st April, 2017 was as under:
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The Receipts and Payments Account for the year ended 31st March, 2018 was:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 99
Subscriptions still to be received are ₹ 5,500 but subscriptions already received include ₹ 4,000 for next year. Salaries still unpaid are ₹ 6,000. Sports Equipments are now valued at ₹ 45,000. Prepare Income and Expenditure Account and the Balance Sheet, after charging 10% depreciation on Billiards Tables.
Solution:
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TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 101

Question 40.
From the following information relating to the Ganesh Cricket Club, prepare Income and Expenditure Account for the year ended 31st March, 2018 and Balance Sheet as at that date. The summary of cash transactions is:
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.TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 103
Subscriptions due on 31st March, 2018 amounted to ₹ 7,500. Write off 50% of Bats, Balls (not considering sale ) and 25% of Printing and Stationery.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 104
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 105

Question 41.
From the following Receipts and Payments Account of Mumbai Theatre Club, prepare Income and Expenditure Account for the year ended 31st March, 2018 and Balance Sheet as at that date.
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Additional information:
(i) Subscriptions in arrear for the year ended 31st March, 2018 – ₹ 9,000 and subscriptions in advance for the year ended 31st March, 2019 – ₹ 3,500.
(ii) Insurance Premium outstanding ₹ 400.
(iii) Miscellaneous expenses prepaid ₹ 900.
(iv) 8% interest has accured oninvestment for five months.
(v) Billiard Table costing ₹ 3,00,000 was purchased during last year and ₹ 2,20,000 were paid for it.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 107
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 108

Question 42.
Following Receipts and Payments Account was prepared from the Cash Book of Delhi Charitable Trust for the year ending 31st March, 2018:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 109
Prepare Income and Expenditure Account for the year ended 31st March, 2018 and Balance Sheet as on that date after the following adjustments:
(i) Insurance premium was paid in advance for three months.
(ii) Interest on investment ₹ 11,000 accrued was not received.
(iii) Rent ₹ 6,000; Salary ₹ 9,000 and advertisement expenses ₹ 10,000 outstanding as on 31st March, 2018.
Solution:
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TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 111
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 112

Question 43.
Given Below is the Receipts and Payments Account of a Mayur Club for the year ended 31st March, 2018:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 113
Prepare club’s Income and Expenditure Account for the year ended 31st March, 2018 and Balance Sheet as at that date after taking the following information into account:
(i) There are 500 members, each paying an annual subscription of ₹ 500, ₹​ 5,000 are still in arrears for the year ended 31st March, 2017.
(ii) Municipal Taxes amounted to ₹​ 4,000 per year is paid up to 30th June and ₹​ 5,000 are outstanding of salaries.
(iii) Building stands in the books at ₹​ 5,00,000.
(iv) 6% interest has accrued on investments for five months.
Solution:
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TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 115
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 116

Question 44.
From the following information  and Receipts and Payments Account of Delhi Medical Society, prepare Income and Expenditure Account for the year ended 31st March, 2018 and Balance Sheet as at that date.
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TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 117
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 118
Other information:
On 31st March, 2017, the club possessed books of ₹ 2,00,000 and Furniture of ₹ 85,000. Provide depreciation on these assets @ 10% including the purchases during the year.
Subscriptions in arrears in the beginning of the year amounted to ₹ 3,500 and at the end of the year ₹ 5,500 were outstanding.
​The Club paid three months rent in advance both in the beginning and at the end of the year.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 119
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 120
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 121

Question 45.
From the following Receipts and Payments Account of Imran Khan club and from the given additional information, prepare Income and Expenditure Account for the year ending 31st December, 2015 and the Balance Sheet as at that date:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 122
Additional Information:
(i) The club had received ₹ 20,000 for subscription in 2014 for 2015.
(ii) Salaries had been paid only for 11 months.
(iii) Stock of sports materials on 31st December, 2014 was ₹ 3,00,000 and on 31st December, 2015 ₹ 6,50,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 123
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 124
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 125

Question 46.
From the following particulars relating to the Ramakrishna Mission Charitable Hospital, prepare Income and Expenditure Account for the year ended
31st March, 2018 and Balance Sheet as at that date.
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 126
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 127
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 128
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 129
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 130

Question 47.
Following is the Receipt and Payment Account of Women’s Welfare Club for the year ended 31st March, 2018:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 145
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 131
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 132
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 133
Prepare Income and Expenditure Account for the year ended 31st March, 2018,and Balance Sheet as on that date.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 134
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 135
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 136

Question 48.
Receipts and Payments Account of Shankar Sports Club is given below, for the year ended 31st March, 2018:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 137
Prepare Income and Expenditure Account and Balance Sheet with the help of following information:
Subscription outstanding on 31st March, 2017 is ₹ 1,200 and ₹ 2,300 on 31st March, 2018; opening stock of postage stamps is ₹ 300 and closing stock is ₹ 200; Rent ₹ 1,500 related to the year ended 31st March, 2017 and ₹ 1,500 is still unpaid. On 1st April, 2017 the club owned furniture ₹ 15,000, Furniture valued at ₹ 22,500 on 31st March, 2018. The club has a loan of ​₹ 20,000(@ 10% p.a.) which was taken in year ended 31st March, 2017.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 138
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 139
TS Grewal Accountancy Class 12 Solutions Chapter 7 Company Accounts Financial Statements of Not-for-Profit Organisations image - 140

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TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm

TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm – Here are all the TS Grewal solutions for Class 12 Accountancy Chapter 6. This solution contains questions, answers, images, explanations of the complete Chapter 6 titled Dissolution of Partnership Firm of Accountancy taught in Class 12. If you are a student of Class 12 who is using TS Grewal Textbook to study Accountancy, then you must come across Chapter 6 Dissolution of Partnership Firm. After you have studied lesson, you must be looking for answers of its questions. Here you can get complete TS Grewal Solutions for Class 12 Accountancy Chapter 6 Dissolution of Partnership Firm in one place.

TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm

Question 1.
What journal entries would you pass in the following cases?
(a) Expenses of realisation ₹ 1,500.
(b) Expenses of realisation ₹ 600 but paid by Mohan, a partner.
(c) Mohan, one of the partners of the firm was asked to look into the dissolution of the firm for which he was allowed a commission of ₹ 2,000.
(d) Motor car of book value ₹ 50,000 taken over by creditors of the book value of ₹ 40,000 in full settlement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 1

Question 2.
Pass journal entries for the following:
(a) Realisation expenses of ₹ 15,000 were to be met by Rahul, a partner but were paid by the firm.
(b) Ramesh, a partner was paid remuneration of ₹ 25,000 and he was to meet all expenses.
(c) Anuj, a partner, was paid remuneration of ₹ 20,000 and he was to meet all expenses. Firm paid an expense of ₹ 5,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 2

Question 3.
Pass journal entries for the following:
(a) Realisation expenses amounted to ₹ 10,000 were paid by the firm on behalf of Alok, a partner, with whom it was agreed at ₹ 7,500.
(b) Realisation expenses amounted to ₹ 5,000. It was agreed that the firm will pay ₹ 2,000 and balance by Ravinder, a partner.
(c) Dissolution expenses amounted to ₹ 10,000 were paid by Amit, a partner, on behalf of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 3

Question 4.
Record necessary journal entries in the following cases:
(a) Creditors worth ₹ 85,000 accepted ₹ 40,000 as cash and Investment worth ₹ 43,000, in full settlement of their claim.
(b) Creditors were ₹ 16,000. They accepted Machinery valued at ₹ 18,000 in settlement of their claim.
(c) Creditors were ₹ 90,000. They accepted Building valued at ₹ 1,20,000 and paid cash to the firm ₹ 30,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 5

Question 5.
Pass journal entries for the following at the time of dissolution of a firm:
(a) Sale of Assets – ₹ 50,000.
(b) Payment of Liabilities – ₹ 10,000.
(c) A commission of 5% allowed to Mr. X, a partner, on sale of assets.
(d) Realisation expenses amounted to ₹ 15,000. The firm had agreed with Amrit, a partner to reimburse him up to ₹ 10,000.
(e) Z, an old customer whose account for ₹ 6,000 was writte off as bad in the previous year paid 60% of the amount written off.
(f) Investment (Book Value ₹ 10,000) realised at 150%.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 5
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 6

Question 6.
Pass journal entries for the following transactions at the time of dissolution of the firm:
(a) Loan of ₹ 10,000 advanced by a partner to the firm was refunded.
(b) X, a partner, takes over an unrecorded asset (Typewriter) at ₹ 300.
(c) Undistributed balance (Debit) of Profit and Loss Account ₹ 30,000. The firm has three partners X, Y and Z.
(d) Assets of the firm realised ₹ 1,25,000.
(e) Y who undertakes to carry out the dissolution proceedings is paid ₹ 2,000 for the same Y.
(f) Creditors are paid ₹ 28,000 in full settlement of their account of ₹ 30,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 7

Question 7.
Pass necessary journal entries for the following transactions on the dissolution of the firm P and Q after the various assets (other than cash) and outside liabilities have been transferred to Realisation Account:
(a) Bank Loan ₹ 12,000 was paid.
(b) Stock worth ₹ 16,000 was taken over by partner Q.
(c) Partner P paid a creditor ₹ 4,000.
(d) An asset not appearing in the books of accounts realised ₹ 1,200.
(e) Expenses of realisation ₹ 2,000 were paid by partner Q.
(f) Profit on realisation ₹ 36,000 was distributed between P and Q in 5 : 4 ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 8

Question 8.
X, Y and Z are partners in a firm sharing profits in the ratio of 3 : 2 : 1 respectively. The firm was dissolved on 1st March, 2013. After transferring assets (other than cash) and third party liabilities to the Realisation Account you are provided with the following information:
(a) There was a balance of ₹ 18,000 in the firm’s Profit and Loss Account.
(b) There was an unrecorded bike of ₹ 50,000 which was taken over by X.
(c) Creditors of ₹ 5,000 were paid ₹ 4,000 in full settlement of accounts.
Pass necessary journal entries for the above at the time of dissolution of firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 9

Question 9.
Pass necessary journal entries to record the following unrecorded assets and liabilities in the books of Paras and Priya:
(a) There was an old furniture in the firm which had been written off completely in the books. This was sold for ₹ 3,000.
(b) Ashish, an old customer whose account for ₹ 1,000 was written off as bad in the previous year paid 60% of the amount.
(c) Paras agreed to takeover the firm’s goodwill (not recorded in the books of the firm) at a valuation of ₹ 30,000.
(d) There was an old typewriter which had been written off completely from the books. It was estimated to realise ₹ 400. It was taken by Priya at an estimated price less 25%.
(e) There were 100 shares of ₹ 10 each in Star Limited acquired at a cost of ₹ 2,000 which had been written-off completely from the books. These shares are valued @ ₹ 6 each and divided among the partners in their profit-sharing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 10

Question 10.
Aman and Harsh were partners in a firm. They decided to dissolve their firm. Pass necessary journal entries for the following after various assets (other than cash and bank) and third party liabilities have been transferred to Realisation Account:
(a) There was furniture worth ₹ 50,000. Aman took over 50% of the furniture at 10% discount and the remaining furniture was sold at 30% profit on book value.
(b) Profit and Loss Account was showing a credit balance of ₹ 15,000 on the date of dissolution.
(c) Harsh’s loan of ₹ 6,000 was discharged at ₹ 6,200.
(d) The firm paid realisation expenses amounting to ₹ 5,000 on behalf of Harsh who had to bear these expenses.
(e) There was a bill for 1,200 under discount. The bill was received from Soham who proved insolvent and a first and final dividend of 25% was received from his estate.
(f) Creditors, to whom the firm owed ₹ 6,000, accepted stock of ₹ 5,000 at a discount of 5% and the balance in cash.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 129
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 10

Question 11.
Rohit, Kunal and Sarthak are partners in a firm. They decided to dissolve their firm. Pass necessary journal entries for the following after various assets (other than Cash and Bank) and the third party liability have been transferred to Realisation Account :
(a) Kunal agreed to pay off his wife’s loan of ₹ 6,000.
(b) Total Creditors of the firm were ₹ 40,000. Creditors worth ₹ 10,000 were given a piece of furniture costing ₹ 8,000 in full and final settlement. Remaining Creditors allowed a discount of 10%.
(c) Rohit had given a loan of ₹ 70,000 to the firm which was duly paid.
(d) A machine which was not recorded in the books was taken over by Kunal at ₹ 3,000, whereas its expected value was ₹ 5,000.
(e) The firm had a debit balance of ₹ 15,000 in the Profit and Loss Account on the date of dissolution.
(f) Sarthak paid the realisation expenses of ₹ 16,000 out of his private funds, who was to get a remuneration of ₹ 15,000 for completing dissolution process and was responsible to bear all the realisation expenses.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 10
Question 12.
Book value of assets ( other than cash and bank) transferred to Realisation Account is ₹ 1,00,000. 50% of the assets are taken over by a partner Atul, at a discount of 20%; 40% of the remaining assets are sold at a profit of 30% on cost 5% of the balance being obsolete realised nothing and remaining assets are handed over to a Creditor in full settlement of his claim.
You are required to record the journal entries for realisation of assets.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 13

Question 13.
Lal and Pal were partners in a firm sharing profits in the ratio of 3 : 7. On 1st April, 2015 their firm was dissolved. After transferring assets (other than cash and outsider’s liabilities to Realisation Account, you are given the following information :
(a) A creditor of ₹ 3,60,000 accepted machinery valued at ₹ 5,00,000 and paid to the firm ₹ 1,40,000.
(b) A second creditor for ₹ 50,000 accepted stock ₹ 45,000 in full settlement of his claim.
(c) A third creditor amounting to ₹ 90,000 accepted ₹ 45,000 in cash and investments worth ₹ 43,000 in full settlement of his claim.
(d) Loss on dissolution was ₹ 15,000.
Pass necessary journal entries for the above transactions in the books of firm assuming that all payments were made by cheque.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 14

Question 14.
Pass the journal entries for the following transactions on the dissolution of the firm of P and Q after various assets (other than cash) and outside liabilities have been transferred to Realisation Account:
(a) Stock ₹ 2,00,000. P took over 50% of stock at a discount of 10%. Remaining stock was sold at a profit of 25% on cost.
(b) Debtors ₹ 2,25,000. Provision for Doubtful Debts ₹ 25,000; ₹ 20,000 of the book debts proved bad.
(c) Land and Building (Book value ₹ 12,50,000) sold for ₹ 15,00,000 through a broker who changed 2% commission.
(d) Machinery (Book value ₹ 6,00,000) was handed over to a creditor at a discount of 10%.
(e) Investment (Book value ₹ 60,000) realised at 125%.
(f) Goodwill of ₹ 75,000 and prepaid fire insurance of ₹ 10,000.
(g) There was an old furniture in the firm which had been written off completely in the books. This was sold for ₹ 10,000.
(h) Z an old customer whose account for ₹ 20,000 was written off as bad in the previous year paid 60%.
(i) P undertook to pay Mrs. P’s loan of ₹ 50,000.
(j) Trade creditors ₹ 1,60,000. Half of the trade creditors accepted Plant and Machinery at an agreed valuation of ₹ 54,000 and cash in full settlement of their claims after allowing a discount of ₹ 16,000.
Remaining trade creditors were paid 90% in final settlement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 15
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 16

Question 15.
What journal entries would be passed for discharge of following unrecorded liabilities on the dissolution of a firm of partners A and B:
(a) There was a contingent liability in respect of bills discounted but not matured of ₹ 18,500. An acceptor of one bill of ₹ 2,500 became insolvent and fifty paise in a rupee was recovered. The liability of the firm on account of this bill discounted and dishonoured has not so far been recorded.
(b) There was a contingent liability in respect of a claim fro damages for ₹ 75,000 such liability was settled for ₹ 50,000 and paid by the partner A.
(c) Firm will have to pay ₹ 10,000 as compensation to an injured employee, which was a contingent liability not accepted by the firm.
(d) ₹ 5,000 for damages claimed by a customer has been disputed by the firm. It was settled at 70% by a compromise between the customer and the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 17

Question 16.
Pass necessary journal entries on the dissolution of a firm in the following cases:
(a) Dharam, a partner, was appointed to look after the process of dissolution at a remuneration of ₹ 12,000 and he had to bear the dissolution expenses. Dissolution expenses ₹ 11,000 were paid by Dharam.
(b) Jay, a partner, was appointed to look after the process of dissolution and was allowed a remuneration of ₹ 15,000. Jay agreed to bear dissolution expenses. Actual dissolution expenses ₹ 16,000 were paid by Vijay, another partner on behalf of Jay.
(c) Deepa, a partner, was to look after the process of dissolution and for this work she was allowed a remuneration of ₹ 7,000. Deepa agreed to bear dissolution expenses. Actual dissolution expenses ₹ 6,000 were paid from the firm’s bank account.
(d) Dev, a partner, agreed to do the work of dissolution for ₹ 7,5000. He took away stock of the same amount as his commission. The stock had already been transferred to Realisation Account.
(e) Jeev, a partner, agreed to do the work of dissolution for which he was allowed a commission of ₹ 10,000. He agreed to bear the dissolution expenses. Actual dissolution expenses paid by Jeev were ₹ 12,000. These expenses were paid by Jeev by drawing cash from the firm.
(f) A debtor of ₹ 8,000 already transferred to Realisation Account agreed to pay the realisation expenses of ₹ 7,800 in full settlement of his account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 18

Question 17.
Ramesh and Umesh were partners in a firm  sharing profits in the ratio of their capitals. On 31st March, 2013, their Balance Sheet was as follows :
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 19
On the above date the firm was dissolved.
(a) Ramesh took over 50% of stock at ₹ 10,000 less then the book value. The remaining stock was sold at a loss of ₹ 15,000. Debtors were realised at a discount of 5%.
(b) Furniture was taken over by Umesh for ₹ 50,000 and machinery was sold for ₹ 4,50,000.
(c) Creditors were paid in full.
(d) There was an unrecorded bill for repairs for ₹ 1,60,000 which was settled at ₹ 1,40,000.
Prepare Realisation Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 20

Question 18.
Balance Sheet of a firm as at 31st March, 2018 , when it was decided to dissolve the same was:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 21
₹19,500 were realised from all assets except Cash at Bank. The cost of winding up came to ₹ 440. X and Y shared profits in the ratio of 2 : 1 respectively.
Prepare Realisation Account and Capital Accounts of Partners.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 130
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 23

Question 19.
Achal and Vichal were partners in a firm sharing profits in the ratio of 3 : 5. On 31st March, 2018 their Balance Sheet was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 23
The firm was dissolved on 1st April, 2018 and the Assets and Liabilities were settled as follows:
(a) Land and Building b realised ₹ 4,30,000.
(b) Debtors realised ₹ 2,25,000 (with interest) and ₹ 1,000 were recovered for Bad Debts written off last year.
(c) There was an Unrecorded Investment which was sold for ₹ 25,000.
(d) Vichal took over Machinery at ₹ 2,80,000 for cash.
(e) 50% of the Creditors were paid ₹ 4,000 less in full settlement and the remaining Creditors were paid full amount.
Pass necessary journal entries for dissolution of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 25
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 26

Question 20.
Bale and Yale are equal partners of a firm. They decide to dissolve their partnership on 31st March,2018 at which date their Balance Sheet stood as:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 131
(a) The assets realised were:
Stock ₹ 22,000; Debtors ₹ 7,500; Machinery ₹ 16,000; Building ₹ 35,00.
(b) Yale took over the Furniture at ₹ 9,000.
(c) Bale agreed to accept ₹ 2,500 in full settlement of his Loan Account.
(d) Dissolution Expenses amounted to ₹ 2,500.
Prepare the:
(i) Realisation Account
(ii) Capital Accounts of Partners
(iii) Bale’s Loan Account
(iv) Bank Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 29

Question 21.
Shilpa, Meena and Nanda decided to dissolve their partnership on 31st March, 2018. Their profit-sharing ratio was 3 : 2 : 1 and their Balance Sheet was as under:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 30
It is agreed as follows:
The stock of value of ₹ 41,660 are taken over by Shilpa for ₹ 35,000 and she agreed to discharge bank loan. The remaining stock was sold at ₹ 14,000 and debtors amounting to ₹ 10,000 realised ₹ 8,000. Land is sold for ₹ 1,10,000. The remaining debtors realised 50% at their book value . Cost of realisation amounted to ₹ 1,200. There was a typewriter not recorded in the books worth of ₹ 6,000 which were taken over by one of the Creditors at this value. Prepare Realisation Account, Partners Capital Accounts, and Cash Account to close the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 31
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 32

Question 22.
A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2018, their Balance Sheet was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 33
The firm was dissolved on 31st March, 2018 and both the partners agreed to the following:
(a) A took Investments at an agreed value of ₹ 8,000. He also agreed to settle Mrs. A’s Loan.
(b) Other assets realised as : Stock – ₹ 5,000; Debtors – ₹ 18,500; Furniture – ₹ 4,500; Plant – ₹ 25,000.
(c) Expenses of realisation came to ₹ 1,600.
(d) Creditors agreed to accept ₹ 37,000 in full settlement of their claims.
Prepare Realisation Account, Partners Capital Accounts and Bank Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 34
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 35
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 36

Question 23.
Balance Sheet of P, Q and R as at 31st March, 2018, who were sharing profits in the ratio of 5 : 3 : 1 was:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 37
The partners dissolved the business. Assets realised Stock – ₹ 23,400; Debtors 50%; Fixed Assets 10% less than their book value. Bills Payable were settled for ₹ 32,000. There was an Outstanding Bill of Electricity ₹ 800 which was paid off. Realisation expenses ₹ 1,250 were also paid.
Prepare Realisation Account, Partner’s Capital Accounts and Bank Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 38
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 39

Question 24.
Vinod, Vijay and Venkat are partners sharing profits and losses in the ratio of 3 : 2 : 1. They decided to dissolve their firm on 31st March, 2018 the date on which their Balance Sheet stood as:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 40
The following additional information is given:
(a) The Investments are taken over by Vinod for ₹ 5,000
(b)
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 41
(c) Expenses on realisation amounted to ₹ 2,000.
Close the books of the firm giving relevant Ledger Accounts.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 42
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 43

Question 25.
P, Q and R were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. They agreed to dissolve their partnership firm on 31st March, 2018. P was deputed to realise the assets and pay the liabilities. He as paid ₹ 1,000 as commission for his services. The financial position of the firm was:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 44
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 45
P took over Investments for ₹ 12,500. Stock and Debtors realised ₹ 11,500. Plant and Machinery were sold to Q for ₹ 22,500 for cash. Unrecorded assets realised ₹ 1,500. Realisation expenses paid amounted to ₹ 900.
Prepare necessary Ledger Accounts to close the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 46
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 47

Question 26.
Ashu and Harish are partners sharing profits and losses as 3 : 2 . They decided to dissolve the firm on 31st March, 2018. Their Balance Sheet on the above date was:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 48
The firm was dissolved on 1st April,2018 and the Assets and Liabilities  were settled as follows:
(a) Land and Building b realised ₹ 4,30,000.
(b) Debtors realised ₹ 2,25,000 (with interest) and ₹ 1,000 were recovered for Bad Debts written off last year.
(c) There was an Unrecorded Investment which was sold for ₹ 25,000.
(d) Vichal took over Machinery at ₹ 2,80,000 for cash.
(e) 50% of the Creditors were paid ₹ 4,000 less in full settlement and the remaining Creditors were paid full amount.
Pass necessary journal entries for dissolution of the firm.
Ashu is to take over the building at ₹ 95,000 and Machinery and Furniture is taken over by Harish at value of ₹ 80,000. Ashu agreed to pay Creditor and Harish agreed to meet Bank overdraft. Stock and Investments are taken by both partner in profit-sharing ratio. Debtors realised for ₹ 46,000, expenses of realisation amounted to ₹ 3,000. Prepare necessary Ledger Accounts.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 49
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 50
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 51

Question 27.
A, B and C were equal partners. On 31st March, 2018, their Balance Sheet stood as:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 52
The firm was dissolved on the above date on the following terms:
(a) For the purpose of dissolution, Investments were valued at ₹ 18,000 and A took over the Investments at this value.
(b) Fixed Assets realised ₹ 29,700 whereas Stock and Debtors realised ₹ 80,000.
(c) Expenses of realisation amounted to ₹ 1,300.
(d) Creditors allowed a discount of ₹ 800.
(e) One Bill receivable for ₹ 1,500 under discount was dishonoured as the acceptor had become insolvent and was unable to pay anything and hence the bill had to be met by the firm.
Prepare Realisation Account, Partner’s Capital Accounts and Cash Account showing how the accounts would finally be settled among the partners.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 53
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 54

Question 28.
A, B and C are in partnership sharing profits and losses in the proportions of 1/2, 1/3 and 1/6 respectively. On 31st March, 2018, they decided to dissolve the partnership and the position of the firm on this date is represented by the following Balance Sheet:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 55
During the course of realisation, a liability under a suit for damages is settled at ₹ 20,000 as against ₹ 5,000 only provided for in the books of the firm.
Land and Building were sold for ₹ 40,000 and the Stock and Sundry Debtors realised ₹ 30,000 and ₹ 42,000 respectively. The expenses of realisation amounted to ₹ 1,200.
There was a car in the firm, which was completely written off from the books. Ir was taken over by A for ₹ 20,000. He also agreed to pay Outstanding Salary of ₹ 20,000 not provided in books.
Prepare Realisation Account, Partners Capital Accounts and Bank Account in the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 56
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 57

Question 29.
A and B are partners in a firm sharing profits and losses in the ratio of 2 : 1. On 31st March, 2018 their Balance Sheet was:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 58
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 59
On that date, the partners decide to dissolve the firm. A took over Investments at an agreed valuation of ₹ 35,000. Other assets were realised as follows:
Sundry Debtors: Full amount. The firm could realise Stock at 15% less and Furniture at 20% less than the book value. Building was sold at ₹ 1,00,000.
Compensation to employees paid by the firm amounted to ₹ 10,000. This liability was not provided for in the above Balance Sheet.
You are required to close the books of the firm by preparing Realisation Account, Partners Capital Accounts and Bank Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 60
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 61

Question 30.
Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively.They dissolve the partnership of the 31st March,2018 when the Balance Sheet of the firm as under:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 62
The Machinery was taken over by Babu for ₹ 45,000, Ashok took over the Investments for ₹ 40,000 and Freehold property took over by Chetan at ₹ 55,000. The remaining Assets realised as follows:
Sundry Debtors ₹ 56,500 and Stock ₹ 36,500. Sundry Creditors were settled at discount of 7%. A office computer, not shown in the books of accounts realised ₹ 9,000. Realisation expenses amounted to ₹ 3,000.
Prepare Realisation Account, Partners Capital Accounts and Bank Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 63
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 64
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 65

Question 31.
X, Y and Z carrying on business as merchants and sharing profits and losses in the ratio of 2 : 2 : 1, dissolved their firm as at 31st March, 2018 on which date their Balance Sheet was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 66
A bill for ₹ 5,000 received from Mohan discounted from bank is not met on maturity.
The assets except Cash at Bank and Investments were sold to a company which paid ₹ 3,25,000 in cash.The Investments were sold and ₹ 56,500 were received. Mohan proved insolvent and a dividend of 50% was received from his estate. Sundry Creditors (including Bills Payable) were paid ₹ 57,500 in full settlement. Realisation Expenses amounted to ₹ 15,000.
Prepare Realisation Account, Partners Capital Accounts and Bank Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 67
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 68

Question 32.
Rita chowdhary and Miss Sobha are partners in a firm, Fancy Garments Exports, sharing profits and losses equally. On 1st April, 2018 the Balance Sheet of the firm was:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 69
The firm was dissolved on the date given above. The following transactions took place:
(a) Mrs. Rita Chowdhary undertook to pay Mr.Chowdhary’s Loan and took over 50% of the Stock at a discount of 20%.
(b) Book Debts realised ₹ 54,000; balance of the Stock was sold off at a profit of 30% on cost.
(c) Sundry Creditors were paid out at a discount of 10%. Bills Payable were paid in full.
(d) Plant and Machinery realised ₹ 75,000. Land and Building ₹ 1,20,000.
(e) Mrs. Rita Chowdhary took over the goodwill of the firm at a valuation of ₹ 30,000.
(f) An unrecorded asset of ₹ 6,900 was handed over to an unrecorded liability of ₹ 6,000 in full settlement.
(g) Realisation expenses were ₹ 5,250.
Show Realisation Account, Partners Capital Accounts and Bank Account in the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 69
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 71
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 72

Question 33.
Following is the Balance Sheet of Arvind and Balbir as at 31st March, 2018:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 73
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 74
The firm was dissolved on the above date under the following arrangement:
(a) Arvind promised to pay off Mrs. Arvind’s Loan and took Stock at ₹ 6,000.
(b) Balbir took half the Investments @ 10% discount.
(c) Book Debts realised ₹ 28,500.
(d) Trade Creditors and Bills Payable were due on average basis of one month after 31st March,but were paid immediately on 31st March @ 2% discount per annum.
(e) Plant realised ₹ 37,500; Building ₹ 60,000; Goodwill ₹ 9,000 and remaining Investments ₹ 6,750.
(f) An old typewriter, written off completely from the firm’s books now estimated to realise ₹ 450. It was taken by Balbir at this estimated price.
(g) Realisation expenses were ₹ 1,500.
Show Realisation Account, Capital Accounts of Partners and Bank Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 75
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 76
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 77

Question 34.
Anju, Manju and Sanju were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 31st March, 2018, their Balance Sheet was:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 78
On this date , the firm was dissolved. Anju was appointed to realise the assets. Anju was to receive 5% commission on the sale of assets (except cash) and was to bear all expenses of realisation.
Anju realised the assets as follows: Debtors ₹ 60,000; Stock ₹ 35,500; Investments ₹ 16,000; Plant 90% of the book value. Expenses of Realisation amounted to ₹ 7,500. Commission received in advance was returned to customers after deducting ₹ 3,000.
Firm had to pay ₹ 8,500 for Outstanding Salary, not provided for earlier, Compensation paid to employees amounted to ₹ 17,000. This liability was not provided for in the above Balance Sheet. ₹ 20,000 had to be paid for Employees Provident Fund.
Prepare Realisation Account, Capital Accounts of Partners and Cash Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 79
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 80
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 81

Question 35.
A, B and C were in partnership sharing profits in the ratio of 7 : 2 : 1 and the Balance Sheet of the firm as at 31st Marc h, 2018 was:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 82
It was agreed to dissolve the partnership as on 31st March, 2018 and the terms of dissolution were-
(a) A to take over the Building at an agreed amount of ₹ 31,500;
(b) B who was to carry on the business to take over the Goodwill, Stock and Debtors at book value, the Patents at ₹ 30,000 and Plant at ₹ 30,000 and Plant at ₹ 5,000. He was also to pay the Creditors;
(c) C to take over shares in X Ltd. at ₹ 15 each and
(d) The shares in Y Ltd.to be divided in the profit-sharing ratio.
Show Ledger Accounts recording the dissolution in the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 83
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 84
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 85

Question 36.
Following is the Balance Sheet of Vishnu, Sanjiv and Sudhir as at 31st March, 2018:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 86
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 87
Profit-sharing ratio of the partners is 5 : 3 : 2. At the above date, the partners decided to dissolve the firm.
The assets were realised as follows:
Bill Receivable were realised at a discount of 5%. All Debtors were good. Stock realised ₹ 22,000. Land and Building realised 40% higher than the book value. Furniture was sold for ₹ 8,000 by auction and auctioneer’s commission amounted to ₹ 500.
Computers were taken by Vishnu for ana greed valuation of ₹ 3,000. Investments were sold in the open market at a price of ₹ 45,000 for which commission of ₹ 600 was paid to the broker.
Bills Payable were paid at full amount. Creditors however agreed to accept 10% less. All other liabilities were paid off at their book value.
The firm retrenched their employees three months before the dissolution of the firm and firm had to pay ₹ 20,000 as compensation.
Prepare Realisation Account, Partners Capital Accounts and Cash Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 88
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 89

Question 37.
A, B and C were partners sharing profits in the ratio of 2 : 2 : 1. They decided to dissolve their firm on 31st March, 2018 when the Balance Sheet was:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 90
Following transactions took place:
(a) A took over Stock at ₹ 36,000. He also took over his wife’s loan.
(b) B took over half of Debtors at ₹ 28,000.
(c) C took over Investments at ₹ 54,000 and half of Creditors at their book value.
(d) Remaining Debtors realised 60% of their book value. Furniture sold for ₹ 30,000; Machinery ₹ 82,000 and Land ₹ 1,20,000.
(e) An unrecorded asset was sold for ₹ 22,000.
(f) Realisation expenses amounted to ₹ 4,000.
Prepare necessary Ledger Accounts to close the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 91
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 92
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 93

Question 38.
Krishna and Arjun are partners in a firm. They share profits in the ratio of 4 : 1. They decided to dissolve the firm on 31st March, 2018 at which date their Balance Sheet stood as:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 94
The realisation shows the following results:
(a) Goodwill was sold for ₹ 1,000.
(b) Debtors were realised at book value less 10%.
(c) Trademarks were realised for ₹ 800.
(d) Machinery and Stock-in-Trade were taken over by Krishna for ₹ 14,400 and ₹ 3,600 respectively.
(e) An unrecorded asset estimated at ₹ 500 was sold for ₹ 200.
(f) Creditors for goods were settled at a discount of ₹ 80. The expenses on realisation were ₹ 800.
Prepare Realisation Account, Partner’s Capital Accounts and Bank Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 95
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 96

Question 39.
There are two partners X and Y in a firm and their capitals are ₹ 50,000 and ₹ 40,000. The creditors are ₹ 30,000. The assets of the firm realise ₹ 1,00,000. How much will X and Y receive ?
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 97
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 98

Question 40.
A, B and C were partners sharing profits int he ratio of 5 : 3 : 2. On 31st March, 2018, A’s Capital and B’s Capital were ₹ 30,000 and ₹ 20,000 respectively but C owed ₹ 5,000 to the firm. the liabilities were ₹ 20,000. The assets of the firm realised ₹ 50,000.
Prepare Realisation Account, Partner’s Capital Accounts and Bank Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 99TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 99TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 99TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 99
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 100

Question 41.
A and B were partners sharing profits and losses as to 7/11th to A and 4/11th to B. They dissolved the partnership on 30th May, 2018. As on that date their capitals were: A ₹ 7,000 and B ₹ 4,000. There were also due on Loan A/c to A ₹ 4,500 and to B ₹ 750. The other liabilities amounted to ₹ 5,000. The assets proved to have been undervalued in the last Balance Sheet and actually realised ₹ 24,000.
Prepare necessary accounts showing the final settlement between partners.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 101
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 102
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 103

Question 42.
A and B dissolve their partnership. Their position as at 31st March, 2018 was:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 104
The balance of A’s Loan Account to the firm stood at ₹ 10,000. The realisation expenses amounted to ₹ 350. Stock realised ₹ 20,000 and Debtors ₹ 25,000. B took a machine at the agreed valuation of ₹ 7,500.
You are required to close the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 105
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 106

Question 43.
Ashok and Kishore were in partnership sharing profits in the ratio of 3 : 1. They agreed to dissolve the firm. The assets (other than cash of ₹ 2,000) of the firm realised ₹ 1,10,000. The liabilities and other particulars on that date were:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 107
You are required to close the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 108
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 109

Question 44.
X, Y and Z entered into a partnership and contributed ₹ 9,000; ₹ 6,000 and ₹ 3,000 respectively. They agreed to share profits and losses equally. The business lost heavily during the very first year and they decided to dissolve the firm. After realising all assets and paying off liabilities , there remained a cash balance of ₹ 6,000.
Prepare Realisation Account and Partner’s Capital Accounts.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 110
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 111

Question 45.
A, B and C started business on 1st April, 2016 with capitals of ₹ 1,00,000; ₹ 80,000 and ₹ 60,000 respectively sharing profits (losses) in the ratio of 4 : 3 : 3. For the year ended 31st March, 2017 the firm suffered a loss of ₹ 50,000. Each of the partners withdrew ₹ 10,000 during the year.
On 31st March, 2017, the firm was dissolved, the creditors of the firm stood at ₹ 24,000 on that date and Cash in Hand was ₹ 4,000. The assets realised ₹ 3,00,000 and Creditors were paid ₹ 23,500 in full settlement of their claims.
Prepare Realisation Account and show your workings clearly.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 112
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 113

Question 46.
A, B and C were in partnership sharing profits and losses in the ratio of 2 : 1 : 1. They decided to dissolve the partnership. On that date of dissolution, Sundry Assets (including cash ₹ 5,000) amounted to ₹ 88,000, assets realised ₹ 80,000 (including an unrecorded asset which realised ₹ 4,000). A contingent liability on account of bills discounted ₹ 8,000 was paid by the firm. The Capital Accounts of A, B and C showed a balance of ₹ 20,000 each.
Prepare Realisation Account, Partners Capital Accounts and Cash Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 114
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 115

Question 47.
On 1st April, 2017, A, B and C commenced business in partnership sharing profits and losses in proportion of 1/2, 1/3 and 1/6 respectively. They paid into their Bank A/c as their capitals ₹ 22,000; ₹ 10,000 by A, ₹ 7,000 by B, ₹ 5,000 by C. During the year , they drew ₹ 5,000; being ₹ 1,900 by A, ₹ 1,700 by B, ₹ 1,400 by C.
On 31st March, 2018, they dissolved their partnership, A taking up Stock at an agreed valuation of ₹ 5,000, B taking up Furniture at ₹ 2,000 and C taking up Debtors at ₹ 3,000. After paying up their Creditors, there remained a balance of ₹ 1,000 at Bank. Prepare necessary accounts showing the distribution of the cash at the Bank and of the further cash brought in by any partner or partners as the case required.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 116
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 117

Question 48.
The partnership between A and B was dissolved on 31st March, 2018. On that date the respective credits to the capitals were A ₹ 1,70,000 and B ₹ 30,000. ₹ 20,000 were owed by B to the firm; ₹ 1,00,000 were owed by the firm to A and ₹ 2,00,000 were due to the Trade Creditors. Profits and losses were shared in the proportions of 2/3 to A, 1/3 to B.
The assets represented by the above stated net liabilities realise ₹ 4,50,000 exclusive of ₹ 20,000 owed by B. The liabilities were settled at book figures. Prepare Realisation Account, Partners Capital Accounts and Cash Account showing the distribution to the partners.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 118
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 119

Question 49.
X and Y were partners sharing profits and losses in the ratio of 3 : 2. They decided to dissolve the firm on 31st March, 2018. On that date their Capitals were X ₹ 40,000 and Y ₹ 30,000. Creditors amounted to ₹ 24,000.
Assets were realised for ₹ 88,500. Creditors of ₹ 16,000 were taken over by X at ₹ 14,000. Remaining Creditors were paid at ₹ 76,500. The cost of realisation came to ₹ 500.
Prepare necessary accounts.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 120
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 121

Question 50.
P, Q and R are three partners sharing profits and losses in the ratio of 3 : 3 : 2 respectively. Their respective capitals are in their profit-sharing proportions. On 1st April, 2017 the total capital of the firm and the balance of General Reserve are ₹ 80,000 and ₹ 20,000 respectively. During the year 2017-18 the firm made a profit of ₹ 28,000 before charging interest on capital @ 5%. The drawings of the partners are P ₹ 8,000; Q ₹ 7,000; and R ₹ 5,000. On 31st March, 2018 their liabilities were ₹ 18,000.
On this date, they decided to dissolve the firm. The assets realised ₹ 1,08,600 and realisation expenses amounted to ₹ 1,800.
Prepare necessary Ledger Accounts to close the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 122
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 123

Question 51.
X, Y and Z entered into partnership on 1st April, 2016. They contributed capital ₹ 40,000, ₹ 30,000 and ₹ 20,000 respectively and agreed to share profits in the ratio of 3 : 2 : 1. Interest on capital was to be allowed @ 15% p.a. and interest on drawing was to be charged at an average rate of 5%. During the two years ended 31st March, 2018, the firm made profit of ₹ 21,600 and ₹ 25,140 respectively before allowing or charging interest on capital and drawings. The drawings of each partner were ₹ 6,000 per year.
On 31st March,2018 the partners decided to dissolve the partnership due to difference of opinion. On that date, the creditors amounted to ₹ 20,000. The assets other than cash ₹ 2,000 realised ₹ 1,21,000. Expenses of dissolution amounted to ₹ 760.
Draw up necessary Ledger Account to close the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 124
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 125
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 126
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 127
TS Grewal Accountancy Class 12 Solutions Chapter 6 Dissolution of Partnership Firm image - 128

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TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement/Death of a Partner

TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement/Death of a Partner – Here are all the TS Grewal solutions for Class 12 Accountancy Chapter 5. This solution contains questions, answers, images, explanations of the complete Chapter 5 titled Retirement/Death of a Partner of Accountancy taught in Class 12. If you are a student of Class 12 who is using TS Grewal Textbook to study Accountancy, then you must come across Chapter 5 Retirement/Death of a Partner. After you have studied lesson, you must be looking for answers of its questions. Here you can get complete TS Grewal Solutions for Class 12 Accountancy Chapter 5 Retirement/Death of a Partner in one place.

TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement / Death of a Partner

Question 1.
A, B and C were partners sharing profits in the ratio of 1/2, 2/5 and 1/10. Find the new ratio of the remaining partners if C retires.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 1

Question 2.
Ram, Mohan and Sohan were partners sharing profits in the ratio of 1/5, 1/3 and 7/15 respectively. Sohan retires and his share was taken by Ram and Mohan in the ratio of 3 : 2. Find out the new ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 2

Question 3.
From the following particulars, calculate new profit-sharing ratio of the partners:
(a) Shiv, Mohan and Hari were partners in a firm sharing profits in the ratio of 5 : 5 : 4. Mohan retired and his share was divided equally between Shiv and Hari.
(b) P, Q and R were partners sharing profits in the ratio of 5 : 4 : 1. P retires from the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 3
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 4

Question 4.
Sita, Geeta and Meeta were partners in a firm sharing profits in the ratio of 7 : 6 : 7. Geeta retired and her share was divided equally between Sita and Meeta. Calculate the new profit-sharing ratio of Sita and Meeta.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 5

Question 5.
R, S and M are partners sharing profits in the ratio of 2/5, 2/5 and 1/5. M decides to retire from the business and his share is taken by R and S in the ratio of 1 : 2. Calculate the new profit-sharing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 6

Question 6.
A, B and C were partners sharing profits in the ratio of 4 : 3 : 2. A retires, assuming B and C will share profits in the ratio of 2 : 1. Determine the gaining ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 7

Question 7.
Kangli, Mangli and Sanvali are partners sharing profits in the ratio of 4 : 3 : 2. Kangli retires . Assuming Mangli and Sanvali will share profits in the future in the ratio of 5 : 3, determine the gaining ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 8

Question 8.
X, Y and Z are partners sharing profits in the ratio of 1/2, 3/10 and 1/5. Calculate the gaining ratio of remaining partners when Y retires from the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 9

Question 9.
(a) W, X, Y and Z are partners sharing profits and losses in the ratio of 1/3, 1/6, 1/3 and 1/6 respectively. Y retires and W, X and Z decide to share the profits and losses equally in future. Calculate gaining ratio.
(b) A, B and C are partners sharing profits and losses in the ratio of 4 : 3 : 2. C retires from the business. A is acquiring 4/9 of C’s share and balance is acquired by B. Calculate the new profit-sharing ratio and gaining ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 10
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 11

Question 10.
Kumar, Lakshya, Manoj and Naresh are partners sharing profits in the ratio of 3 : 2 : 1 : 4. Kumar retires and his share is acquired by Lakshya and Manoj in the ratio of 3 : 2. Calculate new profit-sharing ratio and gaining ratio of the remaining partners.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 12

Question 11.
A, B, C and D were partners in a firm sharing profits in 5 : 3 : 2 : 2 ratio. B and C retired from the firm. B’s share was acquired by D and C’s share was acquired by A. Calculate new profit-sharing ratio of A and D.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 13

Question 12.
A, B and C were partners in a firm sharing profits in 8 : 4 : 3. B retires and his share is taken up equally by A and C. Find the new profit-sharing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 15

Question 13.
A, B and C are partners sharing profits in the ratio of 5 : 3 : 2. C retires and his share is taken up by A. Calculate new profit-sharing ratio of A and B.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 16

Question 14.
P, Q and R are partners sharing profits in the ratio of 7 : 5 : 3. P retires and it is decided that profit-sharing ratio between Q and R will be same as existing between P and Q. Calculate New profit-sharing ratio and Gaining Ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 17

Question 15.
Murli, Naveen and Omprakash are partners sharing profits in the ratio of 3/8, 1/2 and 1/8. Murli retires and surrenders 2/3rd of his share in favour of Naveen and remaining share in favour of Omprakash. Calculate new profit-sharing ratio and gaining ratio of the remaining partners.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 18

Question 16.
A, B and C are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. B decides to retire from the firm. Calculate new profit-sharing ratio of A and C in the following circumstances:
(a) If B gives his share to A and C in the original ratio of A and C.
(b) If B gives his share to A and C in equal proportion.
(c) If B gives his share to A and C in the ratio of 3 : 1.
(d) If B gives his share to A only.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 19
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 20
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 21

Question 17.
L, M and O are partners sharing profits and losses in the ratio of 4 : 3 : 2. M retires and the goodwill is valued at ₹ 72, 000. Calculate M’s share of goodwill and pass the necessary Journal entry for Goodwill. L and O decided to share the future profits and losses in the ratio of 5 : 3.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 22
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 23

Question 18.
P, Q, R and S were partners in a firm sharing profits in the ratio of 5 : 3 : 1 : 1. On 1st January, 2017, S retired from the firm. On S’s retirement the goodwill of the firm was valued at ₹ 4,20,000. The new profit-sharing ratio between P, Q and R will be 4 : 3 : 3.
Showing your working notes clearly, pass necessary journal entry for the treatment of goodwill in the books of the firm on S’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 24

Question 19.
Aparna, Manisha and Sonia are partners sharing profits in the ratio of 3 : 2 : 1. Manisha retires and goodwill of the firm is valued at ₹ 1,80,000. Aparna and Sonia decided to share future profits in the ratio of 3 : 2. Pass necessary journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 25
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 26

Question 20.
Hanny, Pammy and Sunny are partners sharing profits in the ratio of 3 : 2 : 1. Goodwill is appearing in the books at a value of ₹ 60,000. Pammy retires and at the time of Pammy’s retirement, goodwill is valued at ₹ 84,000. Hanny and Sunny decided to share future profits in the ratio of 2 : 1. Record the necessary journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 27

Question 21.
A, B and C are partners sharing profits in the ratio of 3 : 2 : 1. B retired and the new profit-sharing ratio between A and C was 2 : 1. On B’s retirement, the goodwill of the firm was valued at ₹ 90,000. Pass necessary journal entry for the treatment of goodwill on B’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 28
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 29

Question 22.
X, Y and Z are partners sharing profits in the ratio of 3 : 2 : 1. Goodwill is appearing in the books at a value of ₹ 60,000. Y retires and at the time of Y’s retirement, goodwill is valued at ₹ 84,000. X and Z decide to share future profits in the ratio of 2 : 1. Pass the necessary journal entries through Goodwill Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 30
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 31

Question 23.
A, B and C are partners sharing profits in the ratio of 4/9 : 3/9 : 2/9. B retires and his capital after making adjustments for reserves and gain (profit) on revaluation stands at ₹ 1, 39, 200. A and C agreed to pay him ₹ 1,50,000 in full settlement of his claim. Record necessary journal entry for adjustment of goodwill if the new profit-sharing ratio is decided at 5 : 3.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 32
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 33

Question 24.
M, N and O are partners in a firm sharing profits in the ratio of 3 : 2 : 1. Goodwill has been valued at ₹ 60,000. On N’s retirement, M and O agree to share profits equally. Pass the necessary journal entry for treatment of N’s share of goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 34
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 35

Question 25.
A, B, C and D are partners in a firm sharing profits in the ratio of 2 : 1 : 2 : 1. On the retirement of C, Goodwill was valued ₹ 1,80,000. A, B and D decide to share future profits equally. Pass the necessary journal entry for the treatment of goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 36
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 37

Question 26.
A, B and C were partners in a firm sharing profits in the ratio of 6 : 5 : 4. Their capitals were A – ₹ 1,00,000; B – ₹ 80,000 and C – ₹ 60,000 respectively. On 1st April, 2009, A retired from the firm and the new profit sharing ratio between B and C was decided as 1 : 4. On A’s retirement, the goodwill of the firm was valued at ₹ 1,80,000. Showing your calculations clearly, pass the necessary journal entry for the treatment of goodwill on A’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 38
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 39

Question 27.
X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. Z retires and on the date of his retirement, the following adjustments were agreed upon:
(a) The value of Furniture is to be increased by ₹ 12,000.
(b) The value of stock to be decreased by ₹ 10,000.
(c) Machinery of the book value of ₹ 50,000 is to be depreciated by 10%.
(d) A Provision for Doubtful Debts @ 5% is to be created on debtors of book value of ₹ 40,000.
(e) Unrecorded Investment worth ₹ 10,000.
(f) An item of ₹ 1,000 included in bills payable is not likely to be claimed, hence should be written back.
Pass necessary journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 40
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 41

Question 28.
A, B and C were partners, sharing profits and losses in the ratio of 2 : 2 : 1. B decides to retire on 31st March, 2018. On the date of his retirement, some of the assets and liabilities appeared in the books as follows:
Creditors – ₹ 70,000; Building – ₹ 1,00,000; Plant and Machinery – ₹ 40,000; Stock of Raw Material – ₹ 20,000; Stock of Finished Goods – ₹ 30,000 and Debtors – ₹ 20,000.
The following was agreed among 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 of Raw Materials too be valued at ₹ 18,000 and Finished Goods at ₹ 35,000.
(e) An Old Computer previously written off was sold for ₹ 2,000 as scrap.
(f) Firm had to pay ₹ 5,000 to an injured employee.
Pass necessary journal entries to record the above adjustments and prepare the Revaluation Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 42
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 43

Question 29.
Ramesh wants to retire from the firm. The gain (profit) on revaluation on that date was ₹ 12,000. Mohan and Rahul want to share this in their new profit-sharing ratio of 3 : 2. Ramesh wants this to be shared equally. How is the profit to be shared ? Give reasons.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 44
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 45

Question 30.
X, Y and Z are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Z retires from the firm on 31st March, 2018. On the date of Z’s retirement, the following balances appeared in the books of the firm:
General Reserve – ₹ 1,80,000
Profit and Loss Account (Dr.) – ₹ 30,000
Workmen Compensation Reserve – ₹ 24,000, which was no more required
Employees Provident Fund – ₹ 20,000.
Pass necessary journal entries for the adjustment of these items on Z’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 46
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 47

Question 31.
Asha, Naveen and Shalini were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Goodwill appeared in their books at a value of ₹ 80,000 and General Reserve at ₹ 40,000. Naveen decided to retire from the firm. On the date of his retirement, goodwill of the firm was valued at ₹ 1,20,000. The new profit ratio decided among Asha and Shalini is 2 : 3.
Record necessary journal entries on Naveen’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 48
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 49

Question 32.
Ram, Laxman and Bharat are partners sharing profits in the ratio of 3 : 2 : 1. Goodwill is appearing in the books at a value of ₹ 1,80,000. Laxman retires and at the time of his retirement, goodwill is valued at ₹ 2,52,000. Ram and Bharat decided to share future profits in the ratio of 2 : 1. The Profit for the first year after Laxman’s retirement amount to ₹ 1,20,000. Give the necessary journal entries to record goodwill and to distribute the profit. Show your calculations clearly.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 50
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 51

Question 33.
The Partnership Deed of C and D, who are equal partners has a clause that any partner may retire from the firm on the following terms by giving a six-month notice in writing:
The retiring partner  shall be paid-
(a) the amount  standing to the credit of his Capital Account and Current Account.
(b) His share of profits to the date of retirement, calculated on the basis of the average profit of the three preceding completed years.
(c) half the amount of the goodwill of the firm calculated at 1\(\frac { 1 }{ 2 }\) times the average profit of the three preceding completed years.
C gave a notice on 31st March, 2017 to retire on 30th September 2017, when the balance of his Capital Account was ₹ 6,000 and his Current Account (DR.) ₹ 500. The profits for the three preceding completed years were : year ended 31st March, 2015 – ₹ 2,800; year ended 31st March, 2016 – ₹ 2,200 and year ended 31st March, 2017 – ₹ 1,600. What amount is due to C in accordance with the partnership agreement?
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 52
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 53
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 54

Question 34.
X, Y and Z were partners in a firm sharing profits in the ratio of 2 : 2 : 1. Their Balance Sheet as at 31st March, 2018 was:

Y retired on 1st April, 2018 on the following terms:
(a) Goodwill of the firm was valued at ₹ 70,000 and was not to appear in the books.
(b) Bad Debts amounted to ₹ 2,000 were to be written off.
(c) Patents were considered as valueless.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of X and Z after Y’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 55
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 56
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 57
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 58

Question 35.
Kanika, Disha and Kabir were partners sharing profits in the ratio of 2 : 1 : 1. On 31st March, 2016, their Balance Sheet was as under:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 59
Kanika retired on 1st April, 2016. For this purpose, the following adjustments were agreed upon:
(a) Goodwill of the firm was valued at 2 years purchase of average profits of three completed years preceding the date of retirement. The profits for the year:
2013-14 were ₹ 1,00,000 and for 2014-15 were ₹ 1,30,000.
(b) Fixed Assets were to be increased to ₹ 3,00,000.
(c) Stock was to be valued at 120%.
(d) The amount payable to Kanika was transferred to her Loan Account.
​Prepare Revaluation Account, Capital Accounts of the partners and the Balance Sheet of the reconstituted firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 60
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 61

Question 36.
The Balance Sheet of X, Y and Z who were sharing profits in proportion to their capitals stood as follows at 31st March, 2018:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 62
Y retires on 1st April, 2018 and the following readjustments were agreed upon:
(a) Out of insurance premium which was debited to the Profit and Loss Account ₹ 1,500 be carried forward as Unexpired Insurance.
(b) The Provision for Doubtful Debts be brought up to 5% o Debtors.
(c) The Land and Building be appreciated by 20%.
(d) A provision of ₹ 4,000 be made in respect of outstanding bills for repairs.
(e) The goodwill of the entire firm be fixed at ₹ 21,600.
Y’s share of goodwill be adjusted to that of X and Z whoa re going to share in future profits in the ratio of 3 : 1.
Pass necessary journal entries and give the Balance Sheet after Y’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 63
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 64
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 65
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 66

Question 37.
N, S and G were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 5. On 31st March, 2016 their Balance Sheet was as under:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 67
G retired on the above ate and it was agreed that:
(a) Debtors of ₹ 6,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts will be maintained.
(b) Patents will be completely written off and stock, machinery and building will be depreciated by 5%.
(c) An unrecorded creditor of ₹ 30,000 will be taken into account.
(d) N and S will share the future profits in 2 : 3 ratio.
(e) Goodwill of the firm on G’s retirement was valued at ₹ 90,000.
Pass necessary journal entries for the above transactions in the books of the firm on G’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 68
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 69
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 70

Question 38.
A, B and C are partners in a firm, sharing profits and losses as A 1/3, B 1/2 and C 1/6 respectively. The Balance Sheet of the firm as at 31st March, 2018 was:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 71
C retires on 1st April, 2018 subject to the following adjustments:
(a) Goodwill of the firm be valued at ₹ 24,000. C’s share of goodwill be adjusted into the account of A and B who are going to share in future in the ratio of 3 : 2.
(b) Plant and Machinery to be depreciated by 10% and Furniture by 5%.
(c) Stock to be appreciated by 15% and Factory Building by 10%.
(d) Provision for Doubtful Debts to be raised to ₹ 2,000.
You are required to pass journal entries to record the above transactions in the books of the firm and show the Profit and Loss Adjustment Account, Capital Account of C and the Balance Sheet of the firm after C’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 72
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 73
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 74
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 75
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 76
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 77
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 78
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 79

Question 39.
X, Y and Z were in partnership sharing profits and losses in the proportions of 3 : 2 : 1. On 1st April, 2018 Y retires from the firm. On that date, their Balance Sheet was:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 80
The terms were:
(a) Goodwill of the firm was valued at ₹ 13,500 and adjustment in this respect was to be made in the continuing Partners Capital Accounts without raising Goodwill Account.
(b) Expenses Owing to be brought down to ₹ 3,750.
(c) Machinery and Loose Tools are to be valued @ 10% less than their book value.
(d) Factory Premises are to be revalued at ₹ 24,300.
Show Revaluation Account, Partners Capital Accounts and prepare the Balance Sheet of the firm after the retirement of Y.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 81
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 82
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 83

Question 40.
Pankaj, Naresh and Saurabh are partners sharing profits in the ratio of 3 : 2 : 1. On 31st March, 2018, Naresh retired from the firm due to his illness. On that date, Balance Sheet of the firm was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 84
Additional Information:
(a) Premises have appreciated by 20%, stock depreciated by 10% and provision for doubtful debts was to be made 5% on debtors. Further provision for legal damages is to be made for ₹ 1,200 and furniture to be brought up to ₹ 45,000.
(b) Goodwill of the firm be valued at ₹ 42,000.
(c) ₹ 26,000 from Naresh’s Capital Account be transferred to his Loan Account and balance be paid through bank: if required, necessary loan may be obtained from bank.
(d) New profit-sharing ratio of Pankaj and Saurabh is decided to be 5 : 1.
Give the necessary Ledger Accounts and Balance Sheet of the firm after Naresh’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 85
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 86TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 87

Question 41.
X, Y and Z are partners sharing profits in the ratio of 4 : 3 : 2. Their Balance Sheet as at 31st March, 2018 stood as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 88
Y having given notice to retire from the firm, the following adjustments in the books of the firm were agreed upon:
(a) That the Land and Building be appreciated by 10%.
(b) That the Provision for Doubtful Debts is no longer necessary since all the debtors are considered good.
(c) That the stock be appreciated by 20%.
(d) That the adjustment be made in the accounts to rectify a mistake previously committed whereby Y was credited in excess by ₹ 810, while X and Z were debited in excess of ₹ 420 and ₹ 390 respectively.
(e) Goodwill of the firm be fixed at ₹ 5,400 and Y’s share of the same be adjusted to that of X and Z who were going to share in the ratio of 2 : 1.
(f) It was decide by X and Y to settle Y’s account immediately on his retirement.
You are required to show:
(i) Revaluation Account
(ii) Partner’s Capital Accounts and
(iii) Balance Sheet of the firm after Y’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 89TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 89TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 89
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 90
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 91

Question 42.
A, B and C are partners sharing profits and losses in the ratio of 4 : 3 : 3 respectively. Their Balance Sheet as at 31st March, 2018 is:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 92
On 1st April, 2018, B retires from the firm on the following terms:
(a) Goodwill of the firm is to be valued at ₹ 14,000.
(b) Stock, Land and Building are to be appreciated by 10%.
(c) Plant and Machinery and Electronic Typewriter are to be depreciated by 10%.
(d) Sundry Debtors are considered to be good.
(e) There is a liability of ₹ 2,000 for the payment of outstanding salary to the employee of the firm. This liability has not been shown in the above Balance Sheet but the same is to be recorded now.
(f) Amount payable to B is to be transferred to his Loan Account.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of A and C after B’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 93
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 94
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 95

Question 43.
Following is the Balance Sheet of X, Y and Z as at 31st March, 2018. They shared profits in the ratio of 3 : 3 : 2.
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 96
On 1st April, 2018, Y decided to retire from the firm on the following terms:
(a) Stock to be depreciated by ₹ 12,000.
(b) Advertisements Suspense Account to be written off.
(c) Provision for Doubtful Debts to be increased to ₹ 6,000.
(d) Fixed Assets be appreciated by 10%.
(e) Goodwill of the firm, valued at ₹ 80,000 and the amount due to the retiring partners to be adjusted in X’s and Z’s Capital Accounts.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet to give effect to the above.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 97
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 98
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 99
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 100

Question 44.
X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. The Balance Sheet of the firm as at 31st March, 2018 stood as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 101
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 102
Z retired on the above date on the following terms:
(a) Goodwill of the firm is to be valued at ₹ 34,800.
(b) Value of Patents is to be reduced by 20% and that of machinery to 90%.
(c) Provision for Doubtful Debts is to be created @ 6% on debtors.
(d) Z took over the investment at market value.
(e) Liability for Workmen Compensation to the extent of ₹ 750 is to be created.
(f) A liability of ₹ 4,000 included in creditors is not to be paid.
(g) Amount due to Z to be settled on the following basis:
₹ 5,067 to be paid immediately, 50% of the balance within one year and the balance by a Bill of Exchange (without interest) at 3 Months.
Give necessary journal entries for the treatment of goodwill, prepare Revaluation Account, Capital Accounts and the Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 103
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 104
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 105

Question 45.
X, Y and Z are partners in a firm sharing profits in the ratio of 3 : 2 : 1. On 1st April, 2009, Y retires from the firm. X and Z agree that the capital of the new firm shall be fixed at ₹ 2,10,000 in the profit-sharing ratio. The Capital Accounts of X and Z after all adjustments on the date of retirement showed balance of ₹ 1,45,000 and ₹ 63,000 respectively. State the amount of actual cash to be brought in or to be paid to the partners.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 106

Question 46.
On 31st March, 2018 , The Balance Sheet of A, B and C who were sharing profits and losses in proportion to their capitals stood as:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 107
B retires and following readjustments of assets and liabilities have been agreed upon before ascertainment of the amount payable to B:
(a) Out of the amount of insurance premium which was debited to Profit and Loss Account, ₹ 1,000 be carried forward for Unexpired insurance.
(b) Freehold Premises be appreciated by 10%.
(c) Provision for Doubtful Debts is brought up to 5% on Debtors.
(d) Machinery be depreciated by 5%.
(e) Liability for Workmen Compensation to the extent of ₹ 1,500 would be created.
(f) That the goodwill of the entire firm be fixed at ₹ 18,000 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 3/4th and 1/4th respectively.
(g) Total capital of the firm as newly constituted be fixed at ₹ 60,000 between A and C in the proportion of 3/4th and 1/4th after passing entries in their accounts for adjustments, i.e., actual cash to be paid or to be brought in by continuing partners as the case may be.
(h) B be paid ₹ 5,000 in cash and the balance be transferred to his Loan Account.
Prepare Capital Accounts of Partners and the Balance Sheet of the firm of A and C.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 108
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 109
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 110

Question 47.
Amit, Balan and Chander were partners in a firm sharing profits in the proportion of 1/2, 1/3 and 1/6 respectively. Chander retired on 1st April, 2014. The Balance Sheet of the firm on the date of Chander’s retirement was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 111
It was agreed that:
(i) Goodwill be valued at ₹ 27,000.
(ii) Depreciation of 10% was to be provided on Machinery.
(iii) Patents were to be reduced by 20%.
(iv) Liability on account of Provident Fund was estimated at ₹ 2,400.
(v) Chander took over Investments for ₹ 15,800.
(vi) Amit and Balan decided to adjust their capitals in proportion of their profit-sharing ratio by opening Current Accounts.
Prepare Revaluation Account and Partners Capital Accounts on Chander’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 112
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 113

Question 48.
J, H and K were partners in a firm sharing profits in the ratio of 5 : 3 : 2. On 31st March, 2015, their Balance Sheet was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 114
On the above date, H retired and J and K agreed to continue the business on the following terms:
(i) Goodwill of the firm was valued at ₹ 1,02,000.
(ii) There was a claim of ₹ 8,000 for workmen’s compensation.
(iii) Provision for bad debts was to be reduced by ₹ 2,000.
(iv) H will be paid ₹ 14,000 in cash and balance will be transferred in his Loan Account which will be paid in four equal yearly installments together with interest @ 10% p.a.
(v) The new profit-sharing ratio between J and K will be 3 : 2 and their capitals will be in their new profit-sharing ratio. The capital adjustments will be done by opening Current Accounts.
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 115
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 116
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 117

Question 49.
X, Y and Z are partners in a firm sharing profits in the ratio of 3 : 1 : 2. On 31st March, 2018, their Balance Sheet was:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 118
Z retires from the business and the partners agree to the following:
(a) Freehold Premises and Stock are to be appreciated by 20% and 15% respectively.
(b) Machinery and Furniture are to be depreciated by 10% and 7% respectively.
(c) Provision for Doubtful Debts is to be increased to ₹ 1,500.
(d) Goodwill of the firm is valued at ₹ 21,000 on Z’s retirement.
(e) The continuing partners have decided to adjust their capitals in their new profit-sharing ratio after retirement of Z. Surplus/deficit, if any, in their Capital Accounts will be adjusted through Current Accounts.
Prepare necessary Ledger Accounts and draw the Balance Sheet of the reconstituted firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 119
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 120
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 121

Question 50.
X, Y and Z are partners sharing profits in the ratio of 5 : 3 : 7. X retires from the firm. Y and Z decided to share future profits in the ratio of 2 : 3. The adjusted Capital Accounts of Y and Z showed balance of ₹ 49, 500 and ₹ 1,05,750 respectively. The total amount to be paid to X is ₹ 1,35,750. This amount is to be paid by Y and Z in such a way that their capitals become proportionate to their new profit-sharing ratio. Calculate the amount to be brought in or to be paid to partners.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 122

Question 51.
The Balance Sheet of X, Y and Z who shared profits in the ratio of 5 : 3 : 2 as on 31st March, 2018 was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 123
Y retired on the above date and it was agreed that:
(i) Goodwill of the firm is valued at ₹ 1,12,500 and Y’s share of it be adjusted into the accounts of X and Z who are going to share future profits in the ratio of 3 : 2.
(ii) Fixed Assets be appreciated by 20%.
(iii) Stock be reduced to ₹ 75,000.
(iv) Y be paid amount brought in by X and Z in such a way as to make their capitals proportionate to their new profit-sharing ratio.
Prepare Revaluation Account, Capital Accounts of all partners and the Balance Sheet of the New Firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 124
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 125
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 126

Question 52.
X, Y and Z are partners sharing profits in the ratio of 5 : 3 : 2. Y retires on 1st April, 2018 from the firm, on which date capitals of X, Y and Z after all adjustments are ₹ 1,03,680, ₹ 87,840 and ₹ 26,880 respectively. The Cash and Bank Balance on that date was ₹ 9,600. Y is to be paid through amount brought in by X and Z in such a way as to make their capitals proportionate to their new profit-sharing ratio which will be X 3/5 and Z 2/5. Calculate the amount to be paid or to be brought in by the continuing partners assuming that a minimum Cash and Bank Balance of ₹ 7,200 was to be maintained and pass the necessary journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 127

Question 53.
A, B and C are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Their Balance Sheet as at 31st March, 2018 is:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 128
Z is admitted as a new partner on 1st April, 2018 on the following terms:
(a) Provision for doubtful debts is to be maintained at 5% on Debtors.
(b) Outstanding rent amounted to ₹ 15,000.
(c) An accrued income of ₹ 4,500 does not appear in the books of the firm. It is now to be recorded.
(d) X takes over the Investments at an agreed value of ₹ 18,000.
(e) New Profit-sharing Ratio of partners will be 4 : 3 : 2.
(f) Z will bring in ₹ 60,000 as his capital by cheque.
(g) Z is to pay an amount equal to his share in firm’s goodwill valued at twice the average profits of the last three years which were ₹ 90,000 ; ₹ 78,000 and ₹ 75,000 respectively.
(h) Half of the amount of the goodwill is to be withdrawn by X and Y.
You are required to pass journal entries, prepare Revaluation Account, Partners Capital and Current Accounts and the Balance Sheet of the new firm.
B retires on 1st April, 2018 on the following terms:
(a) Provision for Doubtful Debts be raised by ₹ 1,000.
(b) Stock to be depreciated by 10% and Furniture by 5%.
(c) Their is an outstanding claim of damages of ₹ 1,100 and it is to be provided for.
(d) Creditors will be written back by ₹ 6,000.
(e) Goodwill of the firm is valued at ₹ 22,000.
(f) Bills paid in full with the cash brought in by A and C in such a manner that their capitals are in proportion to their profit-sharing ratio and Cash in Hand remains at ₹ 10,000.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of A and C.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 129
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 130
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 131

Question 54.
Following is the Balance Sheet of Kusum, Sneh and Usha as on 31st March, 2018, who have agreed to share profits and losses in proportion of their capitals:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 132
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 133
On 31st March, 2018, Kusum retired from the firm and the remaining partners decided to carry on the business. It was agreed to revalue the assets and reassess the liabilities on that date, on the following basis:
(a) Land and Building be appreciated by 30%.
(b) Machinery be depreciated by 30%.
(c) There were Bad Debts of ₹ 35,000.
(d) The claim against Workmen Compensation Reserve was estimated at ₹ 15,000.
(e) Goodwill of the firm was valued at ₹ 2,80,000 and Kusum’s share of goodwill was adjusted against the Capital Accounts of the continuing partners Sneh and Usha who have decided to share future profits in the ratio of 3 : 4 respectively.
(f) Capital of the new firm in total will be the same as before the retirement of Kusum and will be in the new profit-sharing ratio of the continuing partners.
(g) Amount due to Kusum be settled by paying ₹ 1,00,000 in cash and balance by transferring to her Loan Account which will be paid later on.
Prepare Revaluation Account, Capital Accounts of Partners and Balance Sheet of the new firm after Kusum’s retirement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 134
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 135
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 136
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 137

Question 55.
The Balance Sheet of X, Y and Z who were sharing profits in the ratio of 5 : 3 : 2 as at 31st March, 2018 is as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 138
X retired on 31st March, 2018 and Y and Z decided to share profits in future in the ratio of 3 : 2 respectively.
The other terms on retirement were:
(a) Goodwill of the firm is to be valued at ₹ 80,000.
(b) Fixed Assets are to be depreciated to ₹ 57,500.
(c) Make a Provision for Doubtful Debts at 5% on Debtors.
(d) A liability for claim, included in Creditors for ₹ 10,000 is settled at ₹ 8,000.
The amount to be paid to X by Y and Z in such a way that their Capitals are proportionate to their profit-sharing ratio and leave a balance of ₹ 15,000 in the Bank Account.
Prepare Profit and Loss Adjustment Account and Partners Capital Accounts.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 139
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 140
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 141
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 142

Question 56.
A, B and C are partners sharing profits in the ratio of 5 : 3 : 2. Their Balance Sheet as on 31st March, 2018 is given below:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 143
C retires on 30th June, 2018 and it was mutually agreed that:
(a) Building be valued at ₹ 22,00,000.
(b) Investments to be valued at ₹ 3,00,000.
(c) Stock be taken at ₹ 8,00,000.
(d) Goodwill of the firm be valued at two years purchase of the average profit of the past five years.
(e) C’s share of profits up to the date of retirement be calculated on the basis of average profit of the preceding three years.
The profits of the preceding  five years were as under:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 144
(f) Amount payable to C to be transferred to his Loan Account carrying interest @ 10% p.a.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet as at 30th June, 2018.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 145
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 146
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 147

Question 57.
Kumar,Verma and Naresh were partners in a firm sharing profits and Loss in the ratio of 3 : 2 : 2. On 23rd January, 2015 Verma died. Verma’s share of profit till the date of his death was calculated at ₹ 2,350. Pass necessary journal entry for the same in the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 148

Question 58.
A, B and C were partners sharing profits and losses in the ratio of 2 : 2 : 1. C died on 30th June, 2018. Profit and Sales for the year ended 31st March, 2018 were ₹ 1,00,000 and ₹ 10,00,000 respectively. Sales during April to June, 2018 were ₹ 1,50,000. You are required to calculate share of profit of C up to the date of his death.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 149

Question 59.
A, B and C are partners sharing profits and losses in the ratio of 3 : 2 : 1. B died on 30th June, 2018. For the year ended 31st March, 2019, proportionate profit of 2018 is to be taken into consideration. During the year ended 31st March, 2018, bad debts of ₹ 2,000 had to be adjusted. The profit for the year ended 31st March, 2018 was ₹ 14,000 before adjustment of bad debts. Calculate B’s share of profit till the date of his death.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 150

Question 60.
Ram, Manohar and Joshi were partners in a firm. Joshi died on 31st May, 2018. 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 of profits before death. Profits for the years ended 31st March, 2016, 2017 and 2018 were ₹ 7,000; ₹ 8,000 and ₹ 9,000 respectively. Calculate Joshi’s share of profit till the date of his death and pass necessary journal entry for the same.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 151
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 152

Question 61.
X, Y and Z were partners sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Y died on 30th June, 2018. The Profit from 1st April, 2018 to 30th June, 2018 amounted to ₹ 3,60,000. X and Z decided to share the future profits in the ratio of 3 : 2 respectively with effect from 1st July, 2018. Pass the necessary journal entries to record Y’s share of profit up to the date of death.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 153

Question 62.
X, Y and Z were partners in a firm. Z died on 31st May, 2018. 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 ₹ 19,000 and ₹ 17,000 respectively.
Calculate Z’s share of profit till his death and pass necessary journal entry for the same assuming:
(a) there is no change in profit-sharing ratio of remaining partners, and
(b) there is change in profit-sharing ratio of remaining partners, new ratio being 3 : 2.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 154
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 155

Question 63.
P, R and S are in partnership sharing profits 4/8, 3/8 and 1/8 respectively. It is provided in the Partnership Deed that on the death of any partner his share of goodwill is to be valued at one-half of the net profit credited to his account during the last four completed years.
R died on 1st January, 2018. The firm’s profits for the last four years ended 31st December, were as:
2014 – ₹ 1,20,000; 2015 – ₹ 80,000; 2016 – ₹ 40,000; 2017 – ₹ 80,000.
(a) Determine the amount that should be credited to R in respect of his share of Goodwill.
(b) Pass journal entry without raising Goodwill Account for its adjustment.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 156
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 157

Question 64.
X, Y and Z were partners in a firm sharing profit in 3 : 2 : 1 ratio. The firm closes its books on 31st March every year. Y died on 30th June, 2018. On Y’s death the goodwill of the firm was valued at ₹60,000. Y’s share in the profits of the firm till the time of his death was to be calculated on the basis of previous year’s profit which was ₹ 1,50,000.
Pass necessary journal entries for the treatment of goodwill and Y’s share of profit at the time of his death.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 158
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 159

Question 65.
X, Y and Z were partners in a firm sharing profits in the ratio of 4 : 3 : 1. The firm closes its books on 31st March every year. On 1st February 2018, Y died and it was decided that the new profit-sharing ratio between X and Z will be equal. Partnership Deed provided for the following on the death of a partner:
(a) His share of goodwill be calculated on the basis of half of the profits credited to his account during the previous four completed years. The firm’s profits for the last four years were:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 160

(b) His share of profit in the year of his death was to be computed on the basis of average profit of past two years.
Pass necessary journal entries realting to goodwill and profit to be transferred to Y’s Capital Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 161
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 162

Question 66.
X and Y are partners. The Partnership Deed provides inter alia:
(a) That the Accounts be balanced on 31st March every year.
(b) That the profits be divided as : X one-half, Y one-third and carried to a Reserve one-sixth.
(c) That in the event of the death of a partner, his Executors be entitled to be paid out:
(i) The Capital to his credit till the date of death.
(ii) His proportion of profits till the date of death based on the average profits of the last three completed years.
(iii) By way of Goodwill, his proportion of the total profits for the three preceding years.
(d)
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 163
The Profits for three years were : 2015-16 : ₹ 4,200; 2016-17 : ₹ 3,900; 2017-18 : ₹ 4,500. Y died on 1st August, 2018. Prepare necessary accounts.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 164
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 165

Question 67.
P, Q and R were partners in a firm sharing profits in 2 : 2 : 1 ratio. The Partnership Deed provided that on the death of a partner his executors will be entitled to the following:
(a) Interest on Capital @ 12% p.a.
(b) Interest on Drawings @ 18% p.a.
(c) Salary of ₹ 12,000 p.a.
(d) Share in the profit of the firm(up to the date of death) on the basis of previous year’s profit.
P died on 31st May, 2108. His capital was ₹ 80,000. He had withdrawn ₹ 15,000 and interest on his drawings was calculated as ₹ 1,200. Profit of the firm for the previous year ended 31st March, 2018 was ₹ 30,000.
Prepare P’s Capital Account to be rendered to his executors.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 166

Question 68.
Vikas, Gagan and Momita were partners in a firm sharing profits in the ratio of 2 : 2 : 1. The firm closes its books on 31st March every year. On 30th September, 2014 Momita died. According to the provisions of Partnership Deed the legal representatives of a deceased partner are entitled for the following in the event of his/her death:
(a) Capital as per the last Balance Sheet.
(b) Interest on capital at 6% per annum till the date of her death.
(c) Her share of profit to the date of death calculated on the basis of average profit of last four years.
(d) Her share of goodwill to be determined on the basis of three years purchase of the average profit of last four years. The profits of last four years were:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 166
The balance in Momita’s Capital Account on 13st March, 2014 was ₹ 60,000 and she had withdrawn ₹ 10,000 till date of her death. Interest on her drawings was ₹ 300.
Prepare Momita’s Capital Account to be presented to her executors.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 168
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 169

Question 69.
Iqbal and Kapoor are in partnership sharing profits and losses in 3 : 2. Kapoor died three months after the date of the last Balance Sheet. According to the Partnership Deed, the legal personal representatives of Kapoor are entitled to the following payments:
(a) His capital as per the last Balance Sheet.
(b) Interest on above capital @ 3% p.a. till the date of death.
(c) His share of profits till the date of death calculated on the basis of last year’s profits.
His drawings are to bear interest at an average rate of 2% on the amount irrespective of the period. The net profits for the last three years, after charging insurance premium, were ₹ 20,000; ₹ 25,000 and ₹ 30,000 respectively. Kapoor’s capital as per Balance Sheet was ₹ 40,000 and his drawings till the date of death were ₹ 5,000.
Draw Kapoor’s Capital Account to be rendered to his representatives.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 170

Question 70.
A, B and C were partners in a firm sharing profits in the ratio of 5 : 3 : 2. On 31st March, 2017, their Balance Sheet was as follows:​
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 171
A died on 1st October, 2017. It was agreed among his executors and the remaining partners that:
(i) Goodwill to be valued at 2\(\frac { 1 }{ 2 }\) years purchase of the average profit of the previous 4 years, which were 2013-14: ₹ 13,000; 2014-15: ₹ 12,000; 2015-16: ₹ 20,000 and 2016-17: ₹ 15,000.
(ii) Patents be valued at ₹ 8,000; Machinery at ₹ 28,000; and Building at ₹ 25,000.
(iii) Profits for the year 2017-18 be taken as having accrued at the same rate as that of the previous year.
(iv) Interest on capital be provided @ 10% p.a.
(v) Half of the amount due to A to be paid immediately to the executors and the balance transferred to his (Executors) Loan Account.
Prepare A’s Capital Account and A’s Executors Account as on 1st October, 2017.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 172
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 173
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 174

Question 71.
Virad, Vishad and Roma were partners in a firm sharing profits in the ratio of 5 : 3 : 2 respectively. On 31st March, 2103, their Balance Sheet was as under:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 175
Virad died on 1st October, 2013. It was agreed between his executors and the remaining partners that:
(i) Goodwill of the firm be valued at 2\(\frac { 1 }{ 2 }\) years purchase of average profits for the last three years. The average profits were ₹ 1,50,000.
(ii) Interest on capital be provided at 10% p.a.
(iii) Profits for the 2013-14 be taken as having accrued at the same rate as that of the previous year which was ₹ 1,50,000.
Prepare Virad’s Capital Account to be presented to his Executors as on 1st October, 2013.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 176
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 177

Question 72.
Kavita, Leena and Monica are partners in firm sharing profits in the ratio of 1 : 1 : 3 respectively. Their Capital Accounts showed the following balanceson 31st March, 2012: Kavita ₹ 70,000; Leena ₹ 65,000 and Monica ₹ 2,10,000. Firm closes its accounts every year on 31st March. Kavita died on 30th September, 2012. In the event of death of any partner, the Partnership Deed provides for the following:
(a) Interest on capital will be calculated at the rate of 6% p.a.
(b) The deceased partner’s share in the goodwill of the firm will be calculated on the basis of 2 years purchase of the average profit of last three years. The profits of the firms for the last three years were ₹ 90,000; ₹ 1,00,000 and ₹ 1,10,000 respectively.
(c) Her share in the Reserve Fund of the firm will be paid. The Reserve Fund of the firm was ₹ 60,000 at the time of Kavita’s death.
(d) Her share of profit till the date of death will be calculated on the basis of sales. It is also specified that the sales during the year 2011-12 were ₹ 20,00,000. The sales from 1st April, 2012 to 30th September, 2012 were ₹ 4,00,000. The profit of the firm for the year ending 31st March, 2012 was ₹ 2,00,000.
Prepare Kavita’s Capital Account to be presented to his legal representative.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 178
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 179

Question 73.
A, B and C are partners in a firm sharing profits in the proportion of 3 : 2 : 1. Their Balance Sheet as at 31st March, 2018 stood as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 180
B died on 30th June, 2018 and according to the deed of the said partnership his executors are entitled to be paid as under:
(a) The capital to his credit at the time of his death and interest thereon @ 10% per annum.
(b) His proportionate share of General Reserve.
(c) His share of profits from the intervening period will be based on the sales during that period. Sales from 1st April, 2018 to 30th June, 2018 were as ₹ 12,00,000. The rate of profit during past three years had been 10% on sales.
(d) Goodwill according to his share of profit to be calculated by taking twice the amount of profits of the last three years less 20%. The profit of the previous three years were: 1st Year: ₹ 82,000; 2nd year: ₹ 90,000; 3rd year: ₹ 98,000.
(e) The investments were sold at par and his executors were paid out in full.
Prepare B’s Capital Account and his Executors Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 181
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 182
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 183

Question 74.
Babita, Chetan and David are partners in a firm sharing profits in the ratio of 2 : 1 : 1 respectively. Firm closes its accounts on 31st March every year. Chetan died on 30th September, 2012. There was a balance of ₹ 1,25,000 in Chetan’s Capital Account in the beginning of the year. In the event of Death of any partner, the Partnership Deed provides for the following:
(a) Interest on capital will be calculated at the rate of 6% p.a.
(b) The executor of deceased partner shall be paid ₹ 24,000 for his share of goodwill.
(c) His share of Reserve Fund of ₹ 12,000, shall be paid to his executor.
(d) His share of profit till the date of death will be calculated on the basis of sales. It is also specified that the sales during the year 2011-12 were ₹ 4,00,000. The sales from 1st April, 2012 to 30th September, 2012 were ₹ 1,20,000. The profit of the firm for the year ending 31st March, 2012 was ₹ 2,00,000.
Prepare Chetan’s Capital Account to be presented to his executor.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 184
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 185

Question 75.
Sunny, Honey and Rupesh were partners in a firm. On 31st March, 2014, their Balance Sheet was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 186
Honey died on 31st December, 2014. The Partnership Deed provided that the representative of the deceased partner shall be entitled to:
(a) Balance in the Capital Account of the deceased partner.
(b) Interest on Capital @ 6% per annum up to the date of his death.
(c) His share in the undistributed profits or losses as per the Balance Sheet.
(d) His share in the profits of the firm till the date of his death, calculated on the basis of rate of net profit on sales of the previous year. The rate of net profit on sales of previous year was 20%. Sales of the firm during the year till 31st December, 2014 was ₹ 6,00,000.
Prepare Honey’s Capital Account to be presented to his executors.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 187

Question 76.
R, S and T were partners sharing profits and losses in the ratio of 5 : 3 : 2 respectively. On 31st March, 2018, Their Balance Sheet stood as:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 188
T died on 1st August, 2018. It was agreed that:
(a) Goodwill be valued at 2\(\frac { 1 }{ 2 }\) years purchase of average of last 4 years profits which were:
2014-15: ₹ 60,000; 2016-17: ₹ 80,000 and 2017-18: ₹ 75,000.
(b) Machinery be valued at ₹ 1,40,000; Patents be valued at ₹ 40,000; Leasehold be valued at ₹ 1,25,000 on 1st August, 2018.
(c) For the purpose of calculating T’s share in the profits of 2018-19, the profits in 2018-19 should be taken to have accrued on the same scale as in 2017-18.
(d) A sum of ₹ 21,000 to be paid immediately to the Executors of T and the balance to be paid in four equal half-yearly installments together with interest @ 10% p.a.
Pass necessary journal entries to record the above transactions and T’s Executors Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 189
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 190
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 191
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 192
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 193

Question 77.
Akhil, Nikhil and Sunil were partners sharing profits and losses equally. Following was their Balance Sheet as at 31st March, 2018:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 194
Sunil died on 1st August, 2018. The Partnership Deed provided that the executor of a deceased partner was entitled to:
(a) Balance of Partners Capital Account and his share of accumulated reserve.
(b) Share of profits from the closure of the last accounting year till the date of death on the basis of the profit of the preceding completed year before death.
(c) Share of goodwill calculated on the basis of three times the average profit of the last four years.
(d) Interest on deceased partner’s capital @ 6% p.a.
(e) ₹ 50,000 to be paid to deceased executor immediately and the balance to remain in his Loan Account.
Profits and Losses for the preceding years were: 2014-15: ₹ 80,000 Profit ; 2015-16: ₹ 1,00,000 Loss; 2016-17: ₹ 1,20,000 Profit; 2017-18: ₹ 1,80,000 Profit.
Pass necessary journal entries and prepare Sunil’s Capital Account and Sunil’s Executor Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 195
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 196
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 197

Question 78.
B, C and D were partners in a firm sharing profits in the ratio of 5 : 3 : 2. On 31st December, 2008, their Balance Sheet was as follows:
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B died on 31st March, 2009. The Partnership Deed provided for the following on the death of a partner:
(a) Goodwill of the firm was to be valued at 3 years purchase of the average profit of last 5 years. The profits for the years ended 31st December, 2007, 31st December 2006, 31st December 2005 and 31st December 2004 were ₹ 70,000 ; ₹ 60,000 and ₹ 40,000 respectively.
(b) B’s share of profit and loss till the date of his death was to be calculated on the basis of the profit and loss for the year ended 31st December, 2008.
You are required to calculate the following :
(i) Goodwill of the firm and B’s share of goodwill at the time of his death.
(ii) B’s share in the profit or loss of the firm till the date of his death.
(iii) Prepare B’s Capital Account at the time of his death to be presented to his Executors.
Solution:
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TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 200

Question 79.
The Balance Sheet of X, Y and Z as at 31st March, 2018 was:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 201
The profit-sharing ratio was 3 : 2 : 1. Z died on 31st July, 2018. The Partnership Deed provides that:
(a) Goodwill is to be calculated on the basis of three years purchase of the five years average profit. The profits were : 2017-18: ₹ 24,000; 2016-15: ₹ 20,000; 2014-15: ₹ 10,000 and 2013-14: ₹ 5,000.
(b) The deceased partner to be given share of profits till the date of death on the basis of profits for the previous year.
(c) The Assets have been revalued as: Stock – ₹ 10,000; Debtors – ₹ 15,000; Furniture – ₹ 1,500; Plant and Machinery – ₹ 5,000; Building – ₹ 35,000. A Bill Receivable for ₹ 600 was found worthless.
(d) A Sum of ₹ 12,233 was paid immediately to Z’s Executors and the balance to be paid in two equal annual installments together with interest @ 10% p.a. on the amount outstanding.
Give journal entries and show the Z’s Executors Account till it is finally settled.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 202
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 203
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 204
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 205
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 206

Question 80.
X, Y and Z were partners in a firm sharing profits and losses in the 5 : 4 : 3. Their Balance Sheet on 31st March, 2018 was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 207
X died on 1st October, 2018 and Y and Z decide to share future profits in the ratio of 7 : 5. It was agreed between his executors and the remaining partners that:
(i) Goodwill of the firm be valued at 2\(\frac { 1 }{ 2 }\) years purchase of average of four completed years profit which were:
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(ii) X’s share of profit from the closure of last accounting year till date of death be calculated on the basis of last years profit.
(iii) Building undervalued by ₹ 2,00,000; Machinery overvalued by ₹ 1,50,000 and Furniture overvalued by ₹ 46,000.
(iv) A provision of 5% be created on Debtors for Doubtful Debts.
(v) Interest on Capital be provided at 10% p.a.
(vi) Half of the net amount payable to X’s executor was paid immediately and the balance was transferred to his loan account which was to be paid later.
Prepare Revaluation Account, X’s Capital Account and X’s Executors Account as on 1st October, 2018.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 209
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 210

Question 81.
X, Y and Z were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Z died on 30th June, 2018. The Balance Sheet of the firm as at that 31st March, 2018 is as follows:
The following decisions were taken by the remaining partners:
(a) A Provision for Doubtful Debts is to be raised at 5% on Debtors.
(b) While Machinery to be decreased by 10%, Furniture and Stock are to be appreciated by 5% and 10% respectively.
(c) Advertising Expenses ₹ 4,200 are to be carried forward to the next accounting year and therefore, it is to be adjusted through the Revaluation Account.
(d) Goodwill of the firm is valued at ₹ 60,000.
(e) X and Y are to share profits and losses equally in future.
(f) Profit for the year ended 31st March, 2018 was ₹ 16,000 and Z’s share of profit till the date of death is to be determined on the basis of profit for the year ended 31st March, 2018.
(g) The Fixed Capital Method is to be converted into the Fluctuating Capital Method by transferring the Current Account balances to the respective Partners Capital Accounts.
Prepare the Revaluation Account, Partners Capital Accounts and prepare C’s Executors’s Account to show that C’s Executors were paid in two half-yearly installments plus interest of 10% p.a. on the unpaid balance. The first installments was paid on 31st December, 2018.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 211
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 212
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 213
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 214

Question 82.
X, Y and Z are partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. Their Balance Sheet as at 31st March, 2018 was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 215
Z died on 1st April, 2018, X and Y decide to share future profits and losses in ratio of 3 : 5. It was agreed that:
(i) Goodwill of the firm be valued 2\(\frac { 1 }{ 2 }\) years purchase of average of four completed years profits which were : 2014-15 – ₹ 1,00,000; 2015-16 – ₹ 80,000; 2016-17 – ₹ 82,000.
(ii) Stock undervalued by ₹ 14,000 and machinery overvalued by ₹ 13,600.
All debtors are good. A debtor whose dues of ₹ 400 were written off as bad debts paid 50% in full settlement.
Out of the amount of insurance premium which was debited entirely to Profit and Loss Account ₹ 2,200 be carried forward as an unexpired insurance premium.
₹ 1,000 included in Sundry Creditors is not likely to arise.
A claim of ₹ 1,000 on account of Workmen Compensation to be provided for.
(iii) Investment be sold for ₹ 8,200 and a sum of ₹ 11,200 be paid to execution of Z immediately. The balance to be paid in four equal half-yearly installments together with interest @ 8% p.a. at half year rest.
Show Reavaluation Account, Capital Accounts of Partners and the Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 216
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 217
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 218

Question 83.
X, Y and Z were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 31st March, 2018 their Balance Sheet was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 219
Y died on 30th June, 2018. The Partnership Deed provided for the following on the death of a partner:
(i) Goodwill of the business was to be calculated on the basis of 2 times the average profit of the past 5 years. The profits for the years ended 31st March, 2018, 31st March, 2017, 31st March, 2016, 31st March, 2015 and 31st March, 2014 were ₹ 3,20,000 (Loss) ; ₹ 1,00,000; ₹ 1,60,000; ₹ 2,20,000 and ₹ 4,40,000 respectively.
(ii) Y’s share of profit or loss from 1st April, 2018 till his death was to be calculated on the basis of the profit or loss for the year ended 31st March, 2018.
You are required to calculate the following:
(a) Goodwill of the firm and Y’s share of goodwill at the time of his death.
(b) Y’s share in the profit or loss of the firm till the date of his death.
(c) Prepare Y’s Capital Account at the time of his death to be presented to his executors.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 220
TS Grewal Accountancy Class 12 Solutions Chapter 5 Retirement - Death of a Partner image - 221

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TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner

TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner – Here are all the TS Grewal solutions for Class 12 Accountancy Chapter 4. This solution contains questions, answers, images, explanations of the complete Chapter 4 titled Admission of a Partner of Accountancy taught in Class 12. If you are a student of Class 12 who is using TS Grewal Textbook to study Accountancy, then you must come across Chapter 4 Admission of a Partner. After you have studied lesson, you must be looking for answers of its questions. Here you can get complete TS Grewal Solutions for Class 12 Accountancy Chapter 4 Admission of a Partner in one place.

TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner

Question 1.
X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2 . They admit A into partnership and give him 1/5th share of profits. Find the new profit-sharing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 1

Question 2.
Ravi and Mukesh are sharing profits in the ratio of 7 : 3. They admit Ashok for 3/7th share in the firm which he takes 2/7th from Ravi and 1/7th from Mukesh. Calculate new profit-sharing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 2

Question 3.
A and B are partners sharing profits and losses in the proportion of 7 : 5 . They agree to admit C, their manager, into partnership who is to get 1/6th share in the profits. He acquires this share as 1/24th from A and 1/8th from B. Calculate new profit-sharing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 3

Question 4.
A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1. They admitted D as a new partner for 1/8th share in the profits, which he acquired 1/16th from C. Calculate the new profit-sharing ratio of A, B, C and D.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 4

Question 5.
Bharati and Astha were partners sharing profits in the ratio of 3 : 2. They admitted Dinkar as a new partner for 1/5th share in the future profits of the firm which he got equally from Bharati and Astha. Calculate the new profit-sharing ratio of Bharati, Astha and Dinkar.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 5

Question 6.
X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2. Z is admitted as partner with 1/4 share in profit. Z acquires his share from X and Y in the ratio of 2 : 1. Calculate new profit-sharing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 6
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 7

Question 7.
R and S are partners sharing profits in the ratio of 5 : 3. T joins the firm as a new partner. R gives 1/4th of his share and S gives 1/5th of his share to the new partner. Find out new profit-sharing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 8

Question 8.
Kabir and Farid are partners in a firm sharing profits and losses in the ratio of 7 : 3. Kabir surrenders 2/10th from his share and Farid surrenders 1/10th from his share in favour of Jyoti; the new partner. Calculate new profit-sharing ratio and sacrificing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 9

Question 9.
Find New Profit-sharing Ratio:
(i) R and T are partners in a firm sharing profits in the ratio of 3 : 2. S joins the firm. R surrenders 1/4th of his share and T 1/5th of his share in favour of S.
(ii) A and B are partners. They admit C for 1/4th share. In future , the ratio between A and B would be 2 : 1.
(iii) A and B are partners sharing profits and losses in the ratio of 3 : 2 . They admit C for 1/5th share in the profit. C acquires 1/5th of his share from A and 4/5th share from B.
(iv) X, Y and Z are partners in the ratio of 3 : 2 : 1. W joins the firm as a new partner for 1/6th share in profits. Z would retain his original share.
(v) A and B are equal partners. They admit C and D as partners with 1/5th and 1/6th share respectively.
(vi) A and B are partners sharing profits/losses in the ratio of 3 : 2. C is admitted for 1/4th share. A and B decide to share equally in future.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 10
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 11
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 12
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 13
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 14
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 15

Question 10.
X and Y were partners sharing profits in the ratio of 3 : 2. They admitted P and Q as new partners X surrendered 1/3rd of his share in favour of P and Y surrendered 1/4th of his share in favour of Q. Calculate new profit-sharing ratio of X, Y , P and Q.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 16

Question 11.
Rakesh and Suresh are sharing profits in the ratio of 4 : 3 . Zaheer joins and the new ratio among Rakesh, Suresh and Zaheer is 7 : 4 : 3. Find out the sacrificing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 17

Question 12.
A, B and C are partners sharing profits in the ratio of 4 : 3 : 2. D is admitted for 1/3rd share in future profits. What is the sacrificing ratio ?
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 18

Question 13.
A and B are partners sharing profits in the ratio of 3 : 2. C is admitted as a partner. The new profit-sharing ratio among A, B and C is 4 : 3 : 2 . Find out the sacrificing ratio ?
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 19

Question 14.
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 and A, B, C and D in future would share profits among themselves as 3/10 : 4/10 : 2/10 : 1/10. Calculate new profit-sharing ratio after admission.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 20

Question 15.
A, B and C are partners sharing profits in the ratio of 2 : 2 : 1. D is admitted as a new partner for 1/6th share. C will retain his original share. Calculate the new profit-sharing ratio and sacrificing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 21

Question 16.
A, B and C are partners sharing profits in the ratio of 2 : 2 : 1. D is admitted as a new partner for 1/6th share. C will retain his original share. Calculate the new profit-sharing ratio and sacrificing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 22
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 23

Question 17.
A and B are in partnership sharing profits and losses as 3 : 2. C is admitted for 1/4th share. Afterwards D enters for 20 paise in the rupee. Compute profit-sharing ratio of A, B, C and D after D admission.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 24
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 25

Question 18.
P and Q are partners sharing profits in the ratio of 3 : 2 . They admit R, a new partner who acquires 1/5th of his share from P and 4/25th share from Q. Calculate New Profit-sharing Ratio and sacrificing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 26

Question 19.
A and B are partners sharing profits and losses in the ratio of 2 : 1 . They take C as a partner for 1/5th share. The Goodwill Account appears in the books at its full value ₹ 15,000. C is to pay proportionate amount as premium for goodwill which he pays to A and B privately. Pass necessary entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 27

Question 20.
A and B are partners sharing profits and losses in the ratio of 2 : 5. They admit C on the condition that he will bring in ₹ 14,000 as his share of goodwill in cash to be distributed between A and B. C’s share in the future profits or losses will be 1/4th. What will be the new profit-sharing ratio and what amount of goodwill brought in by C will be received by A and B.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 28

Question 21.
A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. A new partner C is admitted. A surrenders 1/5th of his share and B surrenders 2/5th of his share and B surrenders 2/5th of his share in favour of C. For this purpose of C’s admission, goodwill of the firm is valued at ₹ 75,000 and C brings in his share of goodwill in cash which is retained in the firm’s books. Journalise the above transactions.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 29
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 30

Question 22.
Give Journal entries to record the following arrangements in the books of the firm:
(a) B and C are partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium (goodwill) of ₹ 2,000 for 1/4th share of the profits, shares shares of B and C remain as before.
(b) B and C are partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium of ₹ 2,100 for 1/4th share of profits which he acquires 1/6th from B and 1/12th from C.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 31
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 32

Question 23.
B and C are in Partnership sharing profits and losses as 3 : 1. They admit D into the firm, D paying a premium of ₹ 15,000 for 1/3rd share of the profits. As between themselves, B and C agree to share the future profits and losses equally. Draft journal entries showing appropriations of the premium money.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 33
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 34
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 35

Question 24.
M and J are partners in a firm sharing profits in the ratio of 3 : 2. They admit R as a new partner. The new profit-sharing ratio between M, J and R will be 5 : 3 : 2. R brought in ₹ 25,000 for his share of premium for goodwill. Pass necessary journal entries for the treatment of goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 36
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 37

Question 25.
A and B are in partnership sharing profitsand losses in the ratio of 5 : 3. C is admitted as a partner who pays ₹ 40,000 as capital and the necessary amount of goodwill which is valued at ₹ 60,000 for the firm. His share of profits will be 1/5th which he takes 1/10th from A and 1/10th from B.
Give journal entries and also calculate future profit-sharing ratio of the partners.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 38
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 39

Question 26.
A and B are partners sharing profits and losses in the proportion of 7 : 5. They agree to admit C, their Manager, into partnership who is to get 1/6th share in the business. C brings in ₹ 10,000 for his capital and ₹ 3,600 for the 1/6th share of goodwill which he acquires 1/24th from A and 1/8th from B. Their profits for the first year of the new partnership amount to ₹ 24,000. Pass necessary journal entries in connection with C’s admission and apportion the profits between the partners.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 40
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 41
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 42

Question 27.
X and Y are partners sharing profits in the ratio of 3 : 1. Z is admitted as a partner for which he pays ₹ 30,000 for goodwill in cash. X, Y and Z decided to share the future profits in equal proportion. You are required to pass a single journal entry to give effect to the above arrangement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 43
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 44

Question 28.
A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. They admit C into partnership for 1/5th share. C brings in ₹ 30,000 as capital and ₹ 10,000 as goodwill. At the time of admission of C, goodwill appears in the Balance Sheet of A and B at ₹ 3,000. The new profit-sharing ratio of the partners will be 5 : 3 : 2. Pass necessary journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 45
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 46

Question 29.
Anu and Bhagwan were partners in a firm sharing profits in the ratio of 3 : 1. Goodwill appeared in the books at ₹ 4,40,000. Raja was admitted to the partnership. The new profit-sharing ratio among Anu, Bhagwan and Raja was 2 : 2 : 1.
Raja brought ₹ 1,00,000 for his capital and necessary cash for his goodwill premium. The goodwill of the firm was valued at ₹ 2,50,000.
Record necessary journal entries in the books of the firm for the above transactions.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 47
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 48

Question 30.
X and Y are partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2018, they admit Z as a new partner for 1/4th share in the profits. Z contributed following assets towards his capital and for his share of goodwill:
Stock ₹ 60,000; Debtors ₹ 80,000; Land ₹ 1,00,000; Plant and Machinery; ₹ 40,000. On the date of admission of Z, the goodwill of the firm was valued at ₹ 6,00,000. Pass necessary journal entries in the books of the firm on Z’s admission.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 49
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 50

Question 31.
A and B are partners in a business sharing profits and losses in the ratio of 1/3rd and 2/3rd. On 1st April, 2018, their capitals are ₹ 8,000 and ₹ 10,000 respectively. On that date, they admit C in partnership and give him 1/4th share in the future profits. C brings in ₹ 8,000 as his capital and ₹ 6,000 as goodwill. The amount of goodwill is immediately withdrawn by the old partners in cash. Draft the journal entries and show the Capital Accounts of all the Partners. Calculate proportion in which partners would share profits and losses in future.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 51
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 52
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 53

Question 32.
A and B were partners in a firm sharing profits and losses in the ratio of 3 : 2. They admitted C as a new partner for 3/7th share in the profit and the new profit-sharing ratio will be 2 : 2 : 3. C brought ₹ 2,00,000 as his capital and ₹ 1,50,000 as premium for goodwill. Half of their share of premium was withdrawn by A and B from the firm. Calculate sacrificing ratio and pass necessary journal entries for the above transactions in the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 54
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 55
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 56
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Question 33.
A and B are partners sharing profits in the ratio of 2 : 1. They admit C for 1/4th share in profits C brings in ₹ 30,000 for his capital and ₹ 8,000 out of his share ₹ 10,000 for goodwill. Before admission, goodwill appeared in books at ₹ 18,000. Give journal entries to give effect to the above arrangements.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 57
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 58

Question 34.
A and B are partners sharing profits in the ratio of 3 : 2 . They admit C into the firm for 1/4th share in profits which he takes 1/6th from A and 1/12th from B. C brings in only 60% of his share of firm’s goodwill. Goodwill of the firm has been valued at ₹ 1,00,000. Pass necessary journal entries to record this arrangement.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 59
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 60

Question 35.
On the admission of Rao, it was agreed that the goodwill of Murty and Shah should be valued at ₹ 30,000. Rao is to get 1/4th share of profits. Previously Murty and Shah shared profits in the ratio of 3 : 2. Rao cannot bring in any cash. Give journal entries in the books of Murty and Shah when:
(a) there is no Goodwill Account and
(b) Goodwill appears in the books at ₹ 10,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 61
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 62
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 63

Question 36.
A and B are partners sharing profits in the ratio of 3 : 2. Their books show goodwill at ₹ 2,000. C is admitted with 1/4th share of profits and brings in ₹ 10,000 as his capital but is not able to bring in cash for his share of goodwill ₹ 3,000. Draft journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 64
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 65

Question 37.
A, B and C are in partnership sharing profits and losses in the ratio of 5 : 4 : 1 respectively. Two new partners D and E are admitted. The profits are now to be shared in the ratio of 3 : 4 : 2 : 2 : 1 respectively. D is to pay ₹ 90,000 for his share of Goodwill but E has insufficient cash to pay for Goodwill. Both the new partners introduced ₹ 1,20,000 each as their capital. You are required to pass necessary journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 66
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 67

Question 38.
Mohan and Sohan were partners in a firm sharing profits and losses in the ratio of 3 : 2. They admitted Ram for 1/4th share on 1st April, 2018. It was agreed that goodwill of the firm will be valued at 3 years purchase of the average profit of last 4 years which were ₹ 50,000 for 2014-15, ₹ 60,000 for 2015-16, ₹ 90,000 for 2016-17 and ₹ 70,000 for 2017-18. Ram did not bring his share of goodwill premium in cash. Record the necessary journal entries in the books of the firm on Ram’s admission when:
(a) Goodwill appears in the books at ₹ 2,02,500.
(b) Goodwill appears in the books at ₹ 2,500.
(c) Goodwill appears in the books at ₹ 2,02,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 68
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 69
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 70

Question 39.
Anil and Sunil are partners in a firm with fixed capitals of ₹ 3,20,000 and ₹ 2,40,000 respectively. They admitted Charu as a new partner for 1/4th share in the profits of the firm on 1st April, 2012. Charu brought ₹ 3,20,000 as her share of capital.
Calculate value of goodwill and record necessary journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 71

Question 40.
A and B are partners in a firm with capital of ₹ 60,000 and ₹ 1,20,000 respectively. They decide to admit C into the partnership for 1/4th share in the future profits. C is to bring in a sum of ₹ 70,000 as his capital. Calculate amount of goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 72

Question 41.
Bhuwan and Shivam were partners in a firm sharing profits in the ratio of 3 : 2. Their capitals were ₹ 50,000 and ₹ 75,000 respectively. They admitted Atul on 1st April, 2018 as a new partner for 1/4th share in the future profits. Atul brought ₹ 75,000 as his capital. Calculate the value of goodwill of the firm and record necessary journal entries for the above transactions on Atul’s admission.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 73

Question 42.
X and Y are partners with capitals of ₹ 50,000 each. They admit Z as a partner with 1/4th share in the profits of the firm. Z brings in ₹ 80,000 as his share of capital. The Profit and Loss Account showed a credit balance of ₹ 40,000 as on date of admission of Z. Give necessary journal entries to record the goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 74

Question 43.
Asin and Shreyas are partners in a firm. They admit Ajay as a new partner with 1/5th share in the profits of the firm. Ajay brings ₹ 5,00,000 as his share of capital. The value of the total assets of the firm was ₹ 15,00,000 and outside liabilities were valued at ₹ 5,00,000 on that date. Give necessary journal entry to record goodwill at the time of Ajay’s admission. Also show your workings.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 75

Question 44.
Verma and Sharma are partners in a firm sharing profits and losses in the ratio of 5 : 3. They admitted Ghosh as a new partner for 1/5th share of profits. Ghosh is to bring in ₹ 20,000 as capital and ₹ 4,000 as his share of goodwill premium. Give the necessary journal entries:
(a) When the amount of goodwill is retained in the business.
(b) When the amount of goodwill is fully withdrawn.
(c) When 50% of the amount of goodwill is withdrawn.
(d) When goodwill is paid privately.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 76
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 77

Question 45.
Disha and Divya are partners in a firm sharing profits in the ratio of 3 : 2 respectively. The fixed capital of Disha is ₹ 4,80,000 and of Divya is ₹ 3,00,000. On 1st April, 2018 they admitted Hina as a new partner for 1/5th share in future profits. Hina brought ₹ 3,00,000 as her capital. Calculate value of goodwill of the firm and record necessary journal entries on Hina’s admission.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 78

Question 46.
E and F were partners in a firm sharing profits in the ratio of 3 : 1. They admitted G as a new partner on 1st April, 2018 for 1/3rd share. It was decided that E, F and G will share future profits equally. G brought ₹ 50,000 in cash and machinery worth ₹ 70,000 for his share of profit as premium of goodwill. Pass necessary journal entries in the books of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 79
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 80

Question 47.
Mr. A commenced business with a capital of ₹ 2,50,000 on 1st April, 2013. During the five years ended 31st March, 2018, the following profits and losses were made:
31st March, 2014, Loss – ₹ 5,000
31st March, 2015, Profit – ​₹ 13,000
31st March, 2016, Profit – ​₹ 17,000
31st March, 2017, Profit – ₹ 20,000
31st March, 2018, Profit – ₹ 25,000
During this period he had drawn ₹ 40,000 for his personal use. On 1st April, 2018, he admitted B into partnership on the following terms:
B to bring for his half share in the business, capital equal to A’s Capital on 31st March, 2018 and to pay for the one-half share of goodwill of the business, on the basis of three times the average profit of the last five years. Prepare the statement showing what amount B should invest to become a partner and pass entries to record the transactions relating to admission.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 81
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 82

Question 48.
Pass entries in the firm’s journal for the following on admission of a partner:
(i) Machinery be depreciated by ₹ 16,000 and Building be appreciated by ₹ 40,000.
(ii) A provision be created for Doubtful Debts @ 5% of Debtors amounting to ₹ 80,000.
(iii) Provision for warranty claims be increased by ₹ 12,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 83

Question 49.
Pass entries in the firm’s journal for the following on admission of a partner:
(i) Unrecorded Investments worth ₹ 20,000.
(ii) Unrecorded liability towards suppliers for ₹ 5,000.
(iii) An item of ₹ 1,600 included in Sundry Creditors is not likely to be claimed and hence should be written back.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 84

Question 50.
X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a new partner and fixed the new profit-sharing ratio as 3 : 2 : 1. At the time of admission of Z, Debtors and Provision for Doubtful Debts appeared at ₹ 50,000 and ₹ 5,000 respectively all debtors are good. Pass the necessary journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 85

Question 51.
X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a new partner for 1/4th share. At the time of admission of Z, Stock (Book Value ₹ 1,00,000) is to be reduced by 40% and Furniture (Book Value ₹ 60,000) is to be reduced to 40%. Pass the necessary journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 86

Question 52.
X and Y are partners sharing profits in the ratio of 3 : 2. They admitted Z as a new partner for 1/4th share of profits. At the time of admission of Z Investments appeared at ₹ 80,000. Half of the investments to be taken over by X and Y in their profit-sharing ratio at book value. Remaining investments were valued at ₹ 50,000. Pass the necessary journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 87

Question 53.
X and Y are partners sharing profits in the ratio of 3 : 2. They admitted Z as a new partner for 1/4th share of profits. At the time of admission of Z Debtors and Provision for Doubtful Debts appeared at ₹ 76,000 and ₹ 8,000 respectively. ₹ 6,000 of the debtors proved bad. A provision of 5% is to be created on Sundry Debtors for doubtful debts. Pass the necessary journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 88
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 89

Question 54.
X, Y and Z are partners sharing profits ands losses in the ratio of 6 : 3 : 1. They decide to take W into partnership with effect from 1st April, 2018. The new profit-sharing ratio between X, Y, Z and W will be 3 : 3 : 3 : 1. They also decide to record the effect of the following revaluations without affecting the book values of the assets and liabilities by passing a single adjustment entry:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 90
Pass necessary adjustment entry.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 91
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 92
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 93

Question 55.
At the time of admission of a new partner C the assets and liabilities of A and B were revalued as follows:
(a) A Provision for Doubtful Debts @10% was made on Sundry Debtors (Sundry Debtors ₹ 50,000).
(b) Creditors were written back by ₹ 5,000.
(c) Building was appreciated by 20% (Book Value of Building ₹ 2,00,000).
(d) Unrecorded Investments were worth ₹ 15,000.
(e) A Provision of ₹ 2,000 was made for an Outstanding Bill for repairs.
(f) Unrecorded Liability towards suppliers was ₹ 3,000.
Pass necessary journal entries.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 94

Question 56.
X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 1st April, 2018, they admit Z as a new partner for 1/5th share in profits . On that date, there was a balance of ₹ 1,50,000 in General Reserve and a debit balance of ₹ 20,000 in the Profit and Loss Account of the firm. Pass necessary journal entries regarding adjustment of reserve and accumulated profit/loss.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 95
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 96

Question 57.
X and Y were partners in a firm sharing profits and losses in the ratio of 2 : 1. Z was admitted for 1/3rd share in the profits. On the date of Z’s admission, the Balance Sheet of X and Y showed General Reserve of ₹ 2,50,000 and a credit balance of ₹ 50,000 in Profit and Loss Account. Pass necessary journal entries on the treatment of these items on Z’s admission.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 97

Question 58.
(a) X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. They decide to admit W for 1/6th share. Following is th extract of the Balance Sheet on the date of admission:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 98
(b) A and B were partners in a firm sharing profit in 4 : 3 ratio. On 1st April, 2018, 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 ₹ 84,000 and a debit balance of ₹ 8,400 in the Profit and Loss Account Pas necessary journal entries for the treatment of these items on C’s admission.
(c) Give the journal entries to distribute Workmen Compensation Reserve of ₹ 72,000 at the time of admission of Z, when there is no claim against it. The firm has two partners X and Y.
(d) Give the journal entries to distribute Workmen Compensation Reserve of ₹ 72,000 at the time of admission of Z, when there is claim of ₹ 48,000 against it. The firm has two partners X and Y.
(e) Give the journal entry to distribute Investment Fluctuation Reserve of ₹ 24,000 at the time of admission of Z, when Investment (Market Value ₹ 1,10,000 ) appears at ₹ 1,20,000. The firm has two partners X and Y.
(f) Give the journal entry to distribute General Reserve of ₹ 4,800 at the time of admission of Z, when 20% of General Reserve is to be transferred to Investment Fluctuation Reserve. The firm has two partners X and Y.
(g) A, B and C were partners sharing profits and losses in the ratio of 6 : 3 : 1. They decide to take D into partnership with effect from 1st April, 2018. The new profit-sharing ratio between A, B, C and D will be 3 : 3 : 3 : 1. They also decide to record the effect of the following without affecting their book values, by passing a single adjustment entry:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 99
Pass the necessary single adjustment entry, through the Partner’s Current Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 100
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 101
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 102
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 103

Question 59.
A and B, carrying on business in partnership and sharing profits and losses in the ratio of 3 : 2, require a partner, when their Balance Sheet stood as:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 104
They admit C into partnership and give him 1/8th share in the future profits on the following terms:
(a) Goodwill of the firm be valued at twice the average of the last three years profits which amounted to ₹ 21,000; ₹ 24,000 and ₹ 25,560.
(b) C is to bring in cash for the amount of his share of goodwill.
(c) C is to bring in cash ₹ 15,000 as his capital.
Pass journal entries recording these transactions, draw out the Balance Sheet of the new firm and state  new profit-sharing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 284
Question 60.
X, Y and Z are equal partners with capitals of ₹ 1,500; ₹ 1,750 and ₹ 2,000 respectively. They agree to admit W into equal partnership upon payment in cash ₹ 1,500 for 1/4th share of the goodwill and ₹ 1,800 as his capital, both sums to remain in the business. The liabilities of the old firm amounted to ₹ 3,000 and the assets, apart from cash, consist of Motors ₹ 1,200, Furniture ₹ 400, Stock ₹ 2,650 and Debtors ₹ 3,780. The Motors and Furniture were revalued at ₹ 9450 and ₹ 380 respectively.
Pass journal entries to give effect to the above arrangement and also show Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 106
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 107
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 108
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 109

Question 61.
Following was the Balance Sheet of A and B who were sharing profits in the ratio of 2 : 1 as at 31st March, 2018:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 111
They agree to admit C into the partnership on the following terms:
(a) C was to bring in ₹ 7,500 as his capital and ₹ 3,000 as goodwill for 1/4th share in the firm.
(b) Values of the Stock and Plant and Machinery were to be reduced by 5%.
(c) A Provision for Doubtful Debts was to be created in respect of Sundry Debtor ₹ 375.
(d) Building Account was to be appreciated by 10%.
Pass necessary journal entries to give effect to the arrangements. Prepare Profit and Loss Adjustment Account (or Revaluation Account), Capital Accounts and Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 112
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 113
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 114
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 115

Question 62.
Given below is the Balance Sheet of A and B, who are carrying on partnership business on 31st March, 2018. A and B share profits and losses in the ratio of 2 : 1.
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 116
C is admitted as a partner on the date of the Balance Sheet on the following terms:
(a) C will bring in ₹ 1,00,000 as his capital and ₹ 60,000 as his share of goodwill for 1/4th share in the profits.
(b) Plant is to be appreciated to ₹ 1,20,000 and the value of building is to be appreciated by 10%.
(c) Stock is found overvalued by ₹ 4,000.
(d) A Provision for doubtful debts is to be created at 5% of Sundry Debtors.
(e) Creditors were unrecorded to the extent of ₹ 1,000.
Pass the necessary journal entries, prepare the Revaluation Account and Partners Capital Accounts, and show the Balance Sheet after the admission of C.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 117
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 118
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 119

Question 63.
Balance Sheet of J and K who share profits in the ratio of 3 : 2 is as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 120
M joins the firm from 1st April, 2018 for a half share in the future profits. He is to pay ₹ 1,00,000 for goodwill and ₹ 3,00,000 for capital. Draft the journal entries and prepare Balance Sheet in each of the following cases:
(a) If M acquires his share of profit from the firm in the profit – sharing ratios of the partners.
(b) If M acquires his share of profits from the firm in equal proportions from the original partners.
(c) If M acquires his share of profit in the ratio of 3 : 1 from the original partners, ascertain the future profit-sharing ratio of the partners in each case.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 121
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 122.
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 123
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 124
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 125
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 126
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 127
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 128

Question 64.
The Balance Sheet of Madhu and Vidhi who are sharing profits in the ratio of 2 : 3 as at 31st March, 2016 is given below:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 129
Madhu and Vidhi decided to admit Gayatri as a new partner from 1st April, 2016 and their new profit-sharing ratio will be 2 : 3 : 5. Gayatri brought ₹ 4,00,000 as her capital and her share of goodwill premium in cash.
(a) Goodwill of the firm was valued at ₹ 3,00,000.
(b) Land and Building was found undervalued by ₹ 26,000.
(c) Provision for doubtful debts was to be made equal to 5% of the debtors.
(d) There was a claim of ₹ 6,000 on account of workmen compensation.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 130
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 131
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 132

Question 65.
Shyamlal and Sanjay were in partnership business sharing profits and losses in the ratio of 2 : 3 respectively. Their Balance Sheet as at 31st March, 2018 was:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 133
On 1st April, 2018, they admitted Shanker into partnership for 1/3rd share in the future profits on the following terms:
(a) Shanker is to bring in ₹ 30,000 as his capital and ₹ 20,000 as goodwill which is to remain in the business.
(b) Stock and Furniture are to be reduced in value by 10%.
(c) Building is to be appreciated by ₹ 15,000.
(d) Provision of 5% is to be made on Sundry Debtors for Doubtful Debts.
(e) Unaccounted Accrued Income of ₹ 2,400 to be provided for. A debtor, whose dues of ₹ 4,800 were written off as bad debts, paid 50% in full settlement.
(f) Outstanding Rent amounted to ₹ 4,800.
Show Profit and Loss Adjustment Account (Revaluation Account), Capital Accounts of Partners and opening Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 134
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 135
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 136
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 137

Question 66.
A, B, C are partners sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Their Balance Sheet as at 31st March, 2108 is as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 138
D is admitted as a new partner on 1st April, 2018 for an equal share and is to pay ₹ 50,000 as capital.
Following are the adjustments required on D’s admission:
(a) Out of the Creditors, a sum of ₹ 10,000 is due to D which will be transferred to his capital Account.
(b) Advertisement Expenses of ₹ 1,200 are to be carried forward to next accounting period as Prepaid Expenses.
(c) Expenses debited in the Profit and Loss Account  includes a sum of ₹ 2,000 paid for B’s personal expenses.
(d) A Bill of Exchange of ₹ 4,000, which was previously discounted with the banker, was dishonoured on 31st March, 2018 but no entry has been passed for that.
(e) A Provision for Doubtful Debts @ 5% is to be created against Debtors.
(f) Expenses on Revaluation amounted to ₹ 2,100 is paid by A.
Prepare necessary Ledger Accounts and Balance Sheet after D’s admission.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 139
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 140
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 141
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 142

Question 67.
X and Y share profits in the ratio of 5 : 3. Their Balance Sheet as at 31st March, 2018 was:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 143
Z is admitted as a new partner on 1st April, 2018 on the following terms:
(a) Provision for doubtful debts is to be maintained at 5% on Debtors.
(b) Outstanding rent amounted to ₹ 15,000.
(c) An accrued income of ₹ 4,500 does not appear in the books of the firm. It is now to be recorded.
(d) X takes over the Investments at an agreed value of ₹ 18,000.
(e) New Profit-sharing Ratio of partners will be 4 : 3 : 2.
(f) Z will bring in ₹ 60,000 as his capital by cheque.
(g) Z is to pay an amount equal to his share in firm’s goodwill valued at twice the average profits of the last three years which were ₹ 90,000; ₹ 78,000 and ₹ 75,000 respectively.
(h) Half of the amount of the goodwill is to be withdrawn by X and Y.
You are required to pass journal entries, prepare Revaluation Account, Partners Capital and Current Accounts and the Balance Sheet of the new firm.
They admit Z into partnership with 1/8th share in profits on this date. Z brings ₹ 20,000 as his capital and ₹ 12,000 for goodwill in cash. Z acquires his share entirely from X. Following revaluations are also made:
(a) Employees Provident Fund liability is to be increased by ₹ 5,000.
(b) All Debtors are good. Therefore, no provision is required on Debtors.
(c) Stock includes ₹ 3,000 for obsolete items.
(d) Creditors are to be paid ₹ 1,000 more.
(e) Fixed Assets are to be revalued at ₹ 70,000.
Prepare journal entries, necessary accounts and new Balance Sheet. Also, calculate new profit-sharing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 144
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 285
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 146
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 147

Question 68.
Balance Sheet of Ram and Shyam who shares profits in proportion to their capitals as at 31st March, 2018 is:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 148
On 1st April, 2018 they admitted Arjun into partnership on the following terms:
(a) Arjun to bring in ₹ 20,000 as capital and ₹ 6,600 for goodwill, which is to be left in the business and he is to receive 1/4th share of the profits.
(b) Provision for Doubtful Debts is to be 2% on Debtors.
(c) Value of Stock to be written down by 5%.
(d) Freehold Premises are to be taken at valuation of ₹ 22,400; Plant and Machinery ₹ 11,800; Fixtures and Fittings ₹ 1,540 and Vehicles ₹ 800.
You are required to make necessary adjustments entries in the firm, give Balance Sheet of the new firm as at 1st April, 2018 and also give’s the proportions in which the partners will share profits , there being no change in the proportions of Ram and Shyam.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 149
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 150
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 151
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 152
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 153

Question 69.
X and Y are partners in a firm sharing profits in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2018 was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 154
On 1st April, 2018 , they admitted Z as a partner for 1/6th share on the following terms:
(i) Z brings in ₹ 40,000 as his share of Capital but he is unable to bring any amount for Goodwill.
(ii) Claim on account of Workmen Compensation is ₹ 3,000.
(iii) To write off Bad Debts amounted to ₹ 6,000.
(iv) Creditors are to be paid ₹ 2,000 more.
(v) There being a claim against the firm for damages, liabilities to the extent of ₹ 2,000 should be created.
(vi) Outstanding rent be brought down to ₹ 11,200.
(vii) Goodwill is valued at 1\(\frac { 1 }{ 2 }\) years purchase of the average profits of last 3 years, less ₹ 12,000. Profits for the last 3 years amounted to ₹ 10,000 ; ₹ 20,000 and ₹ 30,000.
Pass journal entries, prepare Capital Accounts and opening Balance Sheet.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 155
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 156
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 157
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 158
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 159

Question 70.
Following is the Balance Sheet of X and Y as at 31st March, 2018 who are partners in a firm sharing profits and losses in the ratio of 3 : 2 respectively:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 160
Z is admitted as a new partner on 1st April, 2018 on the following terms:
(a) Provision for doubtful debts is to be maintained at 5% on Debtors.
(b) Outstanding rent amounted to ₹ 15,000.
(c) An accrued income of ₹ 4,500 does not appear in the books of the firm. It is now to be recorded.
(d) X takes over the Investments at an agreed value of ₹ 18,000.
(e) New Profit-sharing Ratio of partners will be 4 : 3 : 2.
(f) Z will bring in ₹ 60,000 as his capital by cheque.
(g) Z is to pay an amount equal to his share in firm’s goodwill valued at twice the average profits of the last three years which were ₹ 90,000 ; ₹ 78,000 and ₹ 75,000 respectively.
(h) Half of the amount of the goodwill is to be withdrawn by X and Y.
You are required to pass journal entries, prepare Revaluation Account, Partners Capital and Current Accounts and the Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 161
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 162
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 163
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 164
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 165

Question 71.
X and Y are partners sharing profits and losses equally. Their Balance Sheet as on 31st March, 2018 is given below:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 166
Z is admitted as a new partner for 1/4th share under the following terms:
(a) Z is to introduce ₹ 1,25,000 as capital.
(b) Goodwill of the firm was valued at nil.
(c) It is found that the creditors included a sum of ₹ 7,500 which was not to be paid. But it was also found that there was a liability for compensation to Workmen amounting to ₹ 10,000.
(d) Provision for Doubtful Debts is to be created @ 10% on debtors.
(e) In regard to the Partners Capital Accounts present fixed capital method is to be converted into fluctuating capital method.
(f) Bills of ₹ 20,000 accepted from creditors were not recorded in the books.
(g) X provides ₹ 50,000 loan to the business carrying interest @ 10% p.a.
You are required to prepare Revaluation Account, Partners Capital Accounts, Bank Account and the Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 167
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 168
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 169

Question 72.
Rajesh and Ravi are partners sharing profits in the ratio of 3: 2. Their Balance Sheet at 31st March, 2018 stood as:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 170
Raman is admitted as a new partner introducing a capital of ₹ 16,000. The new profit-sharing ratio is decided as 5 : 3 : 2. Raman is unable to bring in any cash for goodwill. So it is decided to value the goodwill on the basis of Raman’s share in the profits and the capital contributed by him. Following revaluation s are made:
(a) Stock to depreciate by 5% ;
(b) Provision for Doubtful Debts is to be ₹ 500;
(c) Furniture to depreciate by 10% ;
(d) Building is valued at ₹ 40,000.
Show necessary Ledger Accounts and Balance Sheet of new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 171
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 172
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 173
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 174
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 175

Question 73.
A and B are partners in a firm sharing profits in the ratio of 3 : 2. They admit C as a partner on 1st April, 2018 on which date the Balance Sheet of the firm was:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 176
You are required to prepare the Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm after considering the following:
(a) C brings in ₹ 30,000 as capital for 1/4th share. He also brings ₹ 10,000 for his share of goodwill.
(b) Part of the Stock which had been included at cost of ₹ 2,000 had been badly damaged in storage and could only expect to realise ₹ 400.
(c) Bank Charges had been overlooked and amounted to ₹ 200 for the year 2017-18.
(d) Depreciation on Building of ₹ 3,000 had been omitted for the year 2017-18.
(e) A credit for goods for ₹ 800 had been omitted from both purchases and creditors although the goods had been correctly included in Stock.
(f) An expense of ₹ 1,200 for insurance premium was debited in the Profit and Loss Account of 2017-18 but ₹ 600 of this are related to the period after 31st March, 2018.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 177
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 178
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 179
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 180

Question 74.
A and B are partners in a firm. The net profit of the firm is divided as follows: 1/2 to A, 1/3 to B and 1/6 carried to a Reserve. They admit C as a partner on 1st April, 2018 on which date, the Balance Sheet of the firm was:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 181
Following are the required adjustments on admission of C:
(a) C brings in ₹ 25,000 towards his capital.
(b) C also brings in ₹ 5,000 for 1/5 th share of goodwill.
(c) Stock is undervalued by 10%.
(d) Creditors include a contingent liability of ₹ 4,000, which has been decided by the court at ₹ 3,200.
(e) In regard to the Debtors , the following Debts proved Bad or Doubtful
₹ 2,000 due from X bad to the full extent.
₹ 4,000 due from insolvent, estate expected to pay only 50%.
You are required to prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 182
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 183
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 184

Question 75.
Following is the Balance Sheet of the firm, Ashirvad, owned by A, B and C who share profits and losses of the business in the ratio of 3 : 2 : 1.
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 185
On 1st April, 2018, they admit D as a partner on the following conditions:
(a) D will bring in ₹ 1,20,000 as his capital and also ₹ 30,000 as goodwill premium for a quarter of the share in the future profits/losses of the firm.
(b) The values of the fixed assets of the firm will be increased by 10% before the admission of D.
(c) Mohan, an old customer whose account was written off as bad debts , has promised to pay ₹ 3,000 in full settlement of his dues.
(d) The future profits and losses of the firm will be shared equally by all the partners.
Pass the necessary journal entries and Prepare Revaluation Account, Partners Capital Accounts and opening Balance Sheet of the new firm.
Note: There will be no entry for the promise made by Mohan, since it is an event and not a transaction. There is another view, ₹ 3,000 is to be considered as bad debts recovered. In this situation result will be as follows:
Gain( Profit) on Revaluation – ₹ 36,000; Capital A/c’s: A – ₹ 1,66,000; B – ₹ 1,42,000; C – ₹ 1,16,000; D – ₹ 1,20,000; Balance Sheet Total – ₹ 5,72,000.
Solution:
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TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 187
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 188
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 188
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 190
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 191

Question 76.
A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. Following is their Balance Sheet as at 31st March, 2018:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 192
C is admitted as a partner on 1st April, 2018 on the following terms:
(a) C is to pay ₹ 20,000 as capital for 1/4th share. He also pays ₹ 5,000 as premium for goodwill.
(b) Debtors amounted to ₹ 3,000 is to be written off as bad and a Provision of 10% is created against Doubtful Debts on the remaining amount.
(c) No entry has been passed in respect of a debt of ₹ 300 recovered by A from a customer, which was previously written off as bad in previous year. The amount is to be paid by A.
(d) Investments are taken over by B at their market value of ₹ 4,900 against cash payment.
You are required to prepare Revaluation Account, Partner’s Capital Accounts and new Balance Sheet.
Solution:
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TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 194
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 195
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 196

Question 77.
X and Y are partners sharing profits and losses in the ratio of 3/4 and 1/4. Their Balance Sheet as at 31st March, 2018 is:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 197
They admit Z into partnership on 1st April, 2018 on the following terms:
(a) Goodwill is to be valued at ₹ 1,00,000.
(b) Stock and Furniture to be reduced by 10%.
(c) A Provision for Doubtful Debts is to be created @ 5% on Sundry Debtors.
(d) The value of Land and Building is to be appreciated by 20%.
(e) Z pays ₹ 50,000 as his capital for 1/5th share in the future profits.
You are required to show Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Note: Z’s Share of Goodwill ₹ 20,000 (i.e, ₹ 1,00,000 x 1/5 ) can be adjusted through Z’s Current A/c. In that situation, Partners Capital A/cs: X – ₹ 1,87,875; Y – ₹ 92,625; Z – ​₹ 50,000; Z’s Current A/c (Dr.) – ​₹ 20,000; Balance Sheet Total – ₹ 5,18,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 198
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 199
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 200
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 201

Question 78.
Deepika and Rajshree are partners in a firm sharing profits and losses in the ratio of 3 : 2 . On 31st March,2018 their Balance Sheet was:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 202
On the above date, the partners decided to admit Anshu as a partner on the following terms:
(a) The new profit-sharing ratio of Deepika, Rajshree and Anshu will be 5 : 3 : 2 respectively.
(b) Anshu shall bring in ₹ 32,000 as his capital.
(c) Anshu is unable to bring in any cash for his share of goodwill. Partners therefore, decide to calculate the goodwill on the basis of Anshu’s share in the profits and the capital contribution made by her to the firm.
(d) Plant and Machinery is to be valued at ₹ 60,000, Stock at ₹ 40,000 and the Provision for Doubtful Debts is to be maintained at ₹ 4,000. Value of Land and Building has appreciated by 20%. Furniture has been depreciated by 10%.
(e) There is and additional liability of ₹ 8,000 being outstanding salary payable to employees of the firm. This liability is not included in the outstanding liabilities, stated in the above Balance Sheet. Partners decide to show this liability in the books of account of the reconstituted firm.
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of Deepika, Rajshree and Anshu.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 203
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 204
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 205
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 206

Question 79.
X and Y are partners sharing profits in the ratio of 2 : 1. Their Balance Sheet as at 31st March, 2018 was:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 207
They admit Z into partnership on the same date on the following terms;
(a) Z brings in ₹ 40,000 as his capital and he is given 1/4th share in profits.
(b) Z brings in ₹ 15,000 for goodwill, half of which is withdrawn by old partners.
(c) Investments are valued at ₹ 10,000. X takes over Investments at this value.
(d) Typewriter is to be depreciated by 20% and Fixed Assets by 10%.
(e) An unrecorded stock of Stationery on 31st March, 2018 is ₹ 1,000.
(f) By bringing in r withdrawing cash, the Capitals of X and Y are to be made proportionate to that of Z on their profit-sharing basis.
Pass journal entries, prepare Revaluation Account, Capital Accounts and new Balance Sheet of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 208
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 210
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 209
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 211
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 212
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 213
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 214

Question 80.
A and B are in partnership sharing profits and losses in the proportion of 2/3rd and 1/3rd respectively. Their Balance Sheet as at 31st March, 2018 was: Cash ₹ 1,000; Sundry Debtors ₹ 15,000; Stock ₹ 22,000; Plant and Machinery ₹ 4,000; Sundry Creditors ₹ 2,000; Bank Overdraft ₹ 15,000; A’s Capital ₹ 15,000; B’s Capital ₹ 10,000.
On 1st April, 2018 they admitted into partnership on the following terms:
(a) C to purchase one-quarter of the goodwill for ₹ 3,000 and provide ₹ 10,000 as capital. C brings in necessary cash for goodwill and capital.
(b) Profits and Losses are to be shared in the proportion of one-half to A, one-quarter to B and one quarter to C.
(c) Plant and Machinery is to be reduced by 10% and ₹ 500 are to be provided for estimated Bad Debts. Stock is to be taken at a valuation of ₹ 24,940.
(d) By bringing in or withdrawing cash the capitals of A and B are to be made proportionate to that of C on their profit-sharing basis.
Prepare necessary Ledger Accounts in the books of the firm relating to the above arrangement and submit the opening Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 215
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 216
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 217
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 218

Question 81.
A and B were partners in a firm sharing profits in 3 : 1 ratio. They admitted C as a partner for 1/4th share in the future profit. C was to bring ₹ 60,000 for his capital. The Balance Sheet of A and B as at 1st April, 2018, the date on which C was admitted, was:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 219TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 221
The other terms agreed upon were:
(a) Goodwill of the firm was valued at ₹ 24,000.
(b) Land and Building were valued at ₹ 65,000 and Plant and Machinery at ₹ 60,000.
(c) Provision for Doubtful Debts was found in excess by ₹ 400.
(d) A liability of ₹ 1,200 included in Sundry Creditors was not likely to arise.
(e) The capitals of the partners be adjusted on the basis of C’s contribution of capital to the firm.
(f) Excess of shortfall, if any, be transferred to Current Accounts.
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 286
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 222
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 223
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 224

Question 82.
The Balance Sheet of X, Y and Z who share profits and losses in the ratio of 3 : 2 : 1, as o 1st April, 2018 is as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 225
On the above date, W is admitted as a partner on the following terms:
(a) W will bring ₹ 50,000 as his capital and get 1/6th share in the profits.
(b) He will bring necessary amount for his share of goodwill premium. Goodwill of the firm is valued at ₹ 90,000.
(c) New profit-sharing ratio will be 2 : 2 : 1 : 1.
(d) A liability of ₹ 7,004 will be created against bills receivable discounted earlier but now dishonored.
(e) The value of stock, furniture and investments is reduced by 20%, whereas the value of Land and Building and Plant and Machinery will be appreciated by 20% and 10% respectively.
(f) Capital Accounts of the partners will be adjusted on the basis of W’s Capital through their Current Accounts.
Prepare Revaluation Account, Partners Current Accounts and Capitals Accounts.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 226
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 227
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 228
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 229

Question 83.
Shikhar and Rohit were partners in a firm sharing profits int he ratio of 7 : 3. On 1st April, 2013, they admitted Kavi as a new partner for 1/4th share in profits of the firm. Kavi brought ₹ 4,30,000 as his capital and ₹ 25,000 for his share of goodwill premium. The Balance Sheet of Shikhar and Rohit as on 1st April, 2013 was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 230
It was agreed that:
(a) the value of Land and Building will be appreciated by 20%.
(b) the value of Machinery will be depreciated by 10%.
(c) the liabilities of Workmen’s Compensation Fund were determined at ₹ 50,000.
(d) capitals of Shikhar and Rohit will be adjusted on the basis of Kavi’s capital and actual cash to be brought in or to be paid off as the case may be.
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 231
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 232
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 233
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 234
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 235
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 236

Question 84.
Raghu and Rishu are partners sharing profits in the ratio 3 : 2. Their Balance Sheet as at 31st March, 2009 was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 237
Z is admitted as a new partner on 1st April, 2018 on the following terms:
(a) Provision for doubtful debts is to be maintained at 5% on Debtors.
(b) Outstanding rent amounted to ₹ 15,000.
(c) An accrued income of ₹ 4,500 does not appear in the books of the firm. It is now to be recorded.
(d) X takes over the Investments at an agreed value of ₹ 18,000.
(e) New Profit-sharing Ratio of partners will be 4 : 3 : 2.
(f) Z will bring in ₹ 60,000 as his capital by cheque.
(g) Z is to pay an amount equal to his share in firm’s goodwill valued at twice the average profits of the last three years which were ₹ 90,000 ; ₹ 78,000 and ₹ 75,000 respectively.
(h) Half of the amount of the goodwill is to be withdrawn by X and Y.
You are required to pass journal entries, prepare Revaluation Account, Partners Capital and Current Accounts and the Balance Sheet of the new firm.
Rishabh was admitted on that date for 1/4th share of profit on the following terms:
(a) Rishabh will bring ₹ 50,000 as his share of capital.
(b) Goodwill of the firm is valued at ₹ 42,000 and Rishabh will bring his share of goodwill in cash.
(c) Buildings were appreciated by 20%.
(d) All Debtors were good.
(e) There was a liability of ₹ 10,800 included in Creditors which was not likely to arise.
(f) New profit-sharing ratio will be 2 : 1 : 1.
(g) Capital of Raghu and Rishu will be adjusted on the basis of Rishabh’s share of capital and any excess or deficiency will be made by withdrawing or bringing in cash by the concerned partners as the case may be.
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 238
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 239
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 240
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 241

Question 85.
Following is the Balance Sheet of Abha and Binay as at 31st March, 2014:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 242
Chitra was admitted as a partner for 1/4th share in the profits of the firm. It was decided that:
(a) Bad Debts amounted to ₹ 1,500 will be written off.
(b) Stock worth ₹ 8,000 was taken over by Abha and Binay at Book Value in their profit-sharing ratio. The remaining stock was valued at ₹ 2,500.
(c) Plant and Machinery and Goodwill were valued at ₹ 32,000 and ₹ 20,000 respectively.
(d) Chitra brought her share of goodwill in cash.
(e) Chitra will bring proportionate capital and the capitals of Abha and Binay will be adjusted in their profit-sharing ratio by bringing in or paying off cash as the case may be.
Prepare Revaluation Account and Partners Capital Accounts.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 243
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 244
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 245

Question 86.
M and N were partners in a firm sharing profits in the ratio of 3 : 2 : 1. Their Balance Sheet on 31st March, 2015 was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 246
On the above date, O was admitted as a new partner and it was decided that:
(i) The new profit-sharing ratio between L, M, N and O will be 2 : 2 : 1 : 1.
(ii) Goodwill of the firm was valued at ₹ 1,80,000 and O brought his share of goodwill premium in cash.
(iii) The market value of investments was ₹ 36,000.
(iv) Machinery will be reduced to ₹ 58,000.
(v) A creditor of ₹ 6,000 was not likely to claim the amount and hence was to be written off.
(vi) O will bring proportionate capital so as to give him 1/6th share in the profits of the firm.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 247
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 248
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 249
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 250

Question 87.
A and B are partners in a firm sharing profits and losses in the ratio 3 : 1. They admit C for 1/4th share on 31st March, 2014 when their Balance Sheet was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 251
The following adjustments were agreed upon:
(a) C brings ₹ 16,000 as goodwill and proportionate capital.
(b) Bad Debts amounted to ₹ 3,000.
(c) Market value of Investments is ₹ 4,500.
(d) Liability on account of workmen compensation reserve amounted to ₹ 2,000.
Prepare Revaluation Account and Partners Capital Accounts.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 252
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 253

Question 88.
Pradeep and Dhanraj were partners in a firm sharing profits in the ratio of 3 : 1. Their Balance Sheet on 31st March, 2018 was:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 254
They admitted Leander as a new partner on this date. New profit-sharing ratio is agreed as 3 : 2 : 3. Leander brings in proportionate capital after the following adjustments:
(a) Leander brings ₹ 16,000 as his share fo goodwill.
(b) Provisions for Doubtful Debts is to be reduced by ₹ 2,000.
(c) There is an old Typewriter valued at ₹ 2,400. It does not appear in the books of the firm. It is now to be recorded.
(d) Patents are valueless.
Prepare Revaluation Account, Capital Accounts and opening Balance Sheet of Pradeep, Dhanraj and Leander.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 255
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 256
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 257
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TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 259
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 260

Question 89.
Mohan and Sohan are in partnership sharing profits in the proportion of 3/5th and 2/5th respectively. Their Balance Sheet as at 31st March, 2018 was:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 261
They decide to admit Rohan to a 1/3rd share upon the terms that he is to pay into the business ₹ 1,000 as Goodwill and sufficient Capital to give him a 1/3rd share of the total capital of the new firm. It was agreed that the Provision for Doubtful Debts be reduced to ₹ 100 and the Stock be revalued at ₹ 2,000 and that the Plant be reduced to ₹ 500. You are required to record the above in the Ledger of the firm and show Balance Sheet of the new partnership.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 262
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 263
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 264
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 265
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 266

Question 90.
Following is the Balance Sheet of X and Y as at 31st March, 2018. Z is admitted as a partner on that date when the position of X and Y was:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 267
X and Y share profits in the proportion of 3 : 2. The following terms of admission are agreed upon:
(a) Revaluation of assets: Building ₹ 18,000; Stock ₹ 16,000.
(b) The liability on Workmen Compensation Reserve is determined at ₹ 2,000.
(c) Z brought as his share of goodwill ₹ 10,000 in cash.
(d) Z was to bring in further cash as would make his capital equal to 20% of the combined capital of X and after above revaluation and adjustments are carried out.
(e) The further profit-sharing proportions were: X – 2/5th, Y – 2/5th and Z – 1/5th.
Prepare new Balance Sheet of the firm and Capital Accounts of the Partners.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 268
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 268
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 270
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 271
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 272

Question 91.
A and B are partners sharing profits in the ratio of 3 : 2. They admit C as a new partner from 1st April, 2018. They have decided to share future profits in the ratio of 4 : 3 : 3. The Balance Sheet as at 31st March, 2018 is given below:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 273
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 274
Terms of C’s admission are as follows:
(i) C contributes proportionate capital and 60% of his share of goodwill in cash.
(ii) Goodwill is to be valued at 2 years purchase of super profit of last three completed years. Profits for the years ended 31st March were: 2016 – ₹ 4,80,000; 2017 – ₹ 9,30,000; 2018 – ​₹ 13,80,000. The normal profit is ​₹ 5, 30,000 with same amount of capital invested in similar industry.
(iii) Land and Building was found undervalued by ​₹ 1,00,000.
(iv) Stock was found undervalued by ​₹ 31,000.
(v) Provision for Doubtful Debts is to be made equal to 5% of the debtors.
(vi) Claim on account of Workmen Compensation is ​₹ 11,000. Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 275
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 276
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 277
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 278

Question 92.
Kalpana and Kanika were partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2018, they admitted Karuna as a new partner for 1/5th share in the profits of the firm. The Balance Sheet of the Kalpana and Kanika as on 1st April, 2018 was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 279
It was agreed that;
(a) the value of Land and Building will be appreciated by 20%.
(b) the value of plant be increased by ₹ 60,000.
(c) Karuna will bring ₹ 80,000 for her share of goodwill premium.
(d) the liabilities of Workmen’s Compensation Fund were determined at ₹ 60,000.
(e) Karuna will bring in cash as capital to the extent of 1/5th share of the total capital of the new firm.
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 280
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 281
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 282
TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner image - 283

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TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit – Sharing Ratio Among the Existing Partners

TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit – Sharing Ratio Among the Existing Partners – Here are all the TS Grewal solutions for Class 12 Accountancy Chapter 3. This solution contains questions, answers, images, explanations of the complete Chapter 3 titled Change in Profit – Sharing Ratio Among the Existing Partners of Accountancy taught in Class 12. If you are a student of Class 12 who is using TS Grewal Textbook to study Accountancy, then you must come across Chapter 3 Change in Profit – Sharing Ratio Among the Existing Partners. After you have studied lesson, you must be looking for answers of its questions. Here you can get complete TS Grewal Solutions for Class 12 Accountancy Chapter 3 Change in Profit – Sharing Ratio Among the Existing Partners in one place.

TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit – Sharing Ratio Among the Existing Partners

Question 1.
A and B are sharing profits and losses equally. With effect from 1st April, 2018, they agree to share profits in the ratio of 4 : 3. Calculate individual partner’s gain or sacrifice due to the change in ration.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 1

Question 2.
X, Y and Z are sharing profits and losses in the ratio of 5 : 3 : 2. With effect from 1st April, 2018, they decide to share profits and losses in the ratio of 5 : 2 : 3. Calculate each Partner’s gain or sacrifice due to the change in ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 2

Question 3.
X, Y and Z are sharing profits and losses in the ratio of 5 : 3 : 2. With effect from 1st April, 2018, they decide to share profits and losses equally. Calculate each partner’s gain or sacrifice due to the change in ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 3

Question 4.
A, B and C are partners sharing profits and losses in the ratio of 5 : 4 : 1. Calculate new profit-sharing ratio, sacrificing ratio and gaining ratio in each of the following cases:
Case 1. C acquires 1/5th share from A.
Case 2. C acquires 1/5th share equally form A and B.
Case 3. A, B and C will share future profits and losses equally.
Case 4. C acquires 1/10th share of A and 1/2 share of B.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 4
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 5
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 6
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 7

Question 5.
A, B and C shared profits and losses in the ratio of 3 : 2 : 1 respectively. With effect from 1st April, 2018, they agreed to share profits equally. The goodwill of the firm was valued at ₹ 18,000. Pass necessary Journal entries when:
(a) Goodwill Account is not opened; and
(b) Goodwill Account is opened.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 8
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 9
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 10

Question 6.
X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2 . From 1st April, 2018, they decided to share profits and losses equally.
The Partnership Deed provides that in the event of any change in the profit-sharing ratio, the goodwill should be valued at two years purchase of
the average profit of the preceding five years . The profits and losses of the preceding years are:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 11
You are required to calculate goodwill and pass journal entry.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 12
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 13

Question 7.
Mandeep, Vinod and Abbas are partners sharing profits and losses in the ratio of 3 : 2 : 1. From 1st April, 2018, they decided to share profits and losses equally. The Partnership Deed provides that in the event of any change in the profit-sharing ratio, the goodwill shall be valued at three years purchase of the average profit of last five years . The profits and losses of the past five years are:
Profit – Year ended 31st March, 2014 – ₹ 1,00,000; 2015 – ₹ 1,50,000; 2017 – ₹ 2,00,000; 2018 – ₹ 2,00,000;
Loss – Year ended 31st March, 2016 – ₹ 50,000.
Pass the journal entries showing the working.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 14
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 15

Question 8.
X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2 , decided to share future profits and losses equally with effect from 1st April, 2018. On that date , the goodwill appeared in the books at ₹ 12,000. But it was revalued at ₹ 30,000. Pass journal entries assuming that goodwill will not appear in the books of account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 16
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 17

Question 9.
A and B are partners in a firm sharing profits in the ratio of 2 : 1 . They decided with effect from 1st April, 2017, that they would share profits in the ratio of 3 : 2 . But, this decision was taken after the profit for the year 2017-18 amounting to ₹ 90,000 was distributed in the old ratio.
Value of firm’s goodwill was estimated on the basis of aggregate of two years profits preceding the date decision became effective.
The profits for 2015-16 and 2016-17 were ₹ 60,000 and ₹ 75,000 respectively. It was decided that Goodwill Account will not be opened in the books of the firm and necessary adjustment be made through Capital Accounts which, on 31st March, 2018 stood, at ₹ 1,50,000 for A and ₹ 90,000 for B. Pass necessary journal entries and prepare Capital Accounts.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 18
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 19
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 20
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 21

Question 10.
Jai and Raj are partners sharing profits in the ratio of 3 : 2 . With effect from 1st April, 2018, they decided to share profits equally. Goodwill appeared in the books at ₹ 25,000 . As on 1st April, 2018, it was valued at ₹ 1,00,000 . They decided to carry goodwill in the books of the firm.
Pass the journal entry giving effect to the above.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 22

Question 11.
X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2 . With effect from 1st April, 2018, they decided to share future profits equally. On the date of change in the profit-sharing ratio, the Profit and Loss Account showed a credit balance of ₹ 1,50,000. Record the necessary journal entry for the distribution of the balance int he Profit and Loss Account immediately before the change in the profit-sharing ratio.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 23

Question 12.
A and B are partners in a firm sharing profits in the ratio of 4 : 1 . They decided to share future profits in the ratio of 3 : 2 w.e.f. 1st April,2018 . On that day, Profit and Loss Account showed a debit balance of ₹ 1,00,000.Pass journal entry to give effect to the above.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 24

Question 13.
X, Y and Z are sharing profits and losses in the ratio of 5 : 3 : 2 . They decided to share future profits and losses in the ratio of 2 : 3 : 5 with effect from 1st April, 2018. They also decided to record the effect of the following accumulated profits,losses and reserves without affecting their book values by passing a single entry.
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 93
Pass an Adjustment Entry.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 25
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 26

Question 14.
A, B and C who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in  the ratio of 2 : 3 : 5 . Give the journal entry to distribute Workmen Compensation Reserve of ₹ 1,20,000 at the time of change in profit-sharing ratio, when:
(i) no information is given.
(ii) there is no claim against it.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 27

Question 15.
X, Y and Z who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5. Give the journal entry to distribute Workmen Compensation Reserve of ₹ 1,20,000 at the time of change in profit-sharing ratio, when there is a claim of ₹ 80,000 against it.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 28
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 29

Question 16.
X, Y and Z who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in  the ratio of 2 : 3 : 5 . with effect from 1st April, 2018. Workmen Compensation Reserve appears at ₹ 1,20,000 in the Balance Sheet as at 31st March, 2018 and Workmen Compensation Claim is estimated at  ₹ 1,50,000. Pass journal entries for the accounting treatment of Workmen Compensation Reserve.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 30

Question 17.
A, B and C who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5 . Give the journal entry to distribute Investments Fluctuation Reserve of ₹ 20,000 at the time of change in profit-sharing ratio, when investment (market value ₹ 95,000) appears in the books at ₹ 1,00,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 31

Question 18.
Nitin, Tarun and Amar are partners sharing profits equally and decide  to share profits in the ratio of 2 : 2 : 1 w.e.f . 1st April, 2018. The extract of their Balance Sheet as at 31st March, 2018 is as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 32
Pass the journal entries in each of the following situations:
(i) When its Market Value is not given;
(ii) When its Market Value is given as ₹ 4,00,000;
(iii) When its Market Value is given as ₹ 4,24,000;
(iv) When its Market Value is given as ₹ 3,70,000;
(v) When its Market Value is given as ₹ 3,10,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 33
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 34

Question 19.
X, Y are partners sharing profits in the ratio of 2 : 1 . On 31st March, 2018, their Balance Sheet showed General Reserve of ₹ 60,000. It was decided that in future they will share profits and losses in the ratio of 3 : 2 . Pass necessary journal entry in each of the following alternative cases:
(i) If General Reserve is not to be shown in the new Balance Sheet.
(ii) If General Reserve is to be shown in the new Balance Sheet.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 35
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 36

Question 20.
X and Y are in partnership sharing profits in the ratio of 2 : 3 . With effect from 1st April, 2018, they agreed to share profits in the ratio f 1 : 2 . For this purpose, goodwill of the firm is to be valued at two years purchase of the average profit of last three years , which were ₹ 1, 50,000; ₹ 1,60,000 and ₹ 2,00,000 respectively. The reserves appear in the books at ₹ 1,10,000. Partners decide to continue showing Reserves in the books . You are required to give effect to the change by passing a single journal entry.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 37
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 38
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 39

Question 21.
X, Y and Z share profits as 5 : 3 : 2 . They decide to share their future profits as 4 : 3 : 3 with effect from 1st April, 2018. On this date the following revaluations have taken place :
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 40
Pass necessary adjustment entry to be made because of the above changes in the values of assets and liabilities. However, old values will continue in the books.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 41
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 42

Question 22.
Ashish, Aakash and Amit are partners sharing profits and losses  equally. The Balance Sheet as at 31st March, 2018 was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 43
The partners decided to share profits in the ratio of 2 ; 2 : 1 w.e.f. 1st April, 2018. They also decided that:
(i) Value of stock to be reduced to ₹ 1,25,000.
(ii) Value of machinery to be decreased by 10%.
(iii) Land and Building to be appreciated by ₹ 62,000.
(iv) Provision for Doubtful Debts to be made @ 5% on Sundry Debtors.
(v) Aakash was to carry out reconstitution of the firm at a remuneration of ₹ 10,000.
Pass necessary journal entries to give effect to the above.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 44

Question 23.
A, B and C are partners sharing profits and losses in the ratio of 5 : 3 : 2 . Their Balance Sheet as at 31st March, 2017 stood as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 94
They decided to share profits equally w.e.f 1st April, 2017. They also agreed that:
(i) Value of Land and Building be decreased by 5%.
(ii) Value of Machinery be increased. by 5%.
(iii) A Provision for Doubtful Debts be created @ 5% on Sundry Debtors.
(iv) A Motor Cycle valued at ₹ 20,000 was unrecorded and is now to be recorded in the books.
(v) Out of Sundry Creditors, ₹ 10,000 is not payable.
(vi) Goodwill is to be valued at 2 years purchase of last 3 years profits. Profits being for
2016-17 – ₹ 50,000 (Loss);
2015-16 – ₹2,50,000 and
2014-15 – ₹ 2,50,000.
(vii) C was to carry out the work for reconstituting the firm at a remuneration ( including expenses) of ₹ 5,000. Expenses came to ₹ 3,000.
Pass journal entries and prepare Revaluation Account.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 46
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 47
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 48
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 49

Question 24.
A, B and C are partners sharing profits and losses in the ratio of 2 : 2 : 1 . They decided to share profit w.e.f 1st April, 2018 in the ratio of 5 : 3 : 2 . They also decided not to change the values of assets and liabilities in the books of account . The book values and revised values of assets and liabilities as on the date of change were as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 50
Pass an adjustment entry.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 51
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 52

Question 25.
X, Y and Z are partners sharing profits and losses in the ratio of 7 : 5 : 4 . Their Balance Sheet as at 31st March, 2018 stood as:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 53
Partners decided that with effect from 1st April, 2018 , they will share profits and losses in the ratio of 3 : 2 : 1. For this purpose, goodwill of the
firm was valued at ₹ 1,50,000. The partners neither want to record the goodwill nor want to distribute the General Reserve and profits.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 54
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 55
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 56

Question 26.
A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1 . Their Balance Sheet as on 31st March, 2015 was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 57
From 1st April, 2015, A, B and C decided to share profits equally. For this it was agreed that:
(i) Goodwill of the firm will be valued at ₹ 1,50,000.
(ii) Land will be revalued at ₹ 80,000 and building be depreciated by 6%.
(iii) Creditors of ₹ 6,000 were not likely to be claimed and hence should be written off.
Prepare Revaluation Account , Partners Capital Accounts and Balance Sheet of the reconstituted firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 58
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 59
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 60

Question 27.
A and B are partners sharing profits in the ratio of 4 : 3 . Their Balance Sheet as at 31st March, 2018 stood as:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 95
They decided that with effect from 1st April, 2018, they will share profits and losses in the ratio of 2 : 1 . For this purpose they decided that:
(i) Fixed Assets are to be depreciated by 10%.
(ii) A Provision for Doubtful Debts of 6% be made on Sundry Debtors.
(iii) Stock be valued at ₹ 1,90,000.
(iv) An amount of ₹ 3,700 included in Creditors is not likely to be claimed.
Partners decided to record the revised values in the books. However, they do not want to disturb the Reserve. You are required to pass journal entries , prepare Capital Accounts of Partners and the revised Balance Sheet.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 62
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 63
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 64
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 65

Question 28.
X, Y and Z are partners in a firm sharing profits and losses as 5 : 4 : 3 . Their Balance Sheet as at 31st March, 2018 was:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 66
From 1st April, 2018, they agree to alter their profit-sharing ratio as 4 : 3 : 2 .It is also decided that:
(a) Furniture be taken at 80% of its value.
(b) Stock be appreciated by 20%.
(c) Plant and Machinery be valued at ₹ 4,00,000.
(d) Outstanding Expenses be increased by ₹ 13,000.
Partners agreed that altered values are not to be recorded in the books and they also do not want to distribute the General Reserve.
You are required to pass a single journal entry to give effect to the above . Also, prepare Balance Sheet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 67
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 68
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 69
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 70
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 71

Question 29.
Balance Sheet of X and Y, who share profits and losses as 5 : 3 , as at 1st April, 2017 is :
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 72
On the above date, they decided to change their profit-sharing ratio to 3 : 5 and agreed upon the following:
(a) Goodwill be valued on the basis of two years purchase of the average profit of the last three years.
Profits for 2014-15 : ₹ 7,500; 2015-16 : ₹ 4,000; 2016-17 : ₹ 6,500.
(b) Machinery and Stock be revalued at ₹ 45,000 and ₹ 8,000 respectively.
(c) Claim on account of workmen compensation is ₹ 6,000.
Prepare Revaluation Account Partners Capital Accounts and the Balance Sheeet of the new firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 73
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 74
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 75
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 76
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 77

Question 30.
Ram, Mohan, Sohan and Hari were partners in a firm sharing profits in the ratio of 4 : 3 : 2 : 1 . On 1st April, 2016 , their Balance Sheet was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 78
From the above date, the partners decided to share the future profits in the ratio of 1 : 2 : 3 : 4 . For this purpose the goodwill of the firm was valued at ₹ 1,80,000. The partners also agreed for the following:
(a) The Claim for Workmen Compensation has been estimated at ₹ 1,50,000.
(b) Adjust the Capitals of the partners according to the new profit-sharing ratio by opening Partners Current Accounts.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 79
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 80
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 81
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 82
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 83

Question 31.
Suresh, Ramesh, Mahesh and Ganesh were partners in a firm sharing profits in the ratio of 2 : 2 : 3 : 3 . On 1st April, 2016 , their Balance Sheet was as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 84
From the above date, the partners decided to share the future profits equally. For this purpose the goodwill of the firm was valued at ₹ 90,000. It was also agreed that:
(a) Claim against Workmen Compensation Reserve will be estimated at ₹ 1,00,000 and fixed assets will be depreciated by 10%.
(b) The Capitals of the partners will be adjusted according to the new profit-sharing ratio. For this, necessary cash will be brought or paid by the partners as the case may be.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 85
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 86
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 87

Question 32.
Following is the Balance Sheet of A and B, who shared Profits and Losses in the ratio of 2 : 1 , as at 1st April, 2018:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 88
On the above date , the partners changed their profit-sharing ratio to 3 : 2 . For this purpose, the goodwill of the firm was valued at ₹ 3,00,000 . The partners also agreed for the following:
(a) The value of Land and Building will be ₹ 5,00,000;
(b) Reserve is to be maintained at ₹ 3,00,000.
(c) The total capital of the partners in the new firm will be ₹ 6,00,000, which will be shared by the partners in their new profit-sharing ratio.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 89
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 90
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 91
TS Grewal Accountancy Class 12 Solutions Chapter 3 Change in Profit - Sharing Ratio Among the Existing Partners - 92

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TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill: Nature and Valuation

TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill: Nature and Valuation – Here are all the TS Grewal solutions for Class 12 Accountancy Chapter 2. This solution contains questions, answers, images, explanations of the complete Chapter 2 titled Goodwill: Nature and Valuation of Accountancy taught in Class 12. If you are a student of Class 12 who is using TS Grewal Textbook to study Accountancy, then you must come across Chapter 2 Goodwill: Nature and Valuation. After you have studied lesson, you must be looking for answers of its questions. Here you can get complete TS Grewal Solutions for Class 12 Accountancy Chapter 2 Goodwill: Nature and Valuation in one place.

TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill: Nature and Valuation

Question 1.
Goodwill is to be valued at three years purchase of four years average profit. Profits for last four years ending on 31st March of the firm were:
2015 ₹ 12,000; 2016 ₹ 18,000; 2017 ₹ 16,000; 2018 ₹ 14,000.
Calculate amount of Goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 1

Question 2.
The profit for the five years ending on 31st March, are as follows:
Year 2014 ₹ 4,00,000; Year 2015 ₹ 3,98,000; Year 2016 ₹ 4,50,000; Year 2017 ₹ 4,45,000; Year 2018 ₹ 5,00,000.
Calculate goodwill of the firm on the basis of 4 years purchase of 5 years average profit.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 2

Question 3.
Calculate value of goodwill on the basis of three years purchase of average profit of the preceding five years which were as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 3
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 4

Question 4.
Calculate the value of firm’s goodwill on the basis of one and half years purchase of the average profit of the last three years. The profit for first year was ₹ 1,00,000, profit for the second year was twice the profit of the first year and for the third year profit was one and half times of the profit of the second year.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 5
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 6

Question 5.
A and B are partners sharing profits in the ratio of 3 : 2. They decided to admit C as a partner from 1st April, 2018 on the following terms:
(i) C will be given 2/5th share of the profit.
(ii) Goodwill of the firm be valued at two years purchase of three years normal average profit of the firm.
profits of the previous three years ended 31st March, were:
2018 – Profit ₹ 30,000 ( after debiting loss of stock by fire ₹ 40,000).
2017 – Loss ₹ 80,000 (includes voluntary retirement compensation paid ₹ 1,10,000).
2016 – Profit ₹ 1,10,000 (including a gain (profir) of ₹ 30,000 on the sale of fixed assets).
you are required to value the goodwell.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 7

Question 6.
X and Y are partners sharing profits and losses in the ratio of 3 : 2. They admit Z into partnership for 1/4th share in goodwill. Z brings in his share of goodwill in cash. Goodwill for this purpose is to be calculated at two years purchase of the average normal profit of past three years. Profits of the last three years ended 31st March, were:
2016 – Profit ₹ 50,000 (including profit on sale of assets ₹5,000).
2017 – Loss ₹ 20,000 (includes loss by fire ₹ 30,000).
2018 – Profit ₹ 70,000 (including insurance claim received ₹ 18,000 and interest on investments and Dividend received ₹ 8,000).
Calculate value of goodwill. Also, calculate goodwill brought in by Z.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 8
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 9

Question 7.
A and B are partners in a firm sharing profits and losses in the ratio of 2 : 1. They decide to take C into partnership for 1/4th share on 1st April, 2018. For this purpose, goodwill is to be valued at four times the average annual profit of the previous four or five years whichever is higher. The agreed profits for goodwill purpose of the past five years are:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 10
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 11
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 12

Question 8.
Sumit purchased Amit’s business on 1st April, 2018. Goodwill was decided to be valued at two years’ purchase of average normal profit of last
four years. The profits for the past four years were:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 13
Books of Account revealed that:
(i) Abnormal loss of ₹ 20,000 was debited to Profit and Loss Account for the year ended 31st March, 2015.
(ii) A fixed asset was sold in the year ended 31st March, 2016 and gain (profit) of ₹ 25,000 was credited to Profit and Loss Account.
(iii) In the year ended 31st March, 2017 assets of the firm were not insured due to oversight. Insurance premium not paid was ₹ 15,000.
Calculate the value of goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 14

Question 9.
X and Y are partners in a firm. They admit Z into partnership for equal share. It was agreed that goodwill will be valued at three years purchase of average profit of last five years. Profits for the last five years were:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 15
Books of Account of the firm revealed that:
(i) The firm had gain (profit) of ₹ 50,000 from sale of machinery sold in the year ended 31st March, 2015. The gain (profit) was credited in Profit and Loss Account.
(ii) There was an abnormal loss of ₹ 20,000 incurred in the year ended 31st March, 2016 because of a machine becoming obsolete in accident.
(iii) Overhauling cost of second hand machinery purchased on 1st July, 2016 amounting to ₹ 1,00,000 was debited to Repairs Account. Depreciation is charged @ 20% p.a. on Written Down Value Method.
Calculate the value of goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 15
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 17

Question 10.
Profits of a firm for the year ended 31st March for the last five years were:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 18
Calculate value of goodwill on the basis of three years purchase of Weighted Average Profit after assigning weights 1, 2, 3, 4 and 5 respectively to the profits for years ended 31st March, 2014, 2015, 2016, 2017 and 2018.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 19

Question 11.
A and B are partners sharing profits and losses in the ratio of 5 : 3. On 1st April, 2018, C is admitted to the partnership for 1/4th share of profits. For this purpose, goodwill is to be valued at two years purchase of last three years profits (after allowing partners remuneration). Profits to be weighted 1 : 2 : 3, the greatest weight being given to last year. Net profit before partners remuneration were: 2015-16: ₹ 2,00,000; 2016-17: ₹ 2,30,000; 2017 -2018: ₹ 2,50,000. The remuneration of the partners is estimated to be ₹ 90,000 p.a. Calculate amount of goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 20
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 21

Question 12.
Manbir and Nimrat are partners and they admit Anahat into partnership. It was agreed to value goodwill at three tears purchase on Weighted Average Profit Method taking profits of last five years. Weights assigned to each year as 1, 2, 3, 4 and 5 respectively to profit for the year ended 31st March, 2014 to 2108. The profit for these years were: ₹ 70,000, ₹ 1,40,000, ₹ 1,00,000, ₹ 1,60,000 and ₹ 1,65,000 respectively.
Scrutiny of books of account revealed following information:
(i) There was an abnormal loss of ₹ 20,000 in the year ended 31st March, 2014.
(ii) There was an abnormal gain (profit) of ₹ 30,000 in the year ended 31st March, 2015.
(iii) Closing Stock as on 31st March, 2017 was overvalued by ₹ 10,000.
Calculate the value of goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 22
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 2

Question 13.
Calculate the goodwill of a firm on the basis of three years purchase of the weighted average profit of the last four years. The appropriate weights to be used and profits are:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 24
On a scrutiny of the accounts, the following matters are revealed:
(i) On 1st December, 2016, a major repair was made in respect of the plant incurring ₹ 30,000 which was charged to revenue. The said sum is agreed to be capitalised for goodwill calculation subject to adjustment of depreciation of 10% p.a. on reducing balance method.
(ii) The closing stock for the year 2015-16 was overvalued by ₹ 12,000.
(iii) To cover management cost, an annual charge of ₹ 24,000 should be made for the purpose of goodwill valuation.
(iv) In 2015-16, a machine having a book value of ₹ 10,000 was sold for ₹ 11,000 but the proceeds were wrongly credited to Profit and Loss Account. No effect has been given to rectify the same. Depreciation is charged on machine @ 10% p.a. on reducing balance method.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 25
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 26

Question 14.
Gupta and Bose had a firm in which they had invested ₹ 50,000. On an average, the profits were ₹ 16,000. The normal rate of return in the industry is 15%. Goodwill is to be valued at four years purchase of profits in excess of profits @ 15% on the money invested. Value th goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 27

Question 15.
The total capital of the firm of Sakshi, Mehak and Megha is ₹ 1,00,000 and the market rate of interest is 15%. The net profits for the last 3 years were ₹ 30,000; ₹ 36,000 and ₹ 42,000. Goodwill is to be valued at 2 years purchase of the last 3 years super profits. Calculate the goodwill of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 28

Question 16.
The average net profit expected in future by XYZ firm is ₹ 36,000 per year. Average capital employed in the business by the firm is ₹ 2,00,000. The normal rate of return from capital invested in this class of business in 10%. Remuneration of the partners is estimated to be ₹ 6,000 p.a. Find out the value of goodwill on the basis of two years purchase of super profit.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 29

Question 17.
A partnership firm earned net profits during the last three years ended 31st March, as follows: 2016 – ₹ 17,000; 2017 – ₹ 20,000; 2018 – ₹ 23,000.
The capital investment in the firm throughout the above-mentioned period has been ₹ 80,000. Having regard to the risk involved, 15% is considered to be a fair return on the capital. Calculate value of goodwill on the basis of two years purchase of average super profit earned during the above-mentioned three years.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 30

Question 18.
A partnership firm earned net profits during the past three years as follows:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 31
Capital investment in the firm throughout the above-mentioned period has been ₹ 4,00,000. Having regard to the risk involved, 15% in considered to be a fair return on the capital. The remuneration of the partners during this period is estimated to be ₹ 1,00,000 p.a.
Calculate value of goodwill on the basis of two years purchase of average super profit earned during the above-mentioned three years.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 32
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 33

Question 19.
A business earned an average profit of ₹ 8,00,000 during the last few years. The normal rate of profit in the similar type of business is 10%. The total value of assets and liabilities of the business were ₹ 22,00,000 and ₹ 5,60,000 respectively. Calculate the value of goodwill of the firm by super profit method if it is valued at 2\(\frac { 1 }{ 2 }\) years purchase of super profits.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 34

Question 20.
Capital of the firm of Sharma and Verma is ₹ 2,00,000 and the market rate of interest is 15%. Annual salary to partners is ₹ 12,000 each. The profits for the last three years were ₹ 60,000; ₹ 72,000 and ₹ 84,000. Goodwill is to be valued at 2 years purchase of last 3 years average super profit. Calculate goodwill of the firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 35
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 36

Question 21.
A and B are equal partners. They decide to admit C for 1/3rd share. For the purpose of admission of C, goodwill of the firm is to be valued at four years purchase of super profit. Average capital employed in the firm is ₹ 1,50,000. Normal rate of return may be taken as 15% p.a. Average profit of the firm is ₹ 40,000. Calculate value of goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 37

Question 22.
On 1st April, 2018, an existing firm had assets of ₹ 75,000 including cash of ₹ 5,000. Its creditors amounted to ₹ 5,000 on that date. The firm had a Reserve of ₹ 10,000 while Partners Capital Accounts showed a balance of ₹ 60,000. If Normal Rate of Return is 20% and goodwill of the firm is valued at ₹ 24,000 at four years purchase of super profit, find average profit per year of the existing firm.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 38

Question 23.
The average profit earned by a firm is ₹ 1,00,000 which includes undervaluation of stock of ₹ 40,000 on an average basis. The capital invested in the business is ₹ 6,30,000 and the normal tare of return is 5%. Calculate goodwill of the firm on the basis of 5 time the super profit.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 39

Question 24.
The average profit earned by a firm is ₹ 7,50,000 which includes overvaluation of stock of ₹ 30,000 on an average basis. The capital invested in the business is ₹ 4,20,000 and the normal tare of return is 15%. Calculate goodwill of the firm on the basis of 3 time the super profit.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 40

Question 25.
Ayub and Amit are partners in a firm and they admit Jaspal into partnership w. e. f. 1st April, 2018. They agreed to value goodwill at 3 years purchase of Super Profit Method for which they decided to average profit of last 5 years. The profit for the last 5 years were:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 41
The firm has total assets of ₹ 20,00,000 and Outside Liabilities of ₹ 5,00,000 as on that date. Normal Rate of Return in similar business is 10%.
Calculate value of goodwill.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 42
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 43

Question 26.
From the following information, calculate value of goodwill of the firm by applying Capitalisation Method: Total Capital of the firm ₹ 16,00,000.
Normal rate of return 10%. Profit for the year ₹ 2,00,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 44

Question 27.
A business has earned average profit of ₹ 1,00,000 during the last few years. Find out the value of goodwill by capitalisation method, given that the assets of the business are ₹ 10,00,000 and its external liabilities are ₹ 1,80,000. The normal rate of return is 10%.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 45

Question 28.
Form the following particulars, calculate value of goodwill of a firm by applying Capitalisation of Average Profit Method:
(i) Profits of last five consecutive years ending 31st March are: 2018 – ₹ 54,000; 2017 – ₹ 42,000; 2016 – ₹ 39,000; 2015 – ₹ 67,000 and 2014 – ₹ 59,000.
(ii) Capitalisation rate 20%.
(iii) Net assets of the firm ₹ 2,00,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 46

Question 29.
A business has earned average profit of ₹ 4,00,000 during the last few years and the normal rate of return in similar business is 10%. Find value of goodwill by:
(i) Capitalisation of Super Profit Method, and
(ii) Super Profit Method if the goodwill is valued at 3 years purchase of super profits.
Assets of the business were ₹ 40,00,000 and its external liabilities ₹ 7,20,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 47
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 48

Question 30.
A firm earns profit of ₹ 5,00,000. Normal Rate of Return in a similar type of business is 10%. The value of total assets (excluding goodwill) and total outsiders liabilities as on the date of goodwill are ₹ 55,00,000 and ₹ 14,00,000 respectively. Calculate value of goodwill according to Capitalisation of Super Profit Method as well as Capitalisation of Average Profit Method.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 49
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 50

Question 31.
Average profit of the firm is ₹ 2,00,000. Total assets of the firm are ₹ 15,00,000 whereas Partners Capital is ₹ 12,00,000. If normal rate of return in a similar business is 10% of the capital employed, what is the value of goodwill by Capitalisation of Super Profit?
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 51

Question 32.
Rajan and Rajani are partners in a firm. Their capitals were Rajan ₹ 3,00,000; Rajani ₹ 2,00,000. During the year 2017-18, the firm earned a profit of ₹ 1,50,000. Calculate the value of goodwill of the firm by capitalisation of super profit assuming that the normal rate of return is 20%.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 52

Question 33.
Average profit of GS & amp Co. is ₹ 50,000 per year. Average capital employed in the business is ₹ 3,00,000. If the normal rate of return of capital employed is 10%, calculate goodwill of the firm by:
(i) Super Profit Method at three years purchase; and
(ii) Capitalisation of Super Profit Method.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 53
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 54

Question 34.
From the following information, calculate value of goodwill of the firm:
(i) At three years purchase of Average Profit.
(ii) At three years purchase of Super Profit.
(iii) On the basis of Capitalisation of Super Profit.
(iv) On the basis of Capitalisation of Average profit.
Information:
(a) Average Capital Employed is ₹ 6,00,000.
(b) Net Profit/(Loss) of the firm for the last three years ended are:
31st March, 2108 – ₹ 2,00,000, 31st March, 2107 – ₹ 1,80,000, and 31st March, 2106 – ₹ 1,60,000.
(c) Normal Rate of Return in similar business is 10%.
(d) Remuneration of ₹ 1,00,000 to partners is to be taken as charge against profit.
(e) Assets of the firm (excluding goodwill, fictitious assets and not-trade investments) is ₹ 7,00,000 whereas Partners Capital is ₹ 6,00,000 and Outside Liabilities ₹ 1,00,000.
Solution:
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 55
TS Grewal Accountancy Class 12 Solutions Chapter 2 Goodwill Nature and Valuation - 56

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