Question : 5. Digvijay, Brijesh and Parakaram were partners in a firm sharing profits in the ratio of 2 : 2 : L Their Balance Sheet as on March 31, 2007 was as follows

Brijesh retired on March 31, 2007 on the following terms
(i) Goodwill of the firm was valued at ? 70,000 and was not to appear in the books.
(ii) Bad debts amounting to ? 2,000 were to be written off.
(iii) Patents were considered as valueless.
Prepare revaluation account, partners’ capital accounts and the balance sheet of Digvijay and Parakaram after Brijesh’s retirement

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Answer :

Note: If no information is given, the amount due to Brijesh (the balance of his capital account) is transferred to his loan account.

Question :6. Radha, Sheela and Meena were in partnership sharing profits and losses in
the proportion of 3:2:1. On April 1, 2007, Sheela retires from the firm. On that
date, their Balance Sheet was as follows:

The terms were
(a) Goodwill of the Firm was valued at ? 13,000.
(b) Expenses owing to be brought down to ? 3,750.
(c) Machinery and Loose Tools are to be valued at 10% less than their book value.
(d) Factory premises are to be revalued at ? 24,300.
Prepare
1. Revaluation account
2. Partners’capital accounts
3. Balance sheet of the firm after retirement of Sheela

Question :7. Pankaj, Naresh and Saurabh are partners sharing profits in the ratio of 3 : 2 :
1. Naresh retired from the firm due to his illness. On that date the Balance
Sheet of the firm was as follows:

Additional Information
(i) 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 Rs. 1,200 and furniture to be brought up to Rs. 45,000.
(ii) Goodwill of the firm be valued at Rs. 42,000.
(iii) Rs. 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.
(iv) New profit sharing ratio of Pankaj and Saurabh is decided to be 5 :1.
Give the necessary ledger accounts the balance sheet of the firm after Naresh’s retirement.

Question :8. Puneet, Pankaj and Pammy are partners in a business sharing profits and
losses in the ratio of 2 : 2 : 1 respectively. Their balance sheet as on March 31,
2007 was as follows:

Mr. Pammy died on September 30, 2007. The partnership deed provided thefollowing:(i) The deceased partner will be entitled to his share of profit up to the date ofdeath calculated on the basis of previous year’s profit.(ii) He will be entitled to his share of goodwill of the firm calculated on thebasis of 3 years’ purchase of average of last 4 years’ profit. The profits forthe last four financial years are given below:for 2003–04; Rs. 80,000; for 2004–05, Rs. 50,000; for 2005–06, Rs. 40,000;for 2006–07, Rs. 30,000.The drawings of the deceased partner up to the date of death amounted toRs. 10,000. Interest on capital is to be allowed at 12% per annum.Surviving partners agreed that Rs. 15,400 should be paid to the executorsimmediately and the balance in four equal yearly instalments with interestat 12% p.a. on outstanding balance.Show Mr. Pammy’s Capital account, his Executor’s account till the settlementof the amount due

Question : 9. Following is the Balance Sheet of Prateek, Rockey and Kushal as on March 31, 2007.

Rockey died on June 30, 2007. Under the terms of the partnership deed, the executors of a deceased partner were entitled to
(a) Amount standing to the credit of the Partner’s capital account.
(b) Interest on capital at 5% per annum.
(c) Share of goodwill on the basis of twice the average of the past three years’ profit.
(d) Share of profit from the closing date of the last financial year to
the date of death on the basis of last year’s profit.
Profits for the year ending on March 31, 2005, March 31, 2006 and March 31, 2007 were Rs. 12,000, Rs. 16,000 and Rs.14,000 respectively. Profits were shared in the ratio of capitals.
Pass the necessary journal entries and draw up Rockey’s capital account to be rendered to his executor.

Question :10. Narang, Suri and Bajaj are partners in a firm sharing profits and losses in proportion of 1 2 , 1 6 and 1 3 respectively. The Balance Sheet on April 1, 2007 was as follows:

Bajaj 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) Bad Debts reserve is to be increased to Rs. 1,500.
(d) Goodwill is valued at Rs. 21,000 on Bajaj’s retirement.
(e) The continuing partners have decided to adjust their capitals in their new profit sharing ratio after retirement of Bajaj. Surplus/deficit, if any, in their capital accounts will be adjusted through current accounts.