Admission of a Partner — Accountancy STD 12 Commerce — Question

Angad, Raman and Harshit 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 the third party. liabilities have been transferred to Realisation Account:

1. There was a stock of ₹ 90,000. Raman took over 50% of the stock at 10% discount and remaining stock was sold at 40% profit on book value.
2. Profit and Loss A/c was showing a debit balance of ₹ 15,000 which was distributed among the partners.
3. A machinery which was not recorded in the books was sold for ₹ 2,000.
4. Angad was paid only ₹ 5,000 (in full settlement) for his loan to the firm which amounted to ₹ 5,500.
5. Realisation expenses amounting to ₹ 5,000 paid by Harshit.
6. There were 100 shares of ₹ 10 each in DCM Ltd. acquired at a cost of ₹ 1,200 which had been written off completely from the books. These shares are valued at ₹ 9 each and divided among the partners in their profit sharing ratio.

A, B and C were in partnership sharing profits in proportion to their capitals. Their Balance Sheet on 31.3.2008 was as follows:On the above date B retired owing to ill health and the following adjustments were agreed upon.

1. Buildings be appreciated by 10%.
2. Provision for doubtful debts be increased to 5% of debtors.
3. Machinery be depreciated by 15%.
4. Goodwill of the firm be valued at ₹ 36,000 and be adjusted into the Capital Accounts of A and C who will share profits in future in the ratio of 3 : 1.
5. A provision be made for outstanding repairs bill of ₹ 3,000.
6. Included in the value of creditors is ₹ 1,800 for an outstanding legal claim, which is not’ likely. to arise.
7. Out of the insurance premium paid ₹ 2,000 is for the next year. The amount was debited to P & L A/c.
8. The partners decide to fix the capital of the new firm. as ₹ 1,20,000 in the profit sharing ratio.
9. B to be paid ₹ 9,000 in cash and the balance to be transferred to his Loan Account.

Prepare the Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new firm after B’s retirement.

X Ltd. issued 50,000 shares of ₹ 10 each at a premium of ₹ 2 per share payable as follows:
₹ 3 on Application
₹ 6 on allotment (including primium) and
₹ 3 on call.
Applications were received for 75,000 shares and pro-rata allotment was made as follows:
To the applicants of 40,000 shares, 30,000 shares were issued and for the rest 20,000 shares were issued. All moneys due were received except the allotment and call money from Ram who had applied for 1,200 shares (out of the group of 40,000 shares). All his shares were forfeited. The forfeited shares were re-issued for ₹ 7 per share fully paid-up.
Pass necessary journal entries for the above transactions.

A, B and C were partners in a firm sharing profits in the ratio of 5 : 3 : 2. The Balance Sheet as at 31-3-2018 was as follows:
A died on 30-9-2018 and B and C decided to share future profits in the ratio of 7 : 3 Under the partnership agreement the executors of a deceased partner were entitled to:

1. Amount standing to the credit of partner's capital account.
2. Interest on capital at 12% per annum.
3. Share of goodwill on the basis of four years purchase of last three years average profit.
4. Share of profit from the closing of the last financial year to the date of death on the basis of last year's profit. Profits for the year 2016, 2017 and 2018 were ₹ 8,000; ₹ 12,000 and 7,000 respectively.

Prepare A's Capital account to be rendered to his executors.