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Question
Select the most appropriate alternative from given below and rewrite the statement :
Assets and Liabilities are transferred to Realisation Account at their __________ values.
Options
market
purchase
sale
book
Solution
Assets and Liabilities are transferred to Realisation Account at their book values.
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RELATED QUESTIONS
Pass the necessary Journal entries for the following transaction on the dissolution of the firm of P and Q after the various assets (Other than cash) and outside liabilities have been transferred to Realisation Account.
(i) Bank Loan Rs 12,000 was paid.
(ii) Stock worth Rs 16,000 was taken over by Partner Q.
(iii) Partner P paid a creditor Rs 4,000
(iv) An assets not appearing in the books of accounts realized Rs 1,200.
(v) Expenses of realisation Rs 2,000 were paid by partner Q.
(vi) Profit on realization Rs 36,000 was distributed between P and Q in 5 : 4 ratio.
On 31-3-2010 the Balance Sheet of W and R who shared profits in 3 : 2 ratio was as follows:
|
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
|
Creditors |
20,000 |
Cash |
5,000 |
||
|
Profit and Loss Account |
15,000 |
Sundry Debtors |
20,000 |
|
|
|
Capital Accounts: |
|
Less: Provision |
(700) |
19,300 |
|
|
W |
40,000 |
|
Stock |
25,000 |
|
|
R |
30,000 |
70,000 |
Plant and Machinery |
35,000 |
|
|
|
|
Plants |
20,700 |
||
|
|
1,05,000 |
|
1,05,000 |
||
|
|
|
|
|
||
On this date B was admitted as a partner on the following conditions:
(a) ‘B’ will get 4/15th share profits.
(b) ‘B’ had to bring Rs 30,000 as his capital to which amount other Partners capital shall have to be adjusted.
(c) He would pay cash for his share of goodwill which would be based on 2½ years purchase of average profits of past 4 years.
(d) The assets would be revalued as under:
Sundry debtors at the book value less 5% provision for bad debts. Stock at Rs 20,000, Plant and Machinery at Rs 40,000.
(e) The profits of the firm for the years 2007, 2008 and 2009 were Rs 20,000; Rs 14,000 and Rs 17,000 respectively.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new firm.
Following is the balance sheet at Sharmila, Urmila and Pramila, who shared profits and losses in the ratio of 5 : 3 : 2 respectively:
Balance Sheet as on 31st March, 2013
| Liabilities | Amount | Assets | Amount |
| Capital accounts: | Land and buildings | 250000 | |
| Sharmila | 2,00,000 | Plant and Machinery | 70000 |
| Urmila | 1,50,000 | Furniture | 20000 |
| Pramila | 1,00,000 | Sundry debtors | 90000 |
| Reserve fund | 50,000 | Stock | 56500 |
| Sundry creditors | 42,800 | Bills receivable | 7400 |
| Bills payable | 6,000 | Cash in hand | 3700 |
| Cash at bank | 51200 | ||
| 5,48,800 | 5,48,800 |
Pramila retired on 31st March, 2013 on the following terms:
(1) Goodwill of the firm was valued at Rs 60,000. It was decided that ‘goodwill’ should be raised to the extent of Pramila’s share only, and to be written off immediately.
(2) Land and building to be appreciated by Rs 20,000. Stock is revalued at Rs 58,500. Furniture is to be depreciated by 10%.
(3) Amount payable to Pramila is to be transferred to her loan account.
Give Journal Entries in the books of the firm.
Write the term / word / phrase which can substitute the following statement :
Debit balance of revaluation account.
State whether the following statements is true or false :
Revaluation account is also called Realisation account.
State whether the following statements is true or false :
Profit on revaluation account is transferred to continuing partners’ capital account only.
Give a word / term / phrase which can substitute the following statements :
The account which shows revaluation of assets and liabilities.
Digvijay, Brijesh and Parakaram were partners in a firm sharing profits in the ratio of 2:2:1. Their Balance Sheet as on March 31, 2020 was as follows:
| Liabilities | Amt (Rs.) |
Assets | Amt (Rs.) |
| Creditors | 49,000 | Cash | 8,000 |
| Reserves | 18,500 | Debtors | 19,000 |
| Digvijay’s Capital | 82,000 |
Stock |
42,000 |
| Brijesh’s Capital | 60,000 | Buildings | 207,000 |
| Parakaram’s Capital | 75,500 | Patents | 9,000 |
| 2,85,000 | 2,85,000 |
Brijesh retired on March 31, 2020 on the following terms:
- Goodwill of the firm was valued at Rs 70,000 and was not to appear in the books.
- Bad debts amounting to Rs 2,000 were to be written off.
- Patents were considered as valueless.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of Digvijay and Parakaram after Brijesh’s retirement.
Himanshu, Gagan and Naman are partners sharing profits and losses in the ratio of 3:2:1. On March 31, 2019, Naman retires.
The various assets and liabilities of the firm on the date were as follows:
Cash Rs 10,000, Building Rs 1,00,000, Plant and Machinery Rs 40,000, Stock Rs 20,000, Debtors Rs 20,000 and Investments Rs 30,000.
The following was agreed upon between the partners on Naman’s retirement:
|
(i) |
Building to be appreciated by 20%. |
|
(ii) |
Plant and Machinery to be depreciated by 10%. |
|
(iii) |
A provision of 5% on debtors to be created for bad and doubtful debts. |
|
(iv) |
Stock was to be valued at Rs 18,000 and Investment at Rs 35,000. |
Record the necessary journal entries to the above effect and prepare the Revaluation Account.
Select the most appropriate alternative from those given below and rewrite the statement.
The profit or loss from revaluation of assets and liabilities on retirement of a partner is shared by______________
Mr. Govind keeps his books by single entry method and disclosed the following information of his business .
| Particulars | 1.4.12 | 31.3.13 |
| Investments | - | 30000 |
| Bills Payable | - | 18000 |
| Creditors | 52500 | 69000 |
| Furniture | 15000 | 15000 |
| Debtor | 60,000 | 90,000 |
| Stock in Trade | 30,000 | 37500 |
| Cash at Bank | 36,000 | 54,000 |
Additional Information :
(1) Mr. Govind transferred Rs. 300 per month during first half year and Rs. 200 each month for the remaining period from his business to his personal account. He also took goods of Rs. 700 for private use.
(2) Mr. Govind sold his personal assets for Rs. 7000 and brought the proceeds into his business.
(3) Furniture is to be depreciated by 10%.
(4) Provide R.D.D. at 5% for debtors.
Prepare : Opening and Closing Statement of affairs and Statement of Profit or Loss for the year ended 31st March 2013.
Fill in the blanks:
In case of retirement of a partner, profit or loss on revaluation of assets and re-assessment of liabilities is distributed among _________ partners in ___________ ratio.
Complete the sentence?
______ is an asset is an asset that is not physical in nature. Brand recognition, Goodwill and intellectual property such as patent etc. are examples of it.
X, Y and Z were partners. On 30th June 2019 Y retired. The extract of their balance sheet is given below:
| Balance Sheet [An Extract] | |||
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
| Investment Fluctuation Fund | 10,000 | Investments [Market value ₹ 80,000] |
1,00,000 |
What Journal Entry will be passed for the above item on Y's retirement?
At the time of retirement of a partner, profit on revaluation will be credited to the capital accounts of ______.
When the Balance Sheet is prepared after the retirement of a partner (subsequent to the preparation of the Revaluation Account), ______ values are shown in it.
An account operated to ascertain the loss or gain at the time of death of a partner is called ______.
P, Q and R were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 3. On 31.3.2020 R retired from the firm. On R's retirement the balance sheet of the firm showed sundry debtors at t 3,75,000. It was decided to write off ₹ 5,000 as bad debts and create a provision of 20% on debtors for bad and doubtful debts. Pass necessary journal entries for the above transactions in the books of the firm on R's retirement.
D, E and F were partners in a firm sharing profits in the ratio of 5 : 2 : 3. On 31.3.2022 their balance sheet was as follows:
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) |
| Creditors | 53,000 | Cash | 16,000 | |
| Bills Payable | 62,000 | Bank | 17,000 | |
| General Reserve | 2,00,000 | Stock | 18,000 | |
| Capitals: | Debtors | 1,99,000 | ||
| D | 7,00,000 | 18,00,000 | Investments | 1,15,000 |
| E | 5,00,000 | Machinery | 7,50,000 | |
| F | 6,00,000 | Land and Building |
10,00,000 | |
| 21,15,000 | 21,15,000 |
On the above date D retired from the firm and the following was agreed upon:
- Goodwill of the firm was valued at ₹ 1,00,000, D's share of goodwill was adjusted through the capital accounts of remaining partners.
- Investments were to be brought to their market value which was ₹ 85,000.
- Machinery was to be depreciated to ₹ 7,00,000.
- Land and Building was to be appreciated to ₹ 12,00,000.
- The balance in D's capital account was transferred to his loan account.
Prepare Revaluation Account and D's Capital Account on his retirement.
X, Y and Z were partners in a firm sharing profit and losses in the ratio of 5 : 3 : 2. On 31.3.2022 X retired from the firm. On X's retirement the firm had a balance of ₹ 90,000 in the General Reserve Account. The revaluation of assets and reassessment of liabilities resulted in a loss of ₹ 70,000. Pass necessary journal entries for the above transactions on X's retirement.
Pass the necessary journal entries for the following transactions, on the dissolution of a partnership firm of Kavita and Suman on 31st March, 2022, after the various assets (other than cash) and third party liabilities have been transferred to Realisation Account.
- Kavita took over stock amounting to ₹ 1,00,000 at ₹ 90,000.
- Creditors of ₹ 2,00,000 took over Plant and Machinery of ₹ 3,00,000 in full settlement of their claim.
- There was an unrecorded asset of ₹ 23,000 which was taken over by Suman at ₹ 17,000.
- Realisation expenses ₹ 2,000 were paid by Kavita.
- Bank loan ₹ 21,000 was paid off.
- Loss on dissolution amounted to ₹ 7,000.
Himanshu, Gagan, and Naman are partners who share profits and losses in the ratio of 3: 2: 1. On March 31, 2017, Naman retired. The firm's various assets and liabilities on that date were as follows:
Cash Rs. 10,000, Building Rs. 1,00,000, Plant and Machinery Rs. 40,000, Stock Rs. 20,000, Debtors Rs. 20,000, and Investments Rs. 30,000.
The following was agreed upon between the partners on Naman’s retirement:
- Building to be appreciated by 20%.
- Plant and Machinery to be depreciated by 10%.
- A provision of 5% on debtors to be created for bad and doubtful debts.
- Stock was to be valued at Rs. 18,000 and Investment at Rs. 35,000.
Record the necessary journal entries to the above effect and prepare the revaluation account.
Himanshu, Gagan and Naman are partners sharing profits and losses in the ratio of 3 : 2 : 1. On March 31, 2017, Naman retires. The various assets and liabilities of the firm on the date were as follows: Cash Rs. 10,000, Building Rs. 1,00,000, Plant and Machinery Rs. 40,000, Stock Rs. 20,000, Debtors Rs. 20,000 and Investments Rs. 30,000.
The following was agreed upon between the partners on Naman’s retirement:
- Building to be appreciated by 20%.
- Plant and Machinery to be depreciated by 10%.
- A provision of 5% on debtors to be created for bad and doubtful debts.
- Stock was to be valued at Rs. 18,000 and Investment at Rs. 35,000.
Record the necessary journal entries to the above effect and prepare the revaluation account.
