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A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.?
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A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. ...
Journal Entries:
1. To record the retirement of partner D:
Retirement of D's Capital Account
D's Capital Account Dr. 3,00,000
To D's Retirement Account 3,00,000
2. To transfer D's share to A and B equally:
Transfer of D's Share to A and B
D's Retirement Account Dr. 3,00,000
To A's Capital Account 1,50,000
To B's Capital Account 1,50,000
3. To record the valuation of goodwill:
Goodwill Account
To General Reserve Account
4. To distribute the goodwill among the remaining partners:
Goodwill Adjustment
A's Capital Account Dr. X
B's Capital Account Dr. X
To Goodwill Account X
(Note: X will be the amount of goodwill divided equally between A and B)
5. To adjust the General Reserve:
General Reserve Adjustment
A's Capital Account Dr. 1,30,000/4
B's Capital Account Dr. 1,30,000/4
C's Capital Account Dr. 1,30,000/4
To General Reserve Account
D's Capital Account on Retirement:
Particulars Amount (₹) Particulars Amount (₹)
Balance b/d 3,00,000 Retirement of D's Capital Account 3,00,000
Transfer to A and B 1,50,000 Balance c/d 1,50,000
4,50,000 4,50,000
Explanation:
- The first entry records the retirement of partner D's capital account. His capital account is debited with the amount of 3,00,000, representing his share in the firm's capital at the time of retirement. The retirement account is credited with the same amount.
- The second entry transfers D's share to partners A and B equally. The retirement account is debited with the amount of 3,00,000, and A and B's capital accounts are credited with 1,50,000 each.
- The third entry records the valuation of goodwill. As per the given information, the goodwill is valued at 3 years' purchase of the average profits of the last 4 years, which is 40,000. The Goodwill account is debited, and the General Reserve account is credited.
- The fourth entry distributes the goodwill among the remaining partners, A and B. The capital accounts of A and B are debited with an equal share of the goodwill amount, and the Goodwill account is credited with the total amount.
- The fifth entry adjusts the General Reserve. The capital accounts of A, B, and C are debited with 1/4th of the General Reserve balance, and the General Reserve account is credited.
Finally, the D's capital account on retirement is prepared by showing the opening balance of 3,00,000, the transfer to A and B of 1,50,000, and the closing balance of 1,50,000.
1. To record the retirement of partner D:
Retirement of D's Capital Account
D's Capital Account Dr. 3,00,000
To D's Retirement Account 3,00,000
2. To transfer D's share to A and B equally:
Transfer of D's Share to A and B
D's Retirement Account Dr. 3,00,000
To A's Capital Account 1,50,000
To B's Capital Account 1,50,000
3. To record the valuation of goodwill:
Goodwill Account
To General Reserve Account
4. To distribute the goodwill among the remaining partners:
Goodwill Adjustment
A's Capital Account Dr. X
B's Capital Account Dr. X
To Goodwill Account X
(Note: X will be the amount of goodwill divided equally between A and B)
5. To adjust the General Reserve:
General Reserve Adjustment
A's Capital Account Dr. 1,30,000/4
B's Capital Account Dr. 1,30,000/4
C's Capital Account Dr. 1,30,000/4
To General Reserve Account
D's Capital Account on Retirement:
Particulars Amount (₹) Particulars Amount (₹)
Balance b/d 3,00,000 Retirement of D's Capital Account 3,00,000
Transfer to A and B 1,50,000 Balance c/d 1,50,000
4,50,000 4,50,000
Explanation:
- The first entry records the retirement of partner D's capital account. His capital account is debited with the amount of 3,00,000, representing his share in the firm's capital at the time of retirement. The retirement account is credited with the same amount.
- The second entry transfers D's share to partners A and B equally. The retirement account is debited with the amount of 3,00,000, and A and B's capital accounts are credited with 1,50,000 each.
- The third entry records the valuation of goodwill. As per the given information, the goodwill is valued at 3 years' purchase of the average profits of the last 4 years, which is 40,000. The Goodwill account is debited, and the General Reserve account is credited.
- The fourth entry distributes the goodwill among the remaining partners, A and B. The capital accounts of A and B are debited with an equal share of the goodwill amount, and the Goodwill account is credited with the total amount.
- The fifth entry adjusts the General Reserve. The capital accounts of A, B, and C are debited with 1/4th of the General Reserve balance, and the General Reserve account is credited.
Finally, the D's capital account on retirement is prepared by showing the opening balance of 3,00,000, the transfer to A and B of 1,50,000, and the closing balance of 1,50,000.
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A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.?
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A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.?.
A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.?.
Solutions for A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.? in English & in Hindi are available as part of our courses for Class 12.
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Here you can find the meaning of A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.? defined & explained in the simplest way possible. Besides giving the explanation of
A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.?, a detailed solution for A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.? has been provided alongside types of A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.? theory, EduRev gives you an
ample number of questions to practice A, B, C and D were partners sharing profits in the ratio of 1:2:3: 4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years' purchase of average profits of last 4 years, which were 40,000. General Reserve showed a balance of 1,30,000 and D's Capital in the Balance Sheet was 3,00,000 at the time of D's retirement. You are required to record necessary journal entries in the books of the firm and prepare D's capital account on his retirement.? tests, examples and also practice Class 12 tests.
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