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8. X, Y and Z are partners sharing profits and losses in the ratio of 3:2:1. Their Balance Sheet as on 31.3.2018 was as follows: Balance Sheet as on 31.3.2018 Liabilities Assets Capitals: Machinery ₹ 30,000 Investments 40,500 X Stock in trade 10,000 Joint Life Policy 20,830 Y 20,000 17,550 14,000 10,000 8,700 1,500 Mrs.Y's loan Creditors Debtors 18,500 Profit and loss A/c Life Policy Fund 14,000 6,000 Cash at bank 5,420 Investment Fluctuation fund 1,08,500 The firm was dissolved on the above date. 1,08,500 a) Joint life policy is surrendered for 12, 000. Machinery is realised for 755,000, Stock is realised for 15, 000, Debtors realised * 6,150 b) Investments are taken over by Mr. X for 717, 500 c) Mr. Y agrees to discharge his wife's loan. d) It is found that an investment not recorded in the books is worth 13,000. The same is taken over by one of the creditors.. e) Expenses of realisation amounted to 1600. Prepare: a. Realisation A/c | b. Partners' capital Accounts and c. Bank A/c (Ans: Profits on Realization Rs 26,470, Final capital balance paid

Posted by Divya Divya 1 year, 2 months ago

CBSE > Class 12 > Accountancy

2 answers

Anuj Kumar 1 year, 2 months ago

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Anuj Kumar 1 year, 2 months ago

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ANSWER

Harsh Singh 1 year, 3 months ago

To calculate the proprietary ratio, we need to find the shareholders' funds and total assets. Equity Share Capital = 0.4 * Total Assets Preference Share Capital = 0.25 * Equity Share Capital Shareholders' Funds = Equity Share Capital + Preference Share Capital + General Reserve Total Assets = Non-Current Assets + Current Assets Now, let's calculate: Equity Share Capital = 0.4 * Total Assets = 0.4 * (Non-Current Assets + Current Assets) = 0.4 * (5,00,000 + 3,00,000) = 0.4 * 8,00,000 = 3,20,000 Preference Share Capital = 0.25 * Equity Share Capital = 0.25 * 3,20,000 = 80,000 Shareholders' Funds = Equity Share Capital + Preference Share Capital + General Reserve = 3,20,000 + 80,000 + 1,50,000 = 5,50,000 Total Assets = Non-Current Assets + Current Assets = 5,00,000 + 3,00,000 = 8,00,000 Proprietary Ratio = (Shareholders' Funds / Total Assets) * 100 = (5,50,000 / 8,00,000) * 100 = 68.75% The proprietary ratio is approximately 68.75%.

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Arun Patel 1 year, 3 months ago

Answer: It is necessary to revalue assets and liabilities so that the incoming partner does not suffer from the previous values stated in the balance sheet. These values are either overstated or understated and so does not bring a true market value of fixed assets and liabilities.

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