Partnership and LLP AccountsQ-2 | Partnership and LLP AccountsQuestion 5191 of 108
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Rama, Krishna and Raghu shared profits and losses in the ratio of 5:3:2. They took out a Joint Life Policy in 2017 for 50,000, a premium of ₹ 3,000 being paid annually on 10th June. The surrender value of the policy on 31st December of various years was as follows: 2017 - Nil 2018 - 900 2019 - 2,000 2020 - 3,600 Rama retired on 15th April, 2021 and the policy was surrendered. You are required to prepare Joint Life Policy Account from 2017 to 2021 (assuming the Policy Account is maintained at surrendered value basis). [July 2021, 5 Marks]; [MTP Jan. 2025]

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Detailed Solution & Explanation

Joint Life Policy A/ c Date Particulars Amt. Date Particulars Amt. 10 June, 2017 To Bank A/c 3,000 31 Dec., 2017 By Profit & Loss A/ c 3,000 Total 3,000 Total 3,000 10 June, 2018 To Bank A/c 3,000 31 Dec., 2018 By Profit & Loss A/ c. By Balance c/d 2,100 900 Total 3,000 Total 3,000 1st Jan,2019 10 June, 2019 To Balance b/d To Bank A/c 900 3,000 31 Dec., 2019 By Profit & Loss A/ c By Balance c/ d 1,900 2,000 Total 3,900 Total 3,900 1st Jan, 2020 10 June, 2020 To Balance b/ d To Bank A/c 2,000 3,000 31 Dec., 2020 By Profit & Loss A/ c By Balance c/ d 1,400 3,600 Total 5,000 Total 5,000 1st Jan, 2021 To Balance b/ d 3,600 15 April, 2021 By BankA/c 3,600 Total 3,600 Total 3,600

About This Chapter: Partnership & Companies

Paper

Paper 1: Accounting

Weightage

15-20%

Key Topics

Admission, Retirement, Death, Shares, Debentures

This chapter covers Admission, Retirement, Death, Shares, Debentures and is part of Paper 1: Accounting in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 15-20% weightage. Focus on understanding core concepts rather than memorizing.

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More Questions from Partnership and LLP Accounts

Following are the details of Assets and Liabilities of Mr. Sarthak for the year ended 31 March, 2023 and 31 March, 2024: 31.03.2023 31.03.2024 Assets Buildings Furniture Inventory Sundry debtors Cash at bank Cash in hand Liabilities: Loans Sundry Creditors 2,00,000 75,000 1,05,000 68,000 72,500 2,400 1,50,000 58,400 ? ? 1,95,000 94,000 86,800 3,800 1,25,000 79,500 It was decided to depreciate Building by 5% p.a. and Furniture by 10% p.a. On 1st June, 2023 an additional capital of 40,000 was brought in the business. Proprietor has withdrawn @ ₹ 2,500 p.m. for meeting the family expenses. Prepare Statement of Affairs as on 31 March, 2023 and 31 March, 2024. Find the profit or loss earned by Mr. Sarthak for the year ended 31st March, 2024. [Jan. 2025, 5 Marks]

What is Piecemeal payments method under Partnership Dissolution? Briefly explain the two methods followed for determining the order in which the payments are made? [CA Inter May 2010, 2 Marks]

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