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Journal Entries for Re-Issue of Shares

X and Y are p...

Question

X and Y are partners of a trading firm. They decide that no partner shall have the right to buy or sell goods beyond the value of Rs. 10,000 without the consent of the other partner. Oving to a sudden slump in the market, the prices crashed X, in order to save the firm from lose, sold all the perishable stock worth ? 2,00,000 without consulting Y. Is firm bound by Xs act?

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Solution

Solution: Section to which the given problem relates: Section 21.
Decision: Yes.
Reason: (i) The act has been done to protect the firm from loss.
(ii) The act has, been done in. the same manner as a man. of ordinary produce would have done in his own case under similar circumstances.

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Q. A and B are partners in a firm sharing profits and losses in the ratio of 2 : 1 . On 31st March, 2018 , their Balance Sheet was:


Liabilities				₹	Assets			₹
Bank Overdraft				30,000	Cash in Hand			6,000
General Reserve				56,000	Bank Balance			10,000
Investments Fluctuation Reserve				20,000	Sundry Debtors		26,000
A's Loan				34,000	Less: Provision for Doubtful Debtors		2,000	24,000
Capital A/c:					Investments			40,000
A				50,000	Stock			10,000
					Furniture			10,000
					Building			60,000
					B's Capital			30,000
				1,90,000				1,90,000

On that date , the partners decide to dissolve the firm . A took over Investments at an agreed valuation of ₹ 35,000. Other assets were realised as follows:
Sundry Debtors: Full amount . The firm could realise Stock at 15% less and Furniture at 20% less than the book value . Building was sold at ₹ 1,00,000.
Compensation to employees paid by the firm amounted to ₹ 10,000. This liability was not provided for in the above Balance Sheet.
You are required to close the books of the firm by preparing Realisation Account , Partners' Capital Accounts and Bank Account .

Q. A and B are partners in a firm sharing profits and losses in the ratio of 2 : 1. On 31st March, 2019, their Balance Sheet was:


Liabilities				Amount (₹)	Assets			Amount (₹)
Bank Overdraft				30,000	Cash in Hand			6,000
General Reserve				56,000	Bank Balance			10,000
Investments Fluctuation Reserve				20,000	Sundry Debtors		26,000
A's Loan				34,000	Less: Provision for Doubtful Debtors		2,000	24,000
Capital A/c:
A				50,000	Investments			40,000
					Stock			10,000
					Furniture			10,000
					Building			60,000
					B's Capital			30,000
				1,90,000				1,90,000

On that date, the partners decide to dissolve the firm. A took over Investments at an agreed valuation of ₹ 35,000. Other assets were realised as follows:
Sundry Debtors: Full amount. The firm could realise Stock at 15% less and Furniture at 20% less than the book value. Building was sold at ₹ 1,00,000.
Compensation to employees paid by the firm amounted to ₹ 10,000. This liability was not provided for in the above Balance Sheet.
You are required to close the books of the firm by preparing Realisation Account, Partners' Capital Accounts and Bank Account.

Q. In order to not to bind the firm for all the acts done by a partner within the implied authority which has been restricted by mutual agreement between the partners, the firm need to establish that........

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