Akbar, Birbal and Chetan shared profits and losses in the ratio of 5:3:2. They took out a Joint Life Policy in 2021 for 1,50,000, a premium of 9,000…
CA Foundation · Accounting · MTP · January 2026
Akbar, Birbal and Chetan shared profits and losses in the ratio of 5:3:2. They took out a Joint Life Policy in 2021 for 1,50,000, a premium of 9,000 being paid annually on 10th June. The surrender value of the policy on 31st December of various years was as follows: 2021 Nil 2022 2,700 2023 6,000 2024 10,800 Akbar retired on 15th April, 2025 and the policy was surrendered. You are required to prepare Joint Life Policy Account from 2021 to 2025 (assuming the Policy Account is maintained at surrendered value basis).
Suggested Answer and Working Notes:
Balance Sheet of Civil Lines Club as at 31st December, 2024 Liabilities ₹ Assets ₹ Capital Fund: Furniture 7,000 Opening balance (W.N.1) 43,100 Investment 6,000 Add: Excess of income over exp 12,110 Billiards table 30,000 Add: Donations 4,200 Cash in hand 4,500 59,410 Cash at Bank 11,050 Insurance Premium payable 80 Prepaid Expenses- Misc exp 90 Subscription received in advance for 2025 550 Subscription Receivable 1,200 Interest accrued on investments 200 60,040 60,040
Topics: Retirement of a Partner
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