Partnership accounts

ICAI study material Unit 2 Practical ques 2 What they did for Joint life policy? Why the make in the assumpition?



Gomathi Vallinayaki

Gomathi Vallinayaki

CA Inter


24-Aug-20 16:23


Answers (1)

There is a Bank Overdraft of Rs.1,50,000. The Joint life policy is said to be surrendered for Rs.47,500 (which is equal to the amount in the Balance sheet). The assumption is that once the reduction given by Bank for Rs.75,000 is including the surrender value of the Joint life policy. The surrendered amount is Rs.47,500, the bank gave a reduction of Rs.27,500 and finally made the outstanding amount to Rs.75,000. Bank overdraft (30th Sept. X1) = Bank overdraft (31st March X1) - Bank reduction [Surrender value of Joint Life policy + Additional reduction allowed] Bank overdraft (30th Sept. X1) = 1,50,000 - 75,000 [47,500 + 27,500] Bank overdraft (30th Sept. X1) = 75,000.

Madhuri Veluri

Madhuri Veluri


24-Aug-20 17:25