Question 21: Raman, Param and Karan were partners sharing profits and losses in the ratio of 3:2:1. Param died on 31st December, 2022. Accounts of the firm are closed on 31st March every year. Sales for the year ended 31st March, 2022 was ` 12,00,000 and sales for the nine months ended 31st December, 2022 was ` 6,00,000.
Loss for the year ended 31st March, 2022 was ` 90,000. Calculate deceased partner’s share of profit/loss from the beginning of the accounting year up to 31st December, 2022.
Answer:
|
Date |
Particulars |
|
L.F. |
(Dr.) ` |
(Cr.) ` |
|
2021 31st
Dec. |
Param’s
Capital A/c To Profit and Loss Suspense A/c (Being
loss transferred) |
Dr. |
|
15,000 |
15,000 |
Working Notes:
Sales for the year ended 31st March, 2022 was ` 12,00,000
Loss for the year ended 31st March, 2022 was ` 90,000
Percentage of Loss for the year ended 31st March, 2022 was 90,000 × 100 ÷ 12,00,000 = 7.5 %
Sales for the nine months ended 31st December, 2022 was ` 6,00,000.
Param’s share of Loss for the nine months ended 31st December, 2022 was ` 6,00,000 × 7.5 ÷ 100 = 15,000
Question 22: Akhil, Bikram and Charu were partners sharing profits and losses in the ratio of 3:2:1. Bikram died on 30th September, 2022. Loss from the beginning of the accounting year till the date of death was estimated at ` 3,60,000. Akhil and Charu decided to share future profits in the ratio of 3:2 w.e.f. 1st October, 2022.
Pass the necessary Journal entry to record Bhuwan’s share of profit/loss up to the date of death.
Answer:
|
Date |
Particulars |
|
L.F. |
(Dr.) ` |
(Cr.) ` |
|
2022 30st
Sep. |
Bikram’s Capital A/c (WN-1) To Profit and Loss Suspense A/c (Being
loss transferred) |
Dr. |
|
1,20,000 |
1,20,000 |
|
30st
Sep. |
Profit and Loss Suspense A/c (WN-2) To Akhil’s Capital A/c To Charu’s Capital A/c (Being loss transferred) |
|
|
1,20,000 |
36,000 84,000 |
|
|
Or (Alternative
Journal Entry) |
|
|
|
|
|
30st
Sep. |
Bikram’s Capital A/c (WN-1) To Akhil’s
Capital A/c (WN-2) To Charu’s
Capital A/c (WN-2) (Being
loss transferred) |
Dr. |
|
1,20,000 |
36,000 84,000 |
Working notes:
WN-1
Loss from the beginning of the accounting year till the date of death was estimated at ` 3,60,000
Bikram’s Share of Loss till the beginning of the accounting year till the date of death ` 3,60,000 × 2/6 = 1,20,000
WN-2
Old share of Akhil is 3/6 and Charu is 1/6
Akhil and Charu New share future profits in the ratio of 3:2 w.e.f. 1st October, 2021.
Akhil = 3/6 - 3/5= 15-18/30=-3/30 (Gain)
Charu = 1/6 - 2/5= 5-12/30= -7/30 (Gain)
Gaining ratio of Akhil and Charu is 3:7
Akhinl = 1,20,000
× 3/10 = 36,000
Charu = 1,20,000 × 7/10 = 84,000
Question 23:
Abha, Beena and Chanda were partners in a firm sharing profts and losses in the ratio of 5 : 3 :2. Abha died on 1st July, 2023. The Partnership Deed provided that Abha's executors are entitled to her share of profit till the date of death calculated on the basis of sales for the immediate previous year. Sales for the year ended 31st March, 2023 was Rs. 12,00,000 and the profit for the same year was 3,00,000. Sales shows a growth trend of 20% and percentage of profit earning remains the same.
Journalise the transaction along with working notes.
Answer:
|
Date |
Particulars |
|
Dr. (`) |
Cr. (`) |
|
|
|
|
|
|
|
|
Abha's Capital A/c |
|
45,000 |
|
|
|
To
Profit & Loss Suspense A/c |
|
|
45,000 |
|
|
(Being Capital Written-off with the share of loss) |
|
|
|
Working Note:
Profit 3,00,000 Grows as Sales shows a growth trend of 20% =
Profit for the current year =3,00,000×120/100=3,60,000
Abha’s share of profit for 3 Month
=3,60,000×3/12×5/10=45,000
Question 24:
X, Y and Z
were partners in a firm sharing profits in the ratio of 4 :
3 : 1. The firm closes its books on 31st March every year. On 1st February,
2023, Y died and it was decided that the new profit-sharing ratio
between X and Z will be equal. Partnership Deed provided for
the following on the death of a partner:
(a) His share of goodwill be calculated on the basis of half of the profits
credited to his account during the previous four completed years. The firm's
profits for the last four years were:
|
Year |
2018-19 |
2019-20 |
2020-21 |
2021-22 |
|
Profits
(
`) |
1,50,000 |
1,00,000 |
50,000 |
1,00,000 |
(b) His share of profit in the year of his death was to be computed on the
basis of average profit of past two years.
Pass necessary Journal entries relating to goodwill and profit to be
transferred to Y's Capital Account.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ( `) |
Credit ( `) |
|
|
2022 |
|
|
|
|
|
|
Feb
1 |
Z’s Capital A/c |
Dr. |
|
75,000 |
|
|
|
To Y’s Capital A/c |
|
|
|
75,000 |
|
|
(Adjustment of Y’s share of
Goodwill ) |
|
|
|
|
|
|
|
|
|
|
|
|
Feb
1 |
Z’s Capital A/c |
Dr. |
|
23,438 |
|
|
|
To Y’s Capital A/c |
|
|
|
23,438 |
|
|
(Adjustment of Y’s share of
Profit) |
|
|
|
|
|
|
|
|
|
|
|
Working Notes:
WN1: Calculation
of Gaining Ratio
X :Y :Z=4:3:1(Old ratio)
X :Z=1:1(New ratio)
Gaining Ratio = New Ratio - Old Ratio
X's Gain=1/2−4/8=4−4/8=0
Z's Gain=1/2−1/8=4−1/8=3/8
X:Z=0:3
WN2: Calculation of Retiring Partner’s Share of Goodwill
Y's share of goodwill=4,00,000×3/8×1/2=` 75,000
Y's share of goodwill will be brought by Z only.
WN3: Calculation of Retiring Partner’s Share of Profit
Y's share of profit=75,000×3/8×10/12=` 23,438
Average profit for last two years=` 75,000
Question 25:
Iqbal and Kapoor are in partnership
sharing profits and losses in 3 : 2. Kapoor died three
months after the date of the last Balance Sheet. According to the Partnership
Deed, the legal heir is entitled to the following:
(a) His capital as per the last Balance Sheet.
(b) Interest on above capital @ 3% p.a. till the date of death.
(c) His share of profits till the date of death calculated on the basis of last
year's profits.
His drawings are to bear interest at an average rate of 2% on the amount
irrespective of the period.
The net profits for the last three years, after charging insurance premium,
were ` 20,000; `
25,000 and ` 30,000 respectively.
Kapoor's capital as per Balance Sheet was `
40,000 and his drawings till the date of death were `
5,000.
Draw Kapoor's Capital Account to be rendered to his representatives.
Answer:
|
Kapoor’s
Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
` |
Particulars |
` |
|
Drawings A/c |
5,000 |
Balance b/d |
40,000 |
|
Interest on Drawings A/c |
100 |
Interest on Capital A/c |
300 |
|
Balance c/d |
38,200 |
Profit and Loss Adjustment A/c |
3,000 |
|
|
|
|
|
|
|
|
|
|
|
|
43,300 |
|
43,300 |
|
|
|
|
|
Working
Notes
WN1 Calculation of Interest
on Capita of Kapoor till date of his death
|
Interest |
=
capital ×Rate100×time /12 |
|
|
=40,000×3/100×3/12 =300 |
WN2 Calculation of Share of
Profit of Kapoor till date of his death
|
Profit |
=
last years’ profit ×time /12×share of profit |
|
|
=30,000×3/12×3/5 =3,000 |
WN3
Calculation
of Interest on Drawings
|
Interest |
=
Drawing ×2% |
|
|
=5,000×2% =100 |
Ts Grewal Solution 2023-2024
Click below for more Questions
Class 12 / Volume – I