Question
31: The Balance Sheet of A, B and C who were
sharing profits in the ratio of 3:3 :4 as at 31st
March, 2019 was as follows:
BALANCE SHEET OF A, B AND C as at 31th March, 2019
|
||||
Assets
|
|
`
|
Liabilities
|
`
|
General Reserve
|
|
40,000
|
Cash
|
4,000
|
Bills Payable
|
|
15,000
|
Stock
|
43,000
|
Loan from Bank
|
|
30,000
|
Investment
|
70,000
|
Capital A/cs:
|
|
|
Land and Buildings
|
1,58,000
|
A
|
60,000
|
|
|
|
B
|
90,000
|
|
|
|
C
|
40,000
|
1,90,000
|
|
|
|
|
|
2,75,000
|
|
2,75,000
|
A died on 1st October, 2019. The
partnership deed provided for the following on the death of a partner:
(a) Goodwill of the firm be valued at two
years’ purchase of average profits for the last three years.
(b) The profit for the year ending 31st
March, 2019 was ` 50,000.
(c) Interest on capital was to be provided
@ 6% p.a.
(d) The average profits of the last three
years were ` 35,000.
Prepare A’s Capital Account to be rendered
to his executors. (CBSE 2020 C)
Answer:
A’s Capital Account
|
|||
Particulars
|
Dr. `
|
Particulars
|
Cr. `
|
To Sadhu’s Executors A/c
|
1,02,300
|
By Balance b/d
|
60,000
|
|
|
|
By General Reserve A/c (WN-1)
|
12,000
|
|
|
|
By B’s Capital A/c (WN-2)
|
9,000
|
|
|
|
By C’s Capital A/c (WN-2)
|
12,000
|
|
|
|
By Interest on Capital
A/c (WN-3)
|
1,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,02,300
|
|
1,02,300
|
Working
notes:
WN-1
A’s share of General Reserve
A’s
Share of Profit = 40,000×3/10 = `
12,000
WN-2
Calculation of goodwill
The average profits of the last three years
were ` 35,000
Goodwill of the Firm = ` 35,000×2=70,000
Share of A is in Goodwill = 70,000 × 3/10
= 21,000
Goodwill Share of A is in Goodwill will be
compensated by B and C in 3:4
A = 21,000 × 3/7 = 9,000
B = 21,000 × 4/7 = 12,000
WN-3
Calculation of Interest on Capital
A’s Interest on Capital till the date of
death = 60,000×6×6/100×12=1,800
Question 32:
R, S and T were partners sharing profits and losses
in the ratio of 5 : 3 : 2 respectively. On 31st March,
2018, their Balance Sheet stood as:
|
Liabilities |
` |
Assets |
` |
|
|
Sundry Creditors |
40,000 |
Goodwill |
25,000 |
|
|
Bills Payable |
15,000 |
Leasehold |
1,00,000 |
|
|
Workmen Compensation
Reserve |
30,000 |
Patents |
30,000 |
|
|
Capital A/cs: |
|
Machinery |
1,50,000 |
|
|
R |
1,50,000 |
|
Stock |
50,000 |
|
S |
1,25,000 |
|
Debtors |
40,000 |
|
T |
75,000 |
3,50,000 |
Cash
at Bank |
40,000 |
|
|
4,35,000 |
|
4,35,000 |
|
|
|
|
|
|
|
T died on 1st August, 2018. It was agreed that:
(a) Goodwill be valued at 2 ½ years'
purchase of average of last 4 years' profits which were:
2014-15: `
65,000; 2015-16: ` 60,000;
2016-17: ` 80,000 and 2017-18:
`
75,000.
(b) Machinery be valued at ` 1,40,000; Patents be valued at ` 40,000; Leasehold be valued at
`
1,25,000 on 1st August, 2018.
(c) For the purpose of calculating T's share in the profits of 2018-19, the
profits in 2018-19 should be taken to have accrued on the same scale as in
2017-18.
(d) A sum of ` 21,000 to be paid
immediately to the Executors of T and the balance to be paid in four
equal half-yearly instalments together with interest @ 10% p.a.
Pass necessary Journal entries to record the above transactions and T's
Executors' Account.
Answer:
|
Journal |
||||
|
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
Revaluation
A/c |
Dr. |
|
10,000 |
|
|
To
Machinery A/c |
|
|
10,000 |
|
|
(Decrease
in value of Machinery transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
|
|
Patents
A/c |
Dr. |
|
10,000 |
|
|
Leasehold
A/c |
Dr. |
|
25,000 |
|
|
To
Revaluation A/c |
|
|
35,000 |
|
|
(Increase
in value Patents and Leasehold transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
|
|
Revaluation
A/c |
Dr. |
|
25,000 |
|
|
To
R’s Capital A/c |
|
|
12,500 |
|
|
To
S’s Capital A/c |
|
|
7,500 |
|
|
To
T’s Capital A/c |
|
|
5,000 |
|
|
(Revaluation
profit distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
|
|
R’
Capital A/c |
Dr. |
|
12,500 |
|
|
S’s
Capital A/c |
Dr. |
|
7,500 |
|
|
T’s
Capital A/c |
Dr. |
|
5,000 |
|
|
To
Goodwill A/c |
|
|
25,000 |
|
|
(Goodwill
written off among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
|
|
R’s
Capital A/c |
Dr. |
|
21,875 |
|
|
S’s
Capital A/c |
Dr. |
|
13,125 |
|
|
To
T’s Capital A/c |
|
|
35,000 |
|
|
(T’s
share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
|
|
Profit
and Loss Suspense A/c |
Dr. |
|
5,000 |
|
|
To T’s Capital A/c |
|
|
5,000 |
|
|
(T’s
share of profit transferred to his capital account) |
|
|
|
|
|
|
|
|
|
|
|
Workmen’s
Compensation Reserve A/c |
Dr. |
|
30,000 |
|
|
To
R’s Capital A/c |
|
|
15,000 |
|
|
To
S’s Capital A/c |
|
|
9,000 |
|
|
To
T’s Capital A/c |
|
|
6,000 |
|
|
(Workmen’s
Compensation Reserve distributed among partners in their old ratio ) |
|
|
|
|
|
|
|
|
|
|
|
T’s
Capital A/c |
Dr. |
|
1,21,000 |
|
|
To
T’s Executors A/c |
|
|
1,21,000 |
|
|
(Amount
due to T after all adjustments transferred to his Executor’s Account) |
|
|
|
|
|
|
|
|
|
|
|
T’s
Executor’s A/c |
Dr. |
|
21,000 |
|
|
To
Bank A/c |
|
|
21,000 |
|
|
(Amount
paid to T’s Executor) |
|
|
|
|
|
|
|
|
|
|
|
T’s Executor’s
Account |
|||||
|
Dr. |
|
Cr. |
|||
|
Date |
Particulars |
` |
Date |
Particulars |
` |
|
2018 |
|
|
2018 |
|
|
|
Aug.
01 |
Cash
A/c |
21,000 |
Aug. 01 |
T’s
Capital A/c |
1,21,000 |
|
2019 |
|
|
2019 |
|
|
|
Jan.
31 |
Cash
A/c (25,000 + 5,000) |
30,000 |
Jan. 31 |
Interest
(1,00,000 ×10% for 6 months) |
5,000 |
|
Mar.
31 |
Balance
c/d |
76,250 |
Mar. 31 |
Interest
(75,000 ×10% for 2 months) |
1,250 |
|
|
|
1,27,250 |
|
|
1,27,250 |
|
2019 |
|
|
2019 |
|
|
|
Aug.
01 |
Cash
A/c (25,000 + 1,250 + 2,500) |
28,750 |
Apr. 01 |
Balance
b/d |
76,250 |
|
2020 |
|
|
Aug. 01 |
Interest
(75,000 × 10% for 4 months) |
2,500 |
|
Jan. 31 |
Cash
A/c (25,000 + 2,500) |
27,500 |
2020 |
|
|
|
Mar.
31 |
Balance
c/d |
25,417 |
Jan. 31 |
Interest
(50,000 × 10% for 6 months) |
2,500 |
|
|
|
|
Mar. 31 |
Interest
(25,000 × 10% for 2 months) |
417 |
|
|
|
81,667 |
|
|
81,667 |
|
2020 |
|
|
2020 |
|
|
|
Aug.
01 |
Cash
A/c (25,000 + 417 + 833) |
26,250 |
Apr. 01 |
Balance
b/d |
25,417 |
|
|
|
|
Aug. 01 |
Interest
(25,000 × 10% for 4 months) |
833 |
|
|
|
26,250 |
|
|
26,250 |
|
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
Average profit = total profit
of past given years/number of years
Average profit =65,000+60,000+80,000+75,000/4=2,80,000/4=70,000
∴ Goodwill =
Average Profit × Number of Years’ Purchase
= 70,000 × 2.5 = ` 1,75,000
WN 2 Adjustment of Goodwill
Old Ratio (R, S and T) = 5 : 3 : 2
T died.
∴ New Ratio (R and S)
= 5 : 3 and
Gaining Ratio = 5 : 3
T’s Share in Goodwill = 1,75,000×2/10=35,000
This share of goodwill is to be distributed between R and S in their gaining
ratio (i.e. 5 : 3).
R’s Share of Goodwill =35,000×5/8=21875
S’s Share of
Goodwill =35,000×3/8=13,125
WN 3 Calculation of T’s Share of Profit
Profit for 2017-18 = ` 75,000
T's Share of Profit for 2017-18 =75,000×2/10×4/12=`5,000
WN 4
|
Revaluation
Account |
||||
|
Dr. |
|
Cr. |
||
|
Particulars |
` |
Particulars |
` |
|
|
Machinery |
10,000 |
Patents |
10,000 |
|
|
Profit
transferred to: |
|
Leasehold |
25,000 |
|
|
R’s
Capital A/c |
12,500 |
|
|
|
|
S’s
Capital A/c |
7,500 |
|
|
|
|
T’s
Capital A/c |
5,000 |
25,000 |
|
|
|
|
35,000 |
|
35,000 |
|
|
|
|
|
|
|
WN 5
|
T’s Capital
Account |
|||
|
Dr. |
|
Cr. |
|
|
Particulars |
` |
Particulars |
` |
|
Goodwill |
5,000 |
Balance
b/d |
75,000 |
|
T’s
Executor’s A/c |
1,21,000 |
Workmen’s
Compensation Reserve |
6,000 |
|
|
|
Profit
and Loss Suspense A/c |
5,000 |
|
|
|
R’s
Capital A/c |
21,875 |
|
|
|
S’s
Capital A/c |
13,125 |
|
|
|
Revaluation
A/c (Profit) |
5,000 |
|
|
1,26,000 |
|
1,26,000 |
|
|
|
|
|
Question
33: Aman, Naman and Raman were partners in a firm sharing profits and
losses in the ratio of 2:2:1. On 31st March, 2022, their Balance Sheet was as
follows:
Balance sheet
|
||||
Assets
|
|
`
|
Liabilities
|
`
|
Capital A/cs:
|
|
|
Fixed assets
|
14,00,000
|
Aman
|
8,00,000
|
|
Stock
|
4,00,000
|
Naman
|
7,00,000
|
|
Debtors
|
3,00,000
|
Raman
|
5,00,000
|
20,00,000
|
Cash at bank
|
7,00,000
|
Worker’s comensation
reserve
|
|
50,000
|
Cash in hand
|
1,00,000
|
Genseral Reserve
|
|
2,00,000
|
Advertisement suspense
A/c
|
50,000
|
Employee’s Provident
fund
|
|
2,00,000
|
(Deferred Revenue)
|
|
Creditors
|
|
5,00,000
|
|
|
|
|
|
29,50,000
|
|
29,50,000
|
Naman died on 30th June, 2022. According to the Partnership Deed, his
legal heirs were entitled to:
(a) Balance in his
Capital Account.
(b) His share of goodwill will be
calculated on the basis of thrice the average of the past 4 years’ profits.
(c) His share in profits up to the date of
death on the basis of average profits of the last two years.
(d) Interest on capital @ 12% p.a. up to
the date of his death.
The firm’s profits for the last four years
ended 31st March, were:
2019: ` 2,40,000; 2020: ` 4,00,000; 2021: `
5,20,000 and 2022: ` 4,40,000.
Naman’s Executor was paid the sum due immediately. Prepare Naman’s Capital Accounts to be presented to his legal
heirs.
Answer:
Naman’s Capital
Account
|
|||
Particulars
|
Dr. `
|
Particulars
|
Cr. `
|
To Advertisement
suspense A/c (WN-6)
|
20,000
|
By Balance b/d
|
7,00,000
|
To Naman’s
Executors A/c
|
13,29,000
|
By Worker’s compensation
reserve A/c (WN-1)
|
20,000
|
|
|
|
By General Reserve A/c (WN-2)
|
80,000
|
|
|
|
By P&L Suspense A/c
(WN-3)
|
48,000
|
|
|
|
By Interest on Capital
A/c (WN-4)
|
21,000
|
|
|
|
By Aman’s
Capital A/c (WN-5)
|
3,20,000
|
|
|
|
By Raman’s Capital A/c (WN-5)
|
1,60,000
|
|
|
|
|
|
|
|
|
|
|
|
|
13,49,000
|
|
13,49,000
|
Working
notes:
WN-1
Naman’s share of Workers’ Compensation Reserve
Naman’s Share of Profit = 50,000×2/5 = ` 20,000
WN-2
Naman’s share of General Reserve
Naman’s Share of Profit = 2,00,000×2/5 = ` 80,000
WN-3
Naman’s share of Profit till the date of death
Average Profit =5,20,000+4,40,000/2=4,80,000
Naman’s Share of Profit = 4,80,000×2×3/5×12 = ` 48,000
WN-4
Calculation of Interest on Capital
Naman’s Interest on Capital till the
date of death = 7,00,000×12×3/100×12=21,000
WN-5
Calculation of goodwill
The average profits =
2,40,000+4,00,000+5,20,000 +4,40,000/4=4,00,000
Goodwill of the Firm = ` 4,00,000×3=12,00,000
Share of Naman is
in Goodwill = 12,00,000 × 2/5 = 4,80,000
Goodwill Share of Naman
is in Goodwill will be compensated by Aman and Raman
in 2:1
Aman = 4,80,000 × 2/3 = 3,20,000
Raman = 4,80,000 × 1/3 =
,160,000
WN-6
Naman’s share of Advertisement Suspense A/c
Naman’s Share of Profit = 50,000×2/5 = ` 20,000
Question 34:
The Balance Sheet
of X, Y and Z as at 31st March, 2021 was:
|
Liabilities |
( `) |
Assets |
( `) |
|
|
Bills Payable |
2,000 |
Cash at Bank |
5,800 |
|
|
Employees'
Provident Fund |
5,000 |
Bills Receivable |
800 |
|
|
Workmen
Compensation Reserve |
6,000 |
Stock |
9,000 |
|
|
General
Reserve |
6,000 |
Sundry
Debtors |
16,000 |
|
|
Loans |
7,100 |
Furniture |
2,000 |
|
|
Capital A/cs: |
|
Plant
and Machinery |
6,500 |
|
|
X |
22,750 |
|
Building |
30,000 |
|
Y |
15,250 |
|
Advertising
Suspense |
6,000 |
|
Z |
12,000 |
50,000 |
|
|
|
|
76,100 |
|
76,100 |
|
|
|
|
|
|
|
The profit-sharing ratio was 3 : 2 : 1. Z
died on 31st July, 2021. The Partnership Deed provides that:
(a) Goodwill is to be calculated on the basis of three years' purchase of the
five years' average profit. The profits were: 2021:
`
24,000; 2020: ` 16,000; 2019:
`
20,000 and 2018: ` 10,000 and 2017: ` 5,000.
(b) The deceased partner to be given share of profits till the date of death on
the basis of profits for the previous year.
(c) The Assets have been revalued as: Stock `
10,000; Debtors ` 15,000; Furniture
`
1,500; Plant and Machinery ` 5,000;
Building ` 35,000. A Bill Receivable
for `
600 was found worthless.
(d) A Sum of ` 12,233 was paid immediately
to Z's Executors and the balance to be paid in two equal annual
instalments together with interest @ 10% p.a. on the amount outstanding.
Give Journal entries and show the Z's Executors' Account till it is
finally settled.
Answer:
|
Journal |
||||
|
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
Workmen’s
Compensation Reserve |
Dr. |
|
6,000 |
|
|
To
X’s Capital A/c |
|
|
3,000 |
|
|
To
Y’s Capital A/c |
|
|
2,000 |
|
|
To
Z’s Capital A/c |
|
|
1,000 |
|
|
(Workmen’s
Compesation Reserve distributed among partners in
their old ratio) |
|
|
|
|
|
|
|
|
|
|
|
General
Reserve A/c |
Dr. |
|
6,000 |
|
|
To
X’s Capital A/c |
|
|
3,000 |
|
|
To
Y’s Capital A/c |
|
|
2,000 |
|
|
To
Z’s Capital A/c |
|
|
1,000 |
|
|
(General
Reserve distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
|
|
X’s
Capital A/c |
Dr. |
|
3,000 |
|
|
Y’s
Capital A/c |
Dr. |
|
2,000 |
|
|
Z’s
Capital A/c |
Dr. |
|
1,000 |
|
|
To
Advertisement Suspense A/c |
|
|
6,000 |
|
|
(Advertisement
suspense written off among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
|
|
X’s
Capital A/c |
Dr. |
|
4,500 |
|
|
Y’s
Capital A/c |
Dr. |
|
3,000 |
|
|
To
Z’s Capital A/c |
|
|
7,500 |
|
|
(Z’s
share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
|
|
Revaluation
A/c |
Dr. |
|
3,600 |
|
|
To Sundry debtors A/c |
Dr. |
|
|
1,000 |
|
To
Furniture A/c |
|
|
500 |
|
|
To
Plant and Machinery A/c |
|
|
1,500 |
|
|
To
Bills Receivable A/c |
|
|
600 |
|
|
(Decrease
in value of Assets transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
|
|
Stock
A/c |
Dr. |
|
1,000 |
|
|
Building
A/c |
Dr. |
|
5,000 |
|
|
To
Revaluation A/c |
|
|
6,000 |
|
|
(Increase
in value of Assets transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
|
|
Revaluation
A/c |
Dr. |
|
2,400 |
|
|
To
X’ Capital A/c |
|
|
1,200 |
|
|
To
Y’s Capital A/c |
|
|
800 |
|
|
To
Z’s Capital A/c |
|
|
400 |
|
|
(Revaluation
profit distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
|
|
Profit
and Loss Suspense A/c |
Dr. |
|
1,333 |
|
|
To
Z’s Capital A/c |
|
|
1,333 |
|
|
(Z’s
share of profit transferred his capital account) |
|
|
|
|
|
|
|
|
|
|
|
Z’s
Capital A/c |
Dr. |
|
22,233 |
|
|
To Z’s Executor’s A/c |
|
|
22,233 |
|
|
(Amount
due to Z transferred to his Executor’s Account) |
|
|
|
|
|
|
|
|
|
|
|
Z’s
Executor’s A/c |
Dr. |
|
12,333 |
|
|
To
Bank A/c |
|
|
12,333 |
|
|
(Amount
paid to Z’s Executor) |
|
|
|
|
|
|
|
|
|
|
|
Z’s Executor’s
Account |
|||||
|
Dr. |
|
Cr. |
|||
|
Date |
Particulars |
` |
Date |
Particulars |
` |
|
2021 |
|
|
2021 |
|
|
|
July 31 |
Bank
A/c |
12,233 |
July 31 |
Z’s
Capital A/c |
22,233 |
|
2022 |
|
|
2022 |
|
|
|
Mar. 31 |
Balance
c/d |
10,667 |
Mar. 31 |
Interest
(10,000 × 10% for 8 months) |
667 |
|
|
|
22,900 |
|
|
22,900 |
|
2022 |
|
|
2022 |
|
|
|
July 31 |
Bank
A/c (5,000 + 667 + 333) |
6,000 |
Apr. 01 |
Balance
b/d |
10,667 |
|
|
|
|
July 31 |
Interest
(10,000 × 10% for 4 months ) |
333 |
|
2023 |
|
|
2023 |
|
|
|
Mar.31 |
Balance
c/d |
5,333 |
Mar. 31 |
Interest
(5,000 × 10% for 8 months) |
333 |
|
|
|
11,333 |
|
|
11,333 |
|
2023 |
|
|
2023 |
|
|
|
July 31 |
Bank
A/c (5,000 + 333 + 167) |
5,500 |
Apr. 01 |
Balance
b/d |
5,333 |
|
|
|
|
July 31 |
Interest
(5,000 × 10% for 4months) |
167 |
|
|
|
5,500 |
|
|
5,500 |
|
|
|
|
|
|
|
Working Notes:
WN1 Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
Average profit = total profit
of past given years/number of years
Average profit =24,000+16,000+20,000+10,000+5000/5=15,000
∴ Goodwill = Average Profit × Number of Years’ Purchase
= 15,000 × 3 = ` 45,000
WN2 Adjustment of Goodwill
Old Ratio = 3 : 2 : 1
Z died.
∴ New Ratio (X and
Y) = 3 : 1 and
Gaining Ratio = 3 : 2
Z’s Share in Goodwill = 45,000×1/6=7,500
This share of goodwill is to be distributed between X and Y in their gaining
ratio (i.e. 3 : 1).
X’s Share of Goodwill = 7,500×3/5=4,500
Y’s Share of
Goodwill = 7,500×2,5=3,000
WN3 Calculation Z’s Share of Profit
Profit for 2021 (Immediate Previous Year) = ` 24,000
∴ Z’s Profit Share = 24,000×1/6×4/12=1,333
WN4
|
Revaluation
Account |
||||
|
Dr. |
|
Cr. |
||
|
Particulars |
` |
Particulars |
` |
|
|
Sundry
Debtors |
1,000 |
Stock |
1,000 |
|
|
Furniture |
500 |
Building |
5,000 |
|
|
Plant
and Machinery |
1,500 |
|
|
|
|
Bills
Receivable |
600 |
|
|
|
|
Profit
transferred to: |
|
|
|
|
|
X’s
Capital A/c |
1,200 |
|
|
|
|
Y’s
Capital A/c |
800 |
|
|
|
|
Z’s
Capital A/c |
400 |
2,400 |
|
|
|
|
6,000 |
|
6,000 |
|
|
|
|
|
|
|
Question 35:
X, Y and Z
were partners in a firm sharing profits and losses in the 5 :
4 : 3. Their Balance Sheet on 31st March, 2021 was as follows:
|
Liabilities |
( `) |
Assets |
( `) |
|
|
Creditors |
2,00,000 |
Building |
2,00,000 |
|
|
Employees'
Provident Fund |
1,50,000 |
Machinery |
3,00,000 |
|
|
General Reserve |
36,000 |
Furniture |
1,10,000 |
|
|
Investment
Fluctuation Reserve |
14,000 |
Investment
(Market
value ` 86,000) |
1,00,000 |
|
|
Capital A/cs: |
|
Debtors |
80,000 |
|
|
X |
3,00,000 |
|
Cash
at Bank |
1,90,000 |
|
Y |
2,50,000 |
|
Advertisement
Suspense |
1,20,000 |
|
Z |
1,50,000 |
7,00,000 |
|
|
|
|
11,00,000 |
|
11,00,000 |
|
|
|
|
|
|
|
X died on 1st October, 2021 and Y and Z decide to
share future profits in the ratio of 7 : 5. It was
agreed between his executors and the remaining partners that:
(i) Goodwill of the firm be valued at 2 ½
years' purchase of average of four completed years' profit which were:
|
Year |
2018 |
2019 |
2020 |
2021 |
|
Profits
( `) |
1,70,000 |
1,80,000 |
1,90,000 |
1,80,000 |
(ii)
X's share of profit from the closure of last accounting year till date
of death be calculated on the basis of last years' profit.
(iii) Building undervalued by ` 2,00,000; Machinery overvalued by
`
1,50,000 and Furniture overvalued by ` 46,000.
(iv) A provision of 5% be created on Debtors for
Doubtful Debts.
(v) Interest on Capital to be provided at 10% p.a.
(vi) Half of the net amount payable to X's executor was paid
immediately and the balance was transferred to his loan account which was to be
paid later.
Prepare Revaluation Account, X's Capital Account and X's
Executor's Account as on 1st October, 2021.
Answer:
|
Revaluation Account |
||||||
|
Dr. |
|
Cr. |
||||
|
Particulars |
` |
Particulars |
` |
|||
|
Machinery |
1,50,000 |
Building |
2,00,000 |
|||
|
Furniture |
46,000 |
|
|
|||
|
Provision for
Doubtful Debts |
4,000 |
|
|
|||
|
|
|
|
|
|||
|
|
2,00,000 |
|
2,00,000 |
|||
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
X’s Capital Account |
|
|||||
|
Dr. |
|
Cr. |
|
|||
|
Particulars |
` |
Particulars |
` |
|
||
|
Advertisement
Suspense A/c |
50,000 |
Balance b/d |
3,00,000 |
|
||
|
X’s Executors
A/c |
5,05,000 |
General Reserve |
15,000 |
|
||
|
|
|
Y’s Capital A/c |
1,12,500 |
|
||
|
|
|
Z’s Capital A/c |
75,000 |
|
||
|
|
|
Profit & Loss
Suspense |
37,500 |
|
||
|
|
|
Interest on
Capital |
15,000 |
|
||
|
|
|
|
|
|
||
|
|
5,55,000 |
|
5,55,000 |
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
X’s Executors Account |
|||||
|
Dr. |
|
Cr. |
|||
|
Particulars |
` |
Particulars |
` |
||
|
Bank A/c |
2,52,500 |
X’s Capital A/c |
5,05,000 |
||
|
X’s
Executors Loan Account |
2,52,500 |
|
|
||
|
|
|
|
|
||
|
|
57,000 |
|
57,000 |
||
|
|
|
|
|
||
|
|
|
|
|
|
|
Working
Notes:
WN1: Calculation of Share in General Reserve
Reserve=36,000×5/12=` 15,000
WN2: Calculation of Interest on Capital
Interest on capital=3,00,000×10×6/100×12=` 15,000
WN3: Calculation of Profit & Loss Suspense
Profit & Loss Suspense=1,80,000×5×6/12×12=` 37,500
WN4: Calculation of Share in Goodwill
Gaining Ratio = New Ratio - Old Ratio
Y's Gain = 7/12−4/12=7−4/12=3/12
Z's Gain = 5/12−3/12=5−3/12=2/12
Goodwill=Average Profit×No. of years' Purchase
=1,80,000×2.5=` 4,50,000
X's share in Goodwill = 4,50,000×5/12=`1,87,500,
`1,87,500
should be contributed by Y & Z in gaining ratio i.e. 3:2
Ts Grewal Solution 2022-2023
Click below for more Questions
Class 12 / Volume – I
Chapter 1 – Death of a Partner
Question No. 1 To 5
Question No. 5 To 10
Question No. 11 To 15
Question No. 16 To 20
Question No. 21 To 25
Question No. 26 To 30
Question No. 31 To 35
Question No. 36 To 38
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12th TS Grewal’s Accountancy Solutions