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12th | Death  of a Partner | Question No.  6 To 10 | Ts Grewal Solution 2022-2023

Question 6:


Keshv, Nirmaland Pankaj are partners sharing profits in the ratio of 5: 3: 2. Pankaj died and his share is taken by Keshv. Calculate new profit-sharing ratio of Keshv and Nirmal.

 

Answer:


Old Ratio (Keshv, Nirmaland Pankaj) = 5: 3: 2

Pankaj died from the firm.

His profit share = 210

Pankaj’s share is taken by Keshv in entirety

New Ratio = Old Ratio + Share acquired from Pankaj

Keshv 's New Share: 5/10+2/10=7/10

Nirmal 's New Share: 3/10+0=310

 New Profit Ratio (Keshv and Nirmal) = 7: 3

Question 7:


X, Y and Z were partners in a firm sharing profit in 3 : 2 : 1. The firm closes its books on 31st March every year. Y died on 30th June, 2021. On Y's death goodwill of the firm was valued at  ` 60,000. Y's share in the profit of the firm till the date of his death was to be calculated on the basis of previous year's profit which was  ` 1,50,000.
Pass necessary Journal entries for goodwill and Y's share of profit at the time of his death.

 

Answer:


Journal

Date

Particulars

L.F.

Debit

 (`)

Credit

 (`)

2021

 

 

 

 

June 30

X’s Capital A/c

Dr.

 

15,000

 

 

Z’s Capital A/c

Dr.

 

5,000

 

 

    To Y’s Capital A/c

 

 

 

20,000

 

(Y’s share of goodwill adjusted through X and Y’s Capital Account in gaining ratio, i.e. 3 : 1)

 

 

 

 

 

 

 

 

 

 

June 30

Profit and Loss Suspense A/c

Dr.

 

12,500

 

 

   To Y’s Capital A/c

 

 

 

12,500

 

(Y’s profit share till his death debited to P&L Suspense A/c)

 

 

 

 

 

 

 

 

 

 

Working Notes:
WN 1: Calculation of Y's Share of Goodwill
Goodwill of the Firm= 
` 60,000

Y's Share of Goodwill = 60,000 × 2/6 = ` 20,000

20,000 will be debited to X's & Z's Capital A/c in gaining ratio of 3 : 1

X will pay = 20,000 × 3/4 = ` 15,000

Z will pay = 20,000 × 1/4 = ` 5,000 

WN 2: Calculation of Y's Share of Profit
Previous Year's Profit = 
` 1,50,000

Y's share of Profit (till death) = Previous Year's Profit × Y's Profit Share × 3 months (April 01, 2021 till June 30, 2021)

Y's share of Profit (till death) = 1,50,000 × 2/6 × 3/12= ` 12,500

 

Question 8:


A, B and C were partners sharing profits in the ratio of 3 : 2 : 1. The firm closes its books on 31st March every year. B died on 30th June, 2020. On his death, Goodwill of the firm was valued at  ` 6,00,000. B's share in profit or loss till the date of death was to be calculated on the basis of previous year's profit which was  ` 15,00,000 (Loss). Pass necessary Journal entries for goodwill and his share of loss.

 

Answer:


In the books of the A, B and C

Journal

Date

Particulars

 

L.F.

Debit
(
`)

Credit
(
`)

2020

 

 

 

 

 

June 30

A’s Capital A/c (2,00,000 × 3/4)

Dr.

 

1,50,000

 

 

C’s Capital A/c (2,00,000 × 1/4)

Dr.

 

50,000

 

 

  To B’s Capital A/c (WN1)

 

 

 

2,00,000

 

(Being B’s share of goodwill adjusted in gaining ratio 3 : 1)

 

 

 

 

 

 

 

 

 

 

 

B’s Capital A/c (WN2)

Dr.

 

1,25,000

 

 

  To Profit & Loss Suspense A/c

 

 

 

1,25,000

 

(Being B’s Share of loss debited to his Capital)

 

 

 

 

 

  Working Notes:                              

1. Calculation of B’s Share of Goodwill

Goodwill

=

 ` 6,00,000

B’s Share of Goodwill

=

 ` (6,00,000 × 2/6) =  ` 2,00,000


2. Calculation of B’s Share of Loss till the date of his death i.e. 30th June, 2020

Previous year’s loss

=

 ` 15,00,000

B’s share of loss till the date of death

=

Previous year’s loss × B’s Share of Loss × Months till the date of his death/12

 

=

 ` (15,00,000 × 2/6 × 3/12)

 

=

 ` 1,25,000

Question 9:


P, R and S are in partnership sharing profits 4/8, 3/8 and 1/8 respectively. It is provided in the Partnership Deed that on the death of any partner his share of goodwill is to be valued at one-half of the net profit credited to his account during the last four completed years.
R died on 1st January, 2021. The firm's profits for the last four years ended 31st December, were as: 
2017  ` 1,20,000; 2018 −
 ` 80,000; 2019 −  ` 40,000; 2020 −  ` 80,000.
(a) Determine the amount that should be credited to R in respect of his share of Goodwill.
(b) Pass Journal entry without raising Goodwill Account for its adjustment.

 

Answer:


Calculation of R’s Share of Goodwill

Profit credited to R’s Capital Account in 4 years = Net profit for last four years × R’s Share
=1,20,000+80,000+80,000+4,000×3/8          

=3,20,000×3/8=1,20,000

(b)

Journal

Particulars

L.F.

Debit

`

Credit

`

P’s Capital A/c

Dr.

 

48,000

 

S’s Capital A/c

Dr.

 

12,000

 

To R’s Capital A/c

 

 

60,000

(R’s share of goodwill adjusted)

 

 

 


Working Notes:

R’s Share of Goodwill =
` 60,000

Old Ratio (P, R and S) = 4 : 3 : 1

R died.

Gaining Ratio = 4 : 1

This share of goodwill is to be distributed between P and S in their gaining ratio (i.e. 4 : 1)

p’s Share of Goodwill = 60,000×4/5=48,000

S’s share of Goodwill =60,000 ×1/5=12,000

Question 10: Dinkar, Navita and Vani were partners sharing profits and losses in the ratio of 3 :2:1. Navita died on 30th June, 2017. Her share of profit for the intervening period was based on the sales during that period, which were ` 6,00,000. The rate of profit during the past four years had been 10% on sales. The firm closes its books on 31st March every year.


Calculate Navita’s share of profit. (CBSE 2019)

 

Answer:


Sales during that period of the firm from 1st April, 2017 to 30th June, 2017 ` 6,00,000

The rate of profit during the past four years had been 10% on sales

Profit of the firm from 1st April, 2017 to 30th June, 2017 is ` 6,00,000 × 10/100 = ` 60,000

Share of Profit is ` 60,000 × 2/6 = ` 20,000

 

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

Ts Grewal Solution 2022-2023

Ts Grewal Solution 2021-2022

Ts Grewal Solution 2020-2021