Question 6:
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, 2024. 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 ( ₹) |
|
|
2024 |
|
|
|
|
|
|
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) |
|
|
|
|
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|
|
|
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|
Working Notes:
WN1: 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
WN2: 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, 2023 till June 30, 2024)
Y's share of Profit (till death) = 1,50,000 × 2/6 × 3/12= ₹ 12,500
Question 7:
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, 2025. The firm's profits for the last four
years ended 31st December, were as:
2022− ₹ 1,20,000; 2023 − ₹
80,000; 2024 − ₹ 40,000; 2025 − ₹ 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 8:
P,
Q and R were partners in a firm sharing profits in the ratio of 3:2:1. P dies
and the new profit-sharing ratio of Q and R was agreed to be equal. On P's
death, goodwill of the firm was valued at 60,000:
Pass
the necessary entries for the treatment of goodwill under the following
conditions:
(a)
When Goodwill does not exist in the books of account and
(b)
When Goodwill exist in the books of account at Rs. 30,000.
Answer:
(a)
When Goodwill does not exist in the books of account
|
Date
|
Particulars |
|
Dr.
( ₹) |
Cr.
( ₹) |
|
(i) |
Q's Capital A/c |
Dr. |
10,000 |
|
|
|
R's Capital Ale |
|
20,000 |
|
|
|
ToP's Capital A/e |
|
|
30,000 |
|
|
(Being Goodwill is adjusted) |
|
|
|
|
|
|
|
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|
(b)
When Goodwill exist in the books of account at Rs. 30,000.
|
Date
|
Particulars |
|
Dr.
( ₹) |
Cr.
( ₹) |
|
(i) |
P's Capital A/c |
Dr. |
30,000 |
|
|
|
Q's Capital A/c |
|
|
30,000 |
|
|
R's Capital Ale |
|
|
|
|
|
ToGoodwill A/c |
|
|
30,000 |
|
|
(Being Written-off) |
|
|
|
|
(ii) |
Q's Capital A/c |
Dr. |
10,000 |
|
|
|
R's Capital Ale |
|
20,000 |
|
|
|
ToP's Capital A/e |
|
|
30,000 |
|
|
(Being Goodwill is adjusted) |
|
|
|
|
|
|
|
|
|
Working
Note:
Qs Gain =
1/2- 2/6= 1/6;
R'S Gain = 1/2-1/6 =2/6
and
Gaining Ratio = 1:2.
Question
9: Dinkar,
Navita and Vani were
partners sharing profits and losses in the ratio of 3 :2:1.
Navita died on 30th June, 2024. 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 Modified)
Answer:
Sales during that period of the firm from 1st
April, 2024 to 30th June, 2024 ₹ 6,00,000
The rate of profit during the past four years had
been 10% on sales
Profit of the firm from 1st April, 2024
to 30th June, 2024 is ₹ 6,00,000 × 10/100 = ₹ 60,000
Share of Profit is ₹ 60,000 × 2/6 = ₹ 20,000
Question 10: Juhi, Riya and Pari are partners sharing profits and losses in the ratio of3 :2:1.Riya died on 30th June, 2024. For the year ended
31st March, 2025, proportionate profit of 2024 is to be taken into
consideration. During the year ended 31 st March,
2025, bad debts of ₹2,000 had to be adjusted. Profit for the year ended
31st March, 2024 was ₹14,000 before adjustment of bad debts.
Calculate
Riya's share of profit till the date of her death.
Answer:
Annual
Net profit = 14,000-2,000=12,000
Profit for 3 month (from 1st april,
2024 to 30th June, 2024)= 12,000×3/12=3,000
Riya's Share of Profit=
3,000×2/6= 1,000
Ts Grewal Solution 2025-2026
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Class 12 / Volume – I