Question 26:
Iqbal
and Kamal are in partnership sharing profits and losses in 3 : 2. Kamal 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. Kamal's capital as per Balance
Sheet was
₹ 40,000 and his drawings till the date of death were ₹ 5,000.
Draw Kamal's Capital Account to be rendered to his representatives.
Answer:
|
Kamal’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
WN1Calculation of Interest on Capita of Kamal till date of his death
|
Interest |
= capital ×Rate100×time /12 |
|
|
=40,000×3/100×3/12 =300 |
WN2Calculation of Share of Profit of Kamal 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 |
Question 27:
Chandni, Bhanu, and Garima were partners in a firm sharing profits and losses in the ratio of 5:3:2. The firm closes its books on 31st March every year. On 1st October, 2024, Chandni died. On that date, her Capital Account showed a credit balance of 3,00,000. On the date of Chandni's death, the firm had a General Reserve of 60,000. The partnership deed provided that on the death of a partner, her representatives will be entitled to the following:
(i) Balance in the Capital Account and interest on the same @ 10% p.a.
(ii) Her share in the goodwill of the firm, The goodwill of the firm on Chandni's death was valued at 1,20,000.
(iii) Her share in the profits of the firm to be calculated on the basis of the previous year's profit. The profit of the firm for the year ended 31st March 2024 was 4,50,000.
Prepare Chandni's Capital Account to be presented to her executors.
(CBSE 2025)
Answer:
|
Chandni's Capital A/c |
|||
|
Particulars |
₹ |
Particulars |
₹ |
|
To executor’s A/c |
5,17,500 |
By Balance B/d |
3,00,000 |
|
(Balancing figure) |
|
By Interest on Capital A/c |
15,000 |
|
|
|
By General Reserve A/c |
30,000 |
|
|
|
By Bhanu’s Capital A/c |
36,000 |
|
|
|
By Garima’s Capital A/c |
24,000 |
|
|
|
By profit and Loss A/c |
1,12,500 |
|
|
5,17,500 |
|
5,17,500 |
Working note:
1. Calculation of interest on Capital
Opening balance of Capital = 3,00,000
Rate of interest is @10% p.a.
Interest on capital (for 6 Months) = 3,00,000×10/100×6/12= 15,000
2. Calculation of share of General Reserve
Share of Chandni = 60,000×5/10= 15,000
3. Calculation of share of Goodwill
Chandni’s share = 1,20,000×5/10= 60,000
Chandni’s share ₹60,000 in goodwill will be compensated by Bhanu, and Garima in their gaining ratio (3:2)
Bhanu = 60,000×3/5= 36,000
Garim = 60,000×2/5= 24,000
3. Calculation of share of profit (for 6 months)
Chandni’s share =4,50,000×5/10×6/12=1,12,500
Question 28:
A, B and C were partners in a firm. A died on 31st March, 2026 and the Balance Sheet of the from on that date was as under:
|
Liabilities |
|
₹ |
Assets |
₹ |
|
Creditors |
|
7,000 |
Cash at Bank |
12,000 |
|
General Reserve |
|
27,000 |
Debtors |
32,000 |
|
Workmen's Compensation Reserve |
10,000 |
Furniture |
30,000 |
|
|
Profit & Loss Account |
|
6,000 |
Plant |
40,000 |
|
Capitals: |
|
|
Patents |
8,000 |
|
A |
40,000 |
|
Deferred Advertisement Expenditure |
18,000 |
|
B |
30,000 |
|
|
|
|
C |
20,000 |
90,000 |
|
|
|
|
|
1,40,000 |
|
1,40,000 |
On A's death it was found that patents were valueless, furniture was to be brought down to ₹24,000, plant was to be reduced by ₹10,000 and there was a liability of ₹7,000 on account of workmen's compensation.
Pass the necessary Journal entries for the above at the time of A's death.
(CBSE 2019, Modified)
Answer:
|
Date |
Particulars |
|
L.F. |
(Dr.) ₹ |
(Cr.) ₹ |
|
|
Revaluation A/c |
Dr. |
|
24,000 |
|
|
|
To Patents A/c |
|
|
|
8,000 |
|
|
To Furniture A/c |
|
|
|
6,000 |
|
|
To Plant A/c |
|
|
|
10,000 |
|
|
(Being decrease in asstes account) |
|
|
|
|
|
|
A’s Capital A/c |
Dr. |
|
8,000 |
|
|
|
B’s Capital A/c |
Dr. |
|
8,000 |
|
|
|
C’s Capital A/c |
Dr. |
|
8,000 |
|
|
|
To Revaluation A/c |
|
|
|
24,000 |
|
|
(Being Loss of Revaluation account transferred to partners capital accounts in the ratio of 1:1:1) |
|
|
|
|
|
|
General Reserve A/c |
Dr. |
|
27,000 |
|
|
|
To A’s Capital A/c |
|
|
|
9,000 |
|
|
To B’s Capital A/c |
|
|
|
9,000 |
|
|
To C’s Capital A/c |
|
|
|
9,000 |
|
|
(Being General Reserve distributred in the ratio of 1:1:1) |
|
|
|
|
|
|
Workmen's Compensation Reserve A/c |
Dr. |
|
10,000 |
|
|
|
To Workmen's Compensation Claim A/c |
|
|
|
7,000 |
|
|
To A’s Capital A/c |
|
|
|
1,000 |
|
|
To B’s Capital A/c |
|
|
|
1,000 |
|
|
To C’s Capital A/c |
|
|
|
1,000 |
|
|
(Being Workmen's Compensation Reserve distributred in the ratio of 1:1:1after adjusting claim on it) |
|
|
|
|
|
|
A’s Capital A/c |
Dr. |
|
6,000 |
|
|
|
B’s Capital A/c |
Dr. |
|
6,000 |
|
|
|
C’s Capital A/c |
Dr. |
|
6,000 |
|
|
|
To Deferred Advertisement Expenditure A/c |
|
|
|
18,000 |
|
|
(Being capital written off with the amount of Deferred Advertisement Expenditure in the ratio of 1:1:1) |
|
|
|
|
|
|
Profit & Loss Appropriation A/c |
Dr. |
|
6,000 |
|
|
|
To A’s Capital A/c |
|
|
|
2,000 |
|
|
To B’s Capital A/c |
|
|
|
2,000 |
|
|
To C’s Capital A/c |
|
|
|
2,000 |
|
|
(Being Profit for the year distributed in the ratio of 1:1:1) |
|
|
|
|
Question 29:
Shirish, Harit and Asha were partners in a firm sharing profits in the ratio of 5:4:1. Shirish died on 30th June, 2025. On this date, their Balance Sheet was follows:
Balance sheet of Shirish,Harish, Asha as at 31st March, 2025 |
||||
Assets |
|
₹ |
Liabilities |
₹ |
Capital A/cs: |
|
|
Plant and Machinery |
5,60,000 |
Shirish |
1,00,000 |
|
Stock |
90,000 |
Harit |
2,00,000 |
|
Debtors |
10,000 |
Asha |
3,00,000 |
6,00,000 |
Cash |
40,000 |
Profits for the year 2024-25 |
|
80,000 |
|
|
Bills Payable |
|
20,000 |
|
|
|
|
|
7,00,000 |
|
7,00,000 |
|
|
|
|
|
|
According to the Partnership Deed, in addition to deceased partner’s capital, his executor is entitled to:
(i) Share in profits in the year of death on the basis of average of last two years’ profit. Profit for the year 2023-24 was 60,000.
(ii) Goodwill of the firm was to be valued at 2 years’ purchase of average of last two years’ profits.
Prepare Shirish’s Capital Account to be presented to his executor.
(CBSE 2019. Modified)
Answer:
Shirish’s Capital Account |
|||
Particulars |
Dr. ₹ |
Particulars |
Cr. ₹ |
To Sadhu’s Executors A/c |
2,18,750 |
By Balance b/d |
1,00,000 |
|
|
|
By P&L Suspense A/c (WN-1) |
8,750 |
|
|
|
By Manish’s Capital A/c (WN-2) |
56,000 |
|
|
|
By Asha’s Capital A/c (WN-2) |
14,000 |
|
|
|
By P&L Appropriation A/c(WN-3) |
40,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,18,750 |
|
2,18,750 |
Working notes:
WN-1 Calculation of Sadhu’s share of Profit
Average Profit of last two years= 80,000+60,000/2=70,000
Shirish’s Share of Profit = 70,000×5×3/10×12 = ₹ 8,750
WN-2 Calculation of goodwill
The average profits of the last two years were ₹ 70,000
Goodwill of the Firm = ₹ 70,000×2=1,40,000
Share of Shirish is in Goodwill = 1,40,000 × 5/10 = 70,000
Goodwill Share of Shirish is in Goodwill will be compensated by Harish and Asha in 4:1
Harish = 70,000 × 4/5 = 56,000
Asha = 70,000 × 1/5 = 14,000
WN-3 Calculation of Sadhu’s share of undistributed Profits for the year 2024-25
Shirish’s Share of Profit = 80,000×5/10 = ₹ 40,000
Question 30:
Balance Sheet of Somesh, Rahul and Kamlesh, who were sharing profts in the ratio of 3:3:4 respectively as on 31st March, 2025 was as follows:
|
BALANCE SHEET OF SOMESH, RAHUL AND KAMLESH as at 31st March, 2025 |
||||
|
Liabilities |
|
₹ |
Assets |
₹ |
|
Sundry Creditors |
|
44,000 |
Cash |
32,000 |
|
General Reserve |
|
10,000 |
Stock |
88,000 |
|
Capital A/cs: |
|
|
Investments |
94,000 |
|
Somesh |
1,20,000 |
|
Land and Building |
1,20,000 |
|
Rahul |
1,00,000 |
|
Loan to Somesh |
20,000 |
|
Kamlesh |
80,000 |
3,00,000 |
|
|
|
|
|
3,54,000 |
|
3,54,000 |
Somesh died on 31st July, 2025. 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 profit for the last three years which was ₹80,000.
(b) Somesh's share of profit till the date of his death was to be calculated on the basis of sales.
Sales for the year ended 31st March, 2025 was 8,00,000 and that from 1st April to 31st July, 2025 ₹3,00,000. Profit for the year ended 31st March, 2025 was ₹2,00,000.
(c) Interest on capital is to be allowed and interest on Drawings is to be charged @ 6% p.a. Drawings for the period were 36,000.
Prepare Somesh's Capital Account to be rendered to his executor.
Answer:
|
Somesh's Capital A/c |
|||
|
Particulars |
₹ |
Particulars |
₹ |
|
To Loan to Somesh |
20,000 |
By Balance B/d |
1,20,000 |
|
To Drawings A/c |
36,000 |
By Interest on Capital A/c |
2,400 |
|
To Interest on Drawing A/c |
360 |
By General Reserve A/c |
3,000 |
|
To executor’s A/c |
1,39,540 |
By Rahul’s Capital A/c |
20,571 |
|
(Balancing figure) |
|
By Kamlesh’s Capital A/c |
27,429 |
|
|
|
By profit and Loss A/c |
22,500 |
|
|
1,95,900 |
|
1,95,900 |
Working note:
1. Calculation of interest on Capital (from 1st April to 31st July, 2025)
Opening balance of Capital = ₹1,20,000
Rate of interest is @ 6% p.a.
Interest on capital (for 4 Months) = 1,20,000×6/100×4/12= ₹2,400
2. Calculation of share of General Reserve
Share of Somesh's = 10,000×3/10= 3,000
3. Calculation of share of Goodwill
Goodwill = 80,000×2=1,60,000
Somesh's share = 1,60,000×3/10= 48,000
Somesh's share ₹48,000 in goodwill will be compensated by Rahul and Kamlesh in their gaining ratio (3:4)
Rahul = 48,000×3/7= 20,571
Kamlesh = 48,000×4/7= 27,429
3. Calculation of share of profit (for 6 months)
Somesh's share of profit till the date of his death was to be calculated on the basis of sales.
Sales for the year ended 31st March, 2025 was 8,00,000.
Profit for the year ended 31st March, 2025 was ₹2,00,000.
Rate of profit earned by firm last year = 2,00,000×100/8,00,000= 25%
Sale from 1st April to 31st July, 2025 ₹3,00,000.
Profit earned by firm from 1st April to 31st July, 2025 = ₹3,00,000×25/100=75,000
Somesh's share of profit = 75,000×3/10=22,500
4. Calculation of interest on Drawing (for 6 months)
Amount of Drawings for the period were 36,000
Drawings is to be charged @ 6% p.a
Somesh's Interest on Drawing (for 4 month)= 36,000×6/100×4/12=720
Somesh's Interest on Drawing =720×1/2= 360
Note: interest on drawing will be charge for half period, since date of drawing has not been given.
Ts Grewal Solution 2026-2027
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Class 12 / Volume – I