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प्रश्न
Following is the Balance Sheet of Prateek, Rockey and Kushal as on March 31, 2020.
Books of Prateek, Rockey and Kushal
Balance Sheet as on March 31, 2020
|
Liabilities |
Amt (Rs.) |
Assets |
Amt (Rs.) |
||
|
Sundry Creditors |
16,000 |
Bills Receivable |
16,000 |
||
|
General Reserve |
16,000 |
Furniture |
22,600 |
||
|
Capital Accounts: |
|
Stock |
20,400 |
||
|
Prateek |
30,000 |
|
Sundry Debtors |
22,000 |
|
|
Rockey |
20,000 |
|
Cash at Bank |
18,000 |
|
|
Kushal |
20,000 |
70,000 |
Cash in Hand |
3,000 |
|
|
|
1,02,000 |
|
1,02,000 |
||
Rockey died on June 30, 2020. Under the terms of the partnership deed, the executors of a deceased partner were entitled to:
- Amount standing to the credit of the Partner’s Capital account.
- Interest on capital at 5% per annum.
- Share of goodwill on the basis of twice the average of the past three years’ profit and
- Share of profit from the closing date of the last financial year to the date of death on the basis of last year’s profit.
Profits for the year ending on March 31, 2018, March 31, 2019 and March 31, 2020 were Rs 12,000, Rs 16,000 and Rs 14,000 respectively. Profits were shared in the ratio of capitals.
Pass the necessary journal entries and draw up Rockey’s capital account to be rendered to his executor.
उत्तर
Books of Prateek and Kushal
Journal Entries
| Date | Particulars | L.F. | Amt (Rs.) |
Amt (Rs.) |
| 2020 June 30 |
Interest on Capital A/c Dr Profit and Loss (Suspense) A/c General Reserve A/c To Rockey’s Capital A/c (Share of profit, interest on capital and share of General Reserve credited to Rockey’s Capital Account) |
250
|
5,821
|
|
| June 30 | Prateek’s Capital A/c Dr. Kushal’s Capital A/c Dr. To Rockey’s Capital A/c (Rockey’s share of goodwill adjusted to Prateek’s and Kushal’s Capital Account in their gaining ratio, 3:2) |
4,800
|
8,000 | |
| June 30 | Rockey’s Capital A/c Dr. To Rockey Executor’s A/c (Balance of Rockey’s Capital Account transferred to his Executor’s Account) |
33,821 | 33,821 |
Rockey’s Capital Account
Dr. Cr.
|
Date |
Particulars |
J.F. |
Amount Rs |
Date |
Particulars |
J.F. |
Amount Rs |
||
|
2020 |
Rockey's Executor A/c |
|
33,821 |
2020 |
Balance b/d |
|
20,000 |
||
|
|
|
|
|
Interest on Capital |
|
250 |
|||
|
|
|
|
Profit and Loss (Suspense) A/c |
|
1,000 |
||||
|
|
|
|
General Reserve |
|
4,571 |
||||
|
|
|
|
Prateek’s Capital |
|
4,800 |
||||
|
|
|
|
Kushal’s Capital |
|
3,200 |
||||
|
|
|
|
33,821 |
|
|
|
33,821 |
||
Working Notes:
(1) Rockey’s Share of Profit
= Previous year’s profit × Proportionate Period × Share of Deceased Partner
= 14,000 x `3/12` x `2/7` = Rs. 1,000.
(2) Rockey’s Share of Goodwill
Goodwill of a firm = Average profit × Numbers of year’s Purchase
Average profit = `[ 12,000 + 16,000 + 14,000]/3 = [42,000]/3 = Rs. 14,000`
Goodwill of a firm = 14,000 × 2 = Rs 28,000
Rockey's Share = 28,000 x `2/7` = Rs. 8,000
(3) Gaining Ratio = New Ratio − Old Ratio
Prateek's Share = `3/5 - 3/7 = [21 - 15]/35 = 9/35`
Kushal's Share = `2/5 - 2/7 = [14 - 10]/35 = 4/35`
Gaining Ratio between Prateek and Kushal = 9:4 or 3:2
(4) Interest on Capital for 3 months i.e. from April 1, 2017 to June 30, 2017
Amount of × Rate of Interest × Period
= 20,000 x `5/100` x `3/12` = Rs.250.
APPEARS IN
संबंधित प्रश्न
Puneet, Pankaj and Pammy are partners in a business sharing profits and losses in the ratio of 2:2:1 respectively. Their balance sheet as on March 31, 2017 was as follows:
Books of Puneet, Pankaj and Pammy
Balance Sheet as on March 31, 2017
|
Liabilities |
Amt |
Assets |
Amt (Rs.) |
||
|
Sundry Creditors |
1,00,000 |
Cash at Bank |
20,000 |
||
|
Capital Accounts: |
|
Stock |
30,000 |
||
|
Puneet |
60,000 |
|
Sundry Debtors |
80,000 |
|
|
Pankaj |
1,00,000 |
|
Investments |
70,000 |
|
|
Pammy |
40,000 |
2,00,000 |
Furniture |
35,000 |
|
|
Reserve |
|
50,000 |
Buildings |
1,15,000 |
|
|
|
3,50,000 |
|
3,50,000 |
||
Mr. Pammy died on September 30, 2017. The partnership deed provided the following:
(i) The deceased partner will be entitled to his share of profit up to the date of death calculated on the basis of previous year’s profit.
(ii) He will be entitled to his share of goodwill of the firm calculated on the basis of 3 years’ purchase of average of last 4 years’ profit. The profits for the last four financial years are given below: for 2013–14; Rs 80,000; for 2014–15, Rs 50,000; for 2015–16, Rs 40,000; for 2016–17, Rs 30,000.
The drawings of the deceased partner up to the date of death amounted to Rs 10,000. Interest on capital is to be allowed at 12% per annum. Surviving partners agreed that Rs 15,400 should be paid to the executors immediately and the balance in four equal yearly instalments with interest at 12% p.a. on outstanding balance.
Show Mr. Pammy’s Capital account, his Executor’s account till the settlement of the amount due.
The Balance Sheet of Rajesh, Pramod and Nishant who were sharing profits in proportion to their capitals stood as on March 31, 2015:
Books of Rajesh, Pramod and Nishant
Balance Sheet as on March 31, 2015
|
Liabilities |
Amt (Rs.) |
Assets |
Amt (Rs.) |
||
|
Bills Payable |
6,250 |
Factory Building |
12,000 |
||
|
Sundry Creditors |
10,000 |
Debtors |
10,500 |
|
|
|
Reserve Fund |
2,750 |
Less: Reserve |
500 |
10,000 |
|
|
Capital Accounts: |
|
Bills Receivable |
7,000 |
||
|
Rajesh |
20,000 |
|
Stock |
15,500 |
|
|
Pramod |
15,000 |
|
Plant and Machinery |
11,500 |
|
|
Nishant |
15,000 |
50,000 |
Bank Balance |
13,000 |
|
|
|
69,000 |
|
69,000 |
||
Pramod retired on the date of Balance Sheet and the following adjustments were made:
a) Stock was valued at 10% less than the book value.
b) Factory buildings were appreciated by 12%.
c) Reserve for doubtful debtsbecreated up to 5%.
d) Reserve for legal charges to be made at Rs 265.
e) The goodwill of the firmbefixed at Rs 10,000.
f) The capital of the new firmbefixed at Rs 30,000. The continuing partners decide to keep their capitals in the new profit sharing ratio of 3:2.
Pass journal entries and prepare the balance sheet of the reconstituted firm after transferring the balance in Pramod’s Capital account to his loan account.
Following is the Balance Sheet of Jain, Gupta and Malik as on March 31, 2020.
Books of Jain, Gupta and Malik
Balance Sheet as on March 31, 2016
|
Liabilities |
Amt |
Assets |
Amt (Rs.) |
||
|
Sundry Creditors |
19,800 |
Land and Building |
26,000 |
||
|
Telephone Bills Outstanding |
300 |
Bonds |
14,370 |
||
|
Accounts Payable |
8,950 |
Cash |
5,500 |
||
|
Accumulated Profits |
16,750 |
Bills Receivable |
23,450 |
||
|
|
|
Sundry Debtors |
26,700 |
||
|
Capitals : |
|
Stock |
18,100 |
||
|
Jain |
40,000 |
|
Office Furniture |
18,250 |
|
|
Gupta |
60,000 |
|
Plants and Machinery |
20,230 |
|
|
Malik |
20,000 |
1,20,000 |
Computers |
13,200 |
|
|
|
1,65,800 |
|
1,65,800 |
||
The partners have been sharing profits in the ratio of 5 : 3 : 2. Malik decides to retire from business on April 1, 2020 and his share in the business is to be calculated as per the following terms of revaluation of assets and liabilities : Stock, Rs 20,000; Office furniture, Rs 14,250; Plant and Machinery Rs 23,530; Land and Building Rs 20,000.
A provision of Rs 1,700 to be created for doubtful debts. The goodwill of the firm is valued at Rs 9,000.
The continuing partners agreed to pay Rs 16,500 as cash on retirement of Malik, to be contributed by continuing partners in the ratio of 3:2. The balance in the capital account of Malik will be treated as loan.
Prepare Revaluation account, capital accounts, and Balance Sheet of the reconstituted firm.
Arti, Bharti and Seema are partners sharing profits in the proportion of 3:2:1 and their Balance Sheet as on March 31, 2016 stood as follows:
Books of Arti, Bharti and Seema
Balance Sheet as on March 31, 2016
|
Liabilities |
Amt (Rs.) |
Assets |
Amt (Rs.) |
||
|
Bills Payable |
12,000 |
Buildings |
21,000 |
||
|
Creditors |
14,000 |
Cash in Hand |
12,000 |
||
|
General Reserve |
12,000 |
Bank |
13,700 |
||
|
Capitals: |
|
Debtors |
12,000 |
||
|
Arti 20,000 |
|
Bills Receivable |
4,300 |
||
|
Bharti |
12,000 |
|
Stock |
1,750 |
|
|
Seema |
8,000 |
40,000 |
Investment |
13,250 |
|
|
|
78,000 |
|
78,000 |
||
Bharti died on June 12, 2016 and according to the deed of the said partnership, her executors are entitled to be paid as under:(a) The capital to her credit at the time of her death and interest thereon @ 10% per annum.
(b) Her proportionate share of reserve fund.
(c) Her share of profits for the intervening period will be based on the sales during that period, which were calculated as Rs 1,00,000. The rate of profit during past three years had been 10% on sales.
(d) Goodwill according to her share of profit to be calculated by taking twice the amount of the average profit of the last three years less 20%. The profits of the previous years were:
2013 – Rs 8,200
2014 – Rs 9,000
2015 – Rs 9,800
The investments were sold for Rs 16,200 and her executors were paid out. Pass the necessary journal entries and write the account of the executors of Bharti.
Partnership Deed of C and D, who are equal partners, has a clause that any partner may retire from the firm on the following terms by giving a six-month notice in writing:
The retiring partner shall be paid−
(a) the amount standing to the credit of his Capital Account and Current Account.
(b) his share of profit to the date of retirement, calculated on the basis of the average profit of the three preceding completed years.
(c) half the amount of the goodwill of the firm calculated at 11/2 times the average profit of the three preceding completed years.
C gave a notice on 31st March, 2017 to retire on 30th September, 2017, when the balance of his Capital Account was ₹ 6,000 and his Current Account (Dr.) ₹ 500. Profits for the three preceding completed years ended 31st March, were: 2015 − ₹ 2,800; 2016 − ₹ 2,200 and 2017 − ₹ 1,600. What amount is due to C as per the partnership agreement?
