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प्रश्न
Ram, Madhav, and Keshav are partners sharing Profit and Losses in the ratio 5:3:2 respectively. Their Balance Sheet as on 31st March 2018 was as follows.
| Balance Sheet as on 31st March 2018 | |||
| Liabilities | Amount ₹ | Assets | Amount ₹ |
| General Reserve | 25,000 | Goodwill | 50,000 |
| Creditors | 1,00,000 | Loose Tools | 50,000 |
| Unpaid Rent | 25,000 | Debtor | 1,50,000 |
| Capital Accounts | - | Live Stock | 1,00,000 |
| Ram | 100000 | Cash | 25,000 |
| Madhav | 75000 | ||
| Keshav | 50000 | ||
| 3,75,000 | 3,75,000 | ||
Keshav died on 31st July 2018 and the following Adjustment were agreed by as per partnership deed.
1. Creditors have increased by 10,000
2. Goodwill is to be calculated at 2 years purchase of average profits of 5 years.
3. The Profits of the preceding 5 years was
| 2013-14 | ₹ 90,000 |
| 2014-15 | ₹ 1,00,000 |
| 2015-16 | ₹ 60,000 |
| 2016-17 | ₹ 50,000 |
| 2017-18 | ₹ 50,000 (Loss) |
Keshav's share in it was to be given to him.
4. Loose Tools and livestock were valued at ₹ 80,000 and ₹ 1,20,000 respectively
5. R.D.D. was maintained at ₹ 10,000
6. Commission's ₹ 2000 p.m. was payable to Keshav Profit for 2018 -19 was estimated at ₹ 45000 and Keshav's share in it up to the date of his death was given to him.
Prepare
Revaluation A/c, Keshav’s capital A/c showing the amount payable to his executors.
उत्तर
| Dr. | In the books of the Partnership Firm Revaluation Account | Cr. | ||||
| Particulars |
Amount (₹ ) | Particulars | Amount (₹) | |||
| To R.D.D. A/c | 10,000 | By Loose Tools A/c | 30,000 | |||
| To Creditors A/c | 10,000 | By Live Stock A/c | 20,000 | |||
| To Partners’ capital A/c – Profit | ||||||
| Ram | 15000 | 30,000 | ||||
| Madhav | 9000 | |||||
| Keshav | 6000 | |||||
| 50,000 | 50,000 | |||||
| Dr. | Keshav’s Capital Account | Cr. | |||
| Particulars | Amount (₹) | Particulars | Amount (₹) | ||
| To Balance c/d | 92,000 | By Balance b/d | 50,000 | ||
| By General reserve A/c | 5,000 | ||||
| By Commission A/c (₹ 2,000 × 4 months) | 8,000 | ||||
| By Goodwill A/c | 20,000 | ||||
| By revaluation A/c – Profit | 6,000 | ||||
| By Profit and Loss Suspense A/c | 3,000 | ||||
| 92,000 | 92,000 |
||||
Working Notes :
(1) Calculation of share of Goodwill :
(a) Average profit = `"Total profit"/" No. of years"`
=` (90,000 + 1,00,000 + 60,000 + 50,000 – 50,000)/ 5`
= `(2,50,000)/5`
= ₹50,000
(b) Goodwill = Average profit × No. of years
= 50,000 × 2
= ₹1,00,000
(c) Share of Goodwill to Keshav
= Goodwill of the firm × Keshav’s share
= 1,00,000 × `2/10`
= ₹ 20,000
(2) Calculation of share of profit due to Keshav Share of profit
= Last year profit × Share of Keshav × Period
= ₹ 45,000 ×`2/10xx 4/12`
= ₹ 3,000 (Profit and Loss Suspense Account)
संबंधित प्रश्न
Answer in one sentence only.
What is the gain ratio?
What is Gain Ratio?
Give a word/term/phrase which can substitute the following statements :
The partner who died.
Give a word/term/phrase which can substitute the following statement:
A person who represents the deceased partner.
Answer in one sentence only.
What is gain ratio or benefit ratio ?
Benefit Ratio is the Ratio in which ______.
Death is a compulsory ______.
The balance on the capital account of partners, on his death, is transferred to __________ account.
Write a word, term, phrase, which can substitute the following statement.
Accumulated past profit kept in the form of reserve.
State whether the following statement is True or False with reason.
A deceased partner is entitled to his share of General Reserve.
State whether the following statement is True or False with reason.
If Goodwill is written off a deceased partner’s capital account is debited.
When Goodwill is raised at its full value and it is written off __________ account is to be credited.
Answer in one sentence only.
To which account Profit is to be transferred upto the date of his death?
Virendra, Devendra, and Narendra were partners sharing Profit and Losses in the ratio of 3:2:1. Their Balance Sheet as on 31st March 2019 was as follows.
| Balance Sheet as on 31st March 2019 | |||
| Liabilities | Amount ₹ | Assets | Amount ₹ |
| Bank Loan | 25,000 | Furniture | 50,000 |
| Creditors | 20,000 | Land & Building | 50,000 |
| Bills Payable | 5,000 | Motor Car | 20,000 |
| Reserve Fund | 30,000 | Sundry Debtors | 50,000 |
| Capital Account: | Bills Receivable | 20,000 | |
| Virendra | 90,000 | Investments | 50,000 |
| Devendra | 60,000 | Cash at Bank | 20,000 |
| Narendra | 30,000 | ||
| 2,60,000 | 2,60,000 | ||
Mr. Virendra died on 31st August 2019 and the Partnership deed provided that. That the event of the death of Mr. Virendra his executors be entitled to be paid out.
1. The capital to his credit at the date of death.
2. His proportion of Reserve at the date of the last Balance sheet.
3. His proportion of Profits to date of death based on the average profits of the last four years.
4. His share of Goodwill should be calculated at two years purchase of the profits of the last four years for the year ended 31st March were as follows -
| 2016 | ₹ 40,000 |
| 2017 | ₹ 60,000 |
| 2018 | ₹ 70,000 |
| 2019 | ₹ 30,000 |
5. Mr. Virendra has drawn ₹ 3000 p.m. to date of death, There is no increase and Decrease the value of assets and liabilities.
Prepare Mr. Virendras Executors A/c
The Balance Sheet of Sohan, Rohan and Mohan who were sharing profits and Losses in the ratio of 3:2:1 as follows.
| Balance Sheet as on 31st March 2019 | |||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Bank Overdraft | 18,000 | Bank | 48,000 |
| Creditors | 85,000 | Debtors | 30,000 |
| Bills payable | 40,000 | Land and Building | 40,000 |
| Bank Loan | 1,50,000 | Machinery | 80,000 |
| General Reserve | 27,000 | Investments | 40,000 |
| Capital Account: | Computers | 40,000 | |
| Sohan | 20,000 | Stock | 90,000 |
| Rohan | 20,000 | Patents | 12,000 |
| Mohan | 20,000 | ||
| 3,80,000 | 3,80,000 | ||
Mr. Rohan died on 1st October 2019 and the following adjustments were made.
- Goodwill of the firm is valued at ₹ 30,000.
- Land and Building and Machinery were found to be undervalued by 20%.
- Investments are valued at ₹ 60,000
- Stock to be undervalued by ₹ 5000 and a provision of 10% as debtors were required.
- Patents were valueless.
- Mr. Rohan was entitled to share in profits up to the date of death and it was decided that he may be allowed to retain his drawings as his share of profit. Rohan’s drawings till the date of death was ₹ 25000.
Prepare Partners' capital accounts.
The following is the Balance Sheet of Shikha, Divit and Naman, who were partners sharing profits and losses in the ratio of 2 : 2 : 1.
| Balance sheet as on 31st March 2020 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Capital A/cs: | Investment | 1,40,000 | |||
| Shikha | 80,000 | 2,20,000 | Stock | 48,000 | |
| Divit | 60,000 | Debtors | 81,600 | 80,000 | |
| Naman | 80,000 | Less: R.D.D. | 1,600 | ||
| Creditors | 48,000 | Cash | 12,000 | ||
| Outstanding Salaries | 12,000 | ||||
| 2,80,000 | 2,80,000 | ||||
Naman died on 1st July, 2020 and the following adjustment were made in the books of the firm:
(1) All debtors were considered as good and the Reserve for Doubtful Debts was no longer necessary.
(2) A contingent liability for compensation of ₹ 3,600 was to be provided.
(3) Investment worth ₹ 80,000 were taken over by the executor of Naman and the remaining investments were sold ₹ 60,000.
(4) Stock was revalued at ₹ 60,000.
(5) The goodwill of the firm was valued at ₹ 40,000 and was to be shown in the books.
(6) The deceased partner's share in profit up to the date of his death was to be calculated on the basis of the preceding year's profit which was ₹ 32,000.
Prepare the Profit and Loss Adjustment Account, Capital Accounts of Partners and the Balance Sheet of the new firm after the death of Naman.
Roohi, Mona, Meena were partners in a business sharing profits and losses in the ratio of 2 : 1 : 1 respectively. Their balance sheet as on 31st March, 2019.
| Balance sheet as on 31st March, 2019 | ||||
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Capital A/c: | Plant & Machinery | 60,000 | ||
| Roohi | 60,000 | 1,64,000 | Debtors | 50,000 |
| Mona | 70,000 | Furniture stock | 30,000 | |
| Meena | 34,000 | Bank | 60,000 | |
| Creditors | 18,000 | |||
| Bills Payable | 2,000 | |||
| General Reserve | 16,000 | |||
| 2,00,000 | 2,00,000 | |||
Meena died on 1st July, 2019:
- Plant & machinery was to be revalued at ₹ 70,000 and RDD is to be created of ₹ 2,000.
- The drawings of Meena up to the date of her death amounted to ₹ 10,000.
- Charge interest on drawings ₹ 1,000.
- Her share of goodwill should be calculated at three year purchase of the profits for the last four years which were: I year ₹ 1,50,000, II year ₹ 1,30,000, III year ₹ 70,000. IV ₹ 50,000.
- The deceased partners' share of profit up to the date is to be calculated on the basis of average profit of last two years. (Ill & IV year)
Prepare Profit and Loss Adjustment account, Partners Capital Accounts and Balance Sheet of the continuing firm, give working note on share of profit and goodwill.
Deceased partner share of profit up to the death is shown on ______ side of Balance Sheet.
Arun, Varun and Karun were partners in a business sharing profits and losses in the ratio of 2 : 2: 1 respectively. Their Balance sheet as on 31st March, 2019 was as under :
| Balance Sheet as on 31st March,2019 | ||||
| Liabilities | Amount ₹ | Assets | Amount ₹ | |
| Capital Account: | Land and Building | 27,900 | ||
| Arun | 20,000 | Investment | 15,000 | |
| Varun | 20,000 | Furniture | 8,000 | |
| Karun | 10,000 | Debtors | 10,400 | 10,000 |
| Creditors | 16,000 | Less: R.D.D | 400 | |
| Bank Loan | 4,000 | Bank | 4,100 | |
| Goodwill | 5,000 | |||
| 70,000 | 70,000 | |||
On 1st July, 2019 Karun died and the following adjustments were made:
- All the debtors were considered as good.
- Bank Loan were paid off.
- Furniture was depreciated by ₹ 550.
- Investments were sold out in the Market at 10% profit.
- Goodwill of the firm was valued at ₹ 7,500. It was to be raised in the books.
- Karun was entitled to get his share in the profit up to the date of his death. Profit for 2019-2020 was estimated at ₹ 5,000.
- The amount due to Karun’s Executor was paid by NEFT.
Prepare:
- Profit and Loss Adjustment A/c.
- Partners’ Capital Account.
- Balance sheet of New Firm.
A person who died is known as ______.
Answer in one sentence only:
What is New Profit Sharing Ratio?
Het, Heet and Hari are partners sharing profits and losses in the ratio 5 : 3 : 2 respectively. Their Balance Sheet as on 31st March, 2023 was as follows:
| Balance Sheet as on 31st March, 2023 | |||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| General Reserve | 35,000 | Goodwill | 70,000 |
| Creditors | 1,40,000 | Loose Tools | 70,000 |
| Unpaid Rent | 35,000 | Debtors | 2,10,000 |
| Capital Accounts: | Livestock | 1,40,000 | |
| Het | 1,40,000 | Cash | 35,000 |
| Heet | 1,05,000 | ||
| Hari | 70,000 | ||
| 5,25,000 | 5,25,000 | ||
Hari died on 3lst July, 2023 and the following adjustments were agreed by as per partnership deed:
(1) Creditors have increased by ₹ 14,000.
(2) Goodwill is to be calculated at 2 years purchase of average profits of 5 years.
(3) The profits of the preceding 5 years was
| 2018-19 | ₹ 1,26,000 |
| 2019-20 | ₹ 1,40,000 |
| 2020-21 | ₹ 84,000 |
| 2021-22 | ₹ 70,000 |
| 2022-23 | ₹ 70,000 (Loss) |
Hari's share in it was to be given to him.
(4) Loose Tools and Livestock were valued at ₹ 1,12,000 and ₹ 1,68,000 respectively.
(5) R.D.D. was maintained at ₹ 14,000.
( 6) Commission ₹ 2,800 p.m. was payable to Hari. Profit for 2023-24 was estimated at ₹ 63,000 and Bari's share in it up to the date of his death was given to him.
Prepare Revaluation Ale, Bari's Capital Ale showing the amount payable to his executors.
The Balance Sheet of Karma, Punya and Bandhan who were sharing Profits and Losses in the ratio of 3 : 2 : 1 is as follows:
| Balance Sheet as on 31st March, 2022 | |||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Bank Overdraft | 27,000 | Bank | 72,000 |
| Creditors | 1,27,500 | Debtors | 45,000 |
| Bills Payable | 60,000 | Land and Building | 60,000 |
| Bank Loan | 2,25,000 | Machinery | 1,20,000 |
| General Reserve | 40,500 | Investments | 60,000 |
| Capital Accounts: | Computers | 60,000 | |
| Karma | 30,000 | Stock | 1,35,000 |
| Punya | 30,000 | Patents | 18,000 |
| Bandhan | 30,000 | ||
| 5,70,000 | 5,70,000 | ||
Punya died on 1st October, 2022 and the following adjustments were made:
(1) Goodwill of the firm is valued at ₹ 45,000.
(2) Land & Building and Machinery were found to be undervalued by 20%.
(3) Investments are valued at ₹ 90,000.
(4) Stock to be undervalued by ₹ 7,500 and a provision of 10% as Debtors was required.
(5) Patents were valueless.
(6) Punya was entitled to share in profits up to the date of death and it was decided that he may be allowed to retain his drawings as his share of profit. Punya's drawings till date of death was ₹ 37,500.
Prepare Partner's Capital Accounts.
Suresh, Naresh and Paresh were equal partners. On 31st March, 2019 their Balance sheet was as follows:
| Balance Sheet as on 31st March, 2019 | |||
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
| Capital Accounts: | Land and Building | 2,00,000 | |
| Suresh | 2,50,000 | Furniture | 1,50,000 |
| Naresh | 1,00,000 | Debtors | 1,50,000 |
| Paresh | 1,00,000 | Cash | 1,00,000 |
| Sundry creditors | 1,50,000 | ||
| 6,00,000 | 6,00,000 | ||
Suresh died on 30th June, 2019 and the following adjustments were agreed as:
- Furniture was to be adjusted to its market price of ₹ 1,70,000.
- Land and building was to be depreciated by 10%.
- Provide R.D.D. at 5% on debtors.
- The profit up to the date of death of Suresh is to be calculated on the basis of average profit of last year which was ₹ 90,000.
Prepare:
- Profit and loss adjustment account.
- Partners’ capital account.
- Balance sheet of the continuing firm.
