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प्रश्न
State whether the following statement is True or False with reason.
For recording the Profit or Loss up to the date of death, Profit and Loss Appropriation Account is operated.
विकल्प
True
False
उत्तर
This statement is False.
For recording the profit or loss up to the death, Profit and Loss suspense Account is created and operated. This is because final accounts cannot be prepared on the date of the death of a partner. Till that period a separate account called Profit and Loss Suspense A/c is prepared.
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संबंधित प्रश्न
Answer in one sentence only.
What is the gain ratio?
Write the Word/Term/Phrase which can substitute the following statement:
Debit balance of revaluation Account.
What is Gain Ratio?
Give a word/term/phrase which can substitute the following statement:
A person who represents the deceased partner.
Benefit Ratio is the Ratio in which ______.
The ratio by which existing partners are benefited ________.
Profit and Loss Suspense Account is shown in the new Balance Sheet on __________ side.
Death is a compulsory ______.
Write a word, term, phrase, which can substitute the following statement.
A Person who represents the deceased partner on the death of the Partner.
Write a word, term, phrase, which can substitute the following statement.
Accumulated past profit kept in the form of reserve.
Write a word, term, phrase, which can substitute the following statement.
The proportion in which the continuing partners benefit due to the death of a partner.
State whether the following statement is True or False with reason.
A deceased partner is not entitled to the Goodwill of the firm.
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.
After the death of a partner, the entire amount due to the deceased partner is paid to the legal representative of the deceased partner.
Deceased partners share of profit up to the death is shown on ____________ side of Balance Sheet.
Answer in one sentence only.
How the death of a partner is a compulsory retirement?
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.
Anil, Sunil and Mohit were partners sharing profits and losses in the proportion of their capital Their Balance Sheet as on 31st March, 2019 was as follows:
| Balance Sheet as on 31st March, 2019 | ||||
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Capital Accounts: | Land and Building | 80,000 | ||
| Anil | 60,000 | Motor Lorry | 40,000 | |
| Sunil | 40,000 | Debtors | 32,000 | 28,000 |
| Mohit | 20,000 | Less: R.D.D. | (4,000) | |
| Creditors | 50,000 | Furniture | 36,000 | |
| Outstanding Salary | 6,000 | Bank | 28,000 | |
| Reserve fund | 36,000 | |||
| 2,12,000 | 2,12,000 | |||
Mohit died on 1st August. 2019 and the following adjustments were made:
(1) Assets to be revalued as under:
| Land and Building | ₹ 88,000 |
| Motor Lorry | ₹ 36,000 |
| Furniture | ₹ 34,000 |
(2) All debtors were good.
(3) Goodwill of the firm valued at two times the average profit of lost 4 years' profit.
(4) Mohit's share of profit is to be calculated on the basis of average profit of the last three years.
(5) Profit for four years 1st year ₹ 12,000, 2nd year ₹ 24,000, 3rd year ₹ 14,000, 4th year ₹ 22,000.
Prepare:
- Mohit's capital account showing amount payable to his executor.
- Give working note of Mohit's share of goodwill and profit up to the date of his death.
Rakesh, Mahesh & Mukesh were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Balance Sheet as on 31st March, 2019 as under:
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Capital A/c: | Plant & Machinery | 40,000 | ||
| Rakesh | 30,000 | Motor Truck | 20,000 | |
| Mahesh | 20,000 | Investment | 18,000 | |
| Mukesh | 10,000 | |||
| Bank Loan | 20,000 | Debtors | 16,000 | 14,000 |
| Creditors | 8,000 | Less: RDD | 2,000 | |
| Bills Payable | 18,000 | Bank | 14,000 | |
| 1,06,000 | 1,06,000 |
Mukesh Died on 30th June, 2019 and following adjustments were made:
- Assets were revalued as: Plant & Machinery ₹ 44,000, Motor Truck ₹ 18,000, Investment ₹ 17,000.
- All debtors were good.
- Goodwill of the firm valued at two times the average profits of the last five years. No Goodwill account to be shown in the books of the firm.
- Mukesh's share of profit up to his death to be calculated on the basis of average profits last two years.
- Five years Profits were - I year ₹ 6,000, II year ₹ 11,000, III year ₹ 7,000, IV year ₹ 12,000, V year ₹ 24,000 respectively.
Prepare Revaluation A/c, Partners Capital A/c and Balance Sheet as on 1 st July, 2019.
Deceased partner share of profit up to the death is shown on ______ side of Balance Sheet.
Prem, Verma, Sharma, were partners sharing profits and losses in the ratio 2: 1: 1 Their Balance Sheet as on 31st March 2019 is as follows.
| Balance Sheet as on 31st March, 2019 | |||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | 20,000 | Premises | 2,40,000 |
| Bank Loan | 90,000 | Debtors | 2,00,000 |
| Bill Payable | 10,000 | Furniture | 60,000 |
| General Reserve | 64,000 | Stock | 1,00,000 |
| Capital Accounts: | Cash | 2,00,000 | |
| Prem | 2,40,000 | ||
| Verma | 2,00,000 | ||
| Sharma | 1,76,000 | ||
| 8,00,000 | 8,00,000 | ||
- Prem died on 30th June 2019 and the following adjustments were made Prem’s share of profit is to be calculated on the average profit of the last two years.
- Prem’s share in the Goodwill of the firm be given him. Goodwill will be valued at three times of the average profits of the last four years. The profits were.
2015-16 ₹ 1,60,000 2016-17 ₹ 1,20,000 2017-18 ₹ 80,000 2018-19 ₹ 40,000 - Premises be valued at ₹ 2,80,000 and R.D.D. of ₹ 8,000 be created on debtors.
- Drawing of Prem up to the date of his death were ₹ 15000 per month.
- Interest on capital is allowed at 10% p.a. and to be charged on drawing at ₹ 4000.
- The amount due to Prem be transferred to his executors loan account.
Prepare: Prem’s Capital Account, Give working of Prem’s share in Goodwill, and Interest on capital.
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.
Shah, Patel, Bhide were partners in a business sharing profits and losses in the ratio of 2 : 1 : I respectively. Their Balance sheet as on 31st March 2022 was as follows:
| Balance Sheet as on 31-03-2022 | |||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capital A/c: | Plant & Machinery | 84,000 | |
| Shah | 84,000 | Debtors | 70,000 |
| Patel | 98,000 | Furniture | 42,000 |
| Bhide | 47,600 | Bank | 84,000 |
| Creditors | 25,200 | ||
| Bills Payable | 2,800 | ||
| General Reserve | 22,400 | ||
| 2,80,000 | 2,80,000 | ||
Bhide died on 1st July, 2022:
(1) Plant and Machinery was to be revalued to ₹ 98,000 and R.D.D. is to be created of ₹ 2,800.
(2) The drawings of Bhide up to the date of his death amounted to ₹ 14,000.
(3) Charge interest on drawings ₹ 1,400.
(4) His share of goodwill should be calculated at three year purchase of the profits for the last four years which were I year ₹ 2,30,000, II year ₹ 1,82,000, III year ₹ 98,000, IV ₹ 70,000.
(5) The deceased partner's share of profit up to the date of death to be calculated on the basis of average profit of last two years (III & IV year).
Prepare: Profit and Loss Adjustment Account, Partner's Capital Accounts, Balance Sheet of the continuing firm. Give working note of profit up to the date of death of Bhide and Goodwill.
A person who died is known as ______.
A, B and C were partners in a business sharing Profits and Losses in the ratio of 2 : 2 : 1 respectively. Their Balance Sheet as on 31st March, 2022 is as under.
| Balance Sheet as on 31st March, 2022 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Capital A/c: | Land and Building | 89,280 | |||
| A | 64,000 | Investment | 48,000 | ||
| B | 64,000 | Furniture | 25,600 | ||
| C | 32,000 | Debtors | 33,280 | 32,000 | |
| Creditors | 48,000 | Less : R.D.D. | 1,280 | ||
| Bills Payable | 3,200 | Bank | 13,120 | ||
| Bank Loan | 12,800 | Goodwill | 16,000 | ||
| 2,24,000 | 2,24,000 | ||||
On 1st July 2022, C died and the following adjustments were made:
(1) All the debtors were considered as good debtors.
(2) A contingent liability for a compensation of ₹ 1,440 was provided.
(3) Investment were sold out in the market at 10% profit.
(4) Loan were paid off.
5) Land and Building were depreciated by ₹ 1,280 and Furniture by ₹ 1,760.
(6) Goodwill of the firm was valued at ₹ 24,000. It was to be raised in the Books.
(7) C was entitled to get his share in the profit up to the date of his death. Profit for 2022-23 was estimated at ₹ 16,000.
(8) The amount due to C's executors was paid by NEFT.
Prepare Revaluation Account, Partners' Capital Account and Balance Sheet of new firm.
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.
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.
