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प्रश्न
State whether the following statement is True or False with reason.
If Goodwill is written off a deceased partner’s capital account is debited.
विकल्प
True
False
उत्तर
This statement is False.
When the benefits of goodwill are given to the deceased partner, his capital account is credited and when such goodwill is written off, capital accounts of remaining partners are debited.
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संबंधित प्रश्न
Write the Word/Term/Phrase which can substitute the following statement:
Debit balance of revaluation Account.
What is Gain Ratio?
Benefit Ratio is the Ratio in which ______.
The ratio by which existing partners are benefited ________.
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.
After the death of a partner, the entire amount due to the deceased partner is paid to the legal representative of the deceased partner.
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.
Deceased partners share of profit up to the death is shown on ____________ side of Balance Sheet.
Benefit ratio = New Ratio __________.
When Goodwill is raised at its full value and it is written off __________ account is to be credited.
Answer in one sentence only.
To whom you distribute General Reserve on the death of a partner?
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.
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.
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.
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.
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.
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.
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.
