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प्रश्न
X, Y and Z were partners in a firm sharing profit in 3 : 2 : 1. The firm closes its books on 31st March every year. Y died on 30th June, 2018. On Y's death goodwill of the firm was valued at ₹ 60,000. Y's share in the profit of the firm till the date of his death was to be calculated on the basis of previous year's profit which was ₹ 1,50,000.
Pass necessary Journal entries for goodwill and Y's share of profit at the time of his death.
उत्तर
| Journal Entry | ||||
| Date | Particulars | L.F. | Debit Amount (₹) | Credit Amount (₹) |
| 2018 | ||||
| June 30 | X’s Capital A/c ...Dr. | 15,000 | ||
| Z’s Capital A/c ..Dr. | 5,000 | |||
| To Y’s Capital A/c | 20,000 | |||
| (Y’s share of goodwill adjusted through X and Y’s Capital Account in gaining ratio, i.e. 3 : 1) | ||||
| June 30 | Profit and Loss Suspense A/c ...Dr. | 12,500 | ||
| To Y’s Capital A/c | 12,500 | |||
| (Y’s profit share till his death debited to P&L Suspense A/c) | ||||
Working Notes:
(1) Calculation of Y's Share of Goodwill
Goodwill of the firm = Rs 60,000
Y's share of goodwill = `60,000 xx 2/6`
= ₹ 20,000
20,000 will be debited to X's and Z's capital A/c in gaining ratio of 3 : 1
X will pay = `20,000 xx 3/4`
= ₹ 15,000
Z will pay = `20,000 xx 1/4`
= ₹ 5,000
(2) Calculation of Y's Share of Profit
Previous yeras profit = ₹ 1,50,000
Y's share of profit (till death) = previous years profit x Ys profit share x 3 months (April 01, 2017)
Y's share of profit (till death) = `1,50,000 xx 2/6 xx 3/12`
= ₹ 12,500
APPEARS IN
संबंधित प्रश्न
Sangeeta, Saroj and Shanti are partners sharing profits in the ratio of 2:3:5. Goodwill is appearing in the books at a value of Rs 60,000. Sangeeta retires and goodwill is valued at Rs 90,000. Saroj and Shanti decided to share future profits equally. Record necessary Journal entries.
Why i is it necessary to ascertain new profit sharing ratio even for old partners when a new partner is admitted?
X and Y are partners sharing profits in 5:3 ratio admitted Z for 1/10 share which he acquired equally for X and Y. Calculate new profit sharing ratio?
A, B and C are partners sharing profits in 2:2:1 ratio admitted D for 1/8 share which he acquired entirely from A. Calculate new profit sharing ratio?
A, B and C were partners in a firm sharing profits in 3:3:2 ratio. They admitted D as a new partner for 4/7 profit. D acquired his share 2/7 from A. 1/7 from B and 1/7 from C. Calculate new profit sharing ratio?
Aparna, Manisha and Sonia are partners sharing profits in the ratio of 3 : 2 : 1. Manisha retired and goodwill of the firm is valued at ₹ 1,80,000. Aparna and Sonia decided to share future profits in the ratio of 3 : 2. Pass necessary Journal entries.
Hanny, Pammy and Sunny are partners sharing profits in the ratio of 3 : 2 : 1. Goodwill is appearing in the books at a value of ₹ 60,000. Pammy retires and at the time of Pammy's retirement, goodwill is valued at ₹ 84,000. Hanny and Sunny decided to share future profits in the ratio of 2 : 1. Record the necessary Journal entries.
A, B, and C are partners sharing profits in the ratio of `4/9: 3/9: 2/9`. B retires and his capital after making adjustments for reserves and gain (profit) on revaluation stands at ₹ 1,39,200. A and C agreed to pay him ₹ 1,50,000 in full settlement of his claim. Record necessary journal entry for adjustment of goodwill if the new profit-sharing ratio is decided at 5: 3.
Ram, Laxman and Bharat are partners sharing profits in the ratio of 3 : 2 : 1. Goodwill is appearing in the books at a value of ₹ 1,80,000. Laxman retires and at the time of his retirement, goodwill is valued at ₹ 2,52,000. Ram and Bharat decided to share future profits in the ratio of 2 : 1. The Profit for the first year after Laxman's retirement amount to ₹ 1,20,000. Give the necessary Journal entries to record goodwill and to distribute the profit. Show your calculations clearly.
The Balance Sheet of X, Y and Z who were sharing profits in ratio of their capitals stood as follows at 31st March, 2019:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
|||
| Sundry Creditors |
13,800 |
Cash at Bank | 11,000 | |||
| Capital A/cs: | Sundry Debtors | 10,000 | ||||
| X |
45,000 |
|
Less: Provision for Doubtful Debts | 200 | 9,800 | |
| Y | 30,000 | Stock | 16,000 | |||
| Z |
15,000 |
90,000 |
Plant and Machinery |
17,000 |
||
|
|
|
Land and Building |
50,000 |
|||
|
1,03,800 |
1,03,800 |
|||||
Y retired on 1st April, 2019 and the following terms:
(a) Out of the insurance premium debited to Profit and Loss Account, ₹ 1,500 to be carried forward as Prepaid Insurance.
(b) Provision for Doubtful Debts to be brought up to 5% of Sundry Debtors.
(c) Land and Building to be appreciated by 20%.
(d) A provision of ₹ 4,000 be made in respect of outstanding bills for repairs.
(e) Goodwill of the firm was determined at ₹ 21,600.
Y's share of goodwill be adjusted to that of X and Z who will share profits in future in the ratio of 3 : 1.
Pass necessary Journal entries and give the Balance Sheet after Y's retirement.
X, Y and Z are partners sharing profits in the ratio of 4 : 3 : 2. Their Balance Sheet as at 31st March, 2019 stood as follows:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
24,140 |
Cash at Bank | 3,300 | ||
| Capital A/cs: |
|
Sundry Debtors |
3,045 |
|
|
| X | 12,000 |
|
Less: Provision for Doubtful Debts |
105 |
2,940 |
| Y |
9,000 |
|
Stock | 4,800 | |
| Z | 6,000 | 27,000 | Plant and Machinery | 5,100 | |
|
|
Land and Building | 15,000 | |||
|
|
|
Y's Loan |
20,000 |
||
|
51,140 |
51,140 |
||||
Y retired on 1st April, 2019 after giving due notice. Following adjustments in the books of the firm were agreed:
(a) Land and Building be appreciated by 10%.
(b) Provision for Doubtful Debts is no longer necessary since all the debtors are good.
(c) Stock be appreciated by 20%.
(d) Adjustment be made in the accounts to rectify a mistake previously committed whereby Y was credited in excess by ₹ 810, while X and Z were debited in excess of ₹ 420 and ₹ 390 respectively.
(e) Goodwill of the firm be valued at ₹ 5,400 and Y's share of the same be adjusted to that of X and Z who were going to share in the ratio of 2 : 1.
(f) It was decide by X and Y to settle Y's account immediately on his retirement.
Prepare: (i) Revaluation Account; (ii) Partner's Capital Accounts and (iii) Balance Sheet of the firm after Y's retirement.
A, B and C are partners sharing profits and losses in the ratio of 4 : 3 : 3. Their Balance Sheet as at 31st March, 2019 is:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
7,000 |
Land and Building | 36,000 | ||
| Bills Payable | 3,000 | Plant and Machinery | 28,000 | ||
| Reserves | 20,000 | Computer Printer | 8,000 | ||
| Capital A/cs: | Stock | 20,000 | |||
| A | 32,000 |
|
Sundry Debtors |
14,000 |
|
| B | 24,000 |
|
Less: Provision for Doubtful Debts |
2,000 |
12,000 |
| C | 20,000 | 76,000 | Bank | 2,000 | |
|
1,06,000 |
1,06,000 |
||||
On 1st April, 2019, B retired from the firm on the following terms:
(a) Goodwill of the firm is to be valued at ₹ 14,000.
(b) Stock, Land and Building are to be appreciated by 10%.
(c) Plant and Machinery and Computer Printer are to be reduced by 10%.
(d) Sundry Debtors are considered to be good.
(e) There is a liability of ₹ 2,000 for the payment of outstanding salary to the employees of the firm. This liability was not provided in the Balance Sheet but the same is to be recorded now.
(f) Amount payable to B is to be transferred to his Loan Account.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of A and C after B's retirement.
Following is the Balance Sheet of X, Y and Z as at 31st March, 2019. They shared profits in the ratio of 3 : 3 : 2:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Sundry Creditors |
2,50,000 |
Cash at Bank | 50,000 | ||
| General Reserve | 80,000 | Bills Receivable | 60,000 | ||
| Partners' Loan A/cs: |
|
Debtors |
80,000 |
|
|
| X |
50,000 |
Less: Provision for Doubtful Debts |
4,000 |
76,000 |
|
| Y | 40,000 | Stock | 1,24,000 | ||
| Capital A/cs: | Fixed Assets | 3,00,000 | |||
| X | 1,00,000 | Advertisement Suspense A/c | 16,000 | ||
| Y |
60,000 |
|
Profit and Loss A/c | 4,000 | |
| Z |
50,000 |
2,10,000 |
|
||
|
6,30,000 |
6,30,000 |
||||
On 1st April, 2019, Y decided to retire from the firm on the following terms:
(a) Stock to be reduced by ₹ 12,000.
(b) Advertisement Suspense Account to be written off.
(c) Provision for Doubtful Debts to be increased to ₹ 6,000.
(d) Fixed Assets be appreciated by 10%.
(e) Goodwill of the firm, valued at ₹ 80,000 and the amount due to the retiring partners be adjusted in X's and Z's Capital Accounts.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet to give effect to the above.
X, Y and Z are partners sharing profits in the ratio of 5 : 3 : 2. Y retires on 1st April, 2019 from the firm, on which date capitals of X, Y and Z after all adjustments are ₹ 1,03,680, ₹ 87,840 and ₹ 26,880 respectively. The Cash and Bank Balance on that date was ₹ 9,600. Y is to be paid through amount brought in by X and Z in such a way as to make their capitals proportionate to their new profit-sharing ratio which will be X 3/5 and Z 2/5. Calculate the amount to be paid or to be brought in by the continuing partners assuming that a minimum Cash and Bank balance of ₹ 7,200 was to be maintained and pass the necessary Journal entries.
Kumar, Verma and Naresh were partners in a firm sharing Profit and Loss in the ratio of 3 : 2 : 2. On 23rd January, 2015 Verma died. Verma's share of profit till the date of his death was calculated at ₹ 2,350. Pass necessary Journal entry for the same in the books of the firm.
A, B and C were partners sharing profits and losses in the ratio of 2 : 2 : 1. C died on 30th June, 2018. Profit and Sales for the year ended 31st March, 2018 were ₹ 1,00,000 and ₹ 10,00,000 respectively. Sales during April to June, 2018 were ₹ 1,50,000. You are required to calculate share of profit of C up to the date of his death.
A, B and C are partners sharing profits and losses in the ratio of 3 : 2 : 1. B died on 30th June, 2018. For the year ended 31st March, 2019, proportionate profit of 2018 is to be taken into consideration. During the year ended 31st March, 2018, bad debts of ₹ 2,000 had to be adjusted. Profit for the year ended 31st March, 2018 was ₹ 14,000 before adjustment of bad debts. Calculate B's share of profit till the date of his death.
X, Y and Z were partners in a firm Z died on 31st May, 2021. His share of profit from the closure of the last accounting year till the date of death was to be calculated on the basis of the average of three completed years of profits before death. Profits for the years ended 31st March, 2019, 2020 and 2021 were ₹18,000 ₹ 19,000 and ₹ 17,000 respectively. Calculate Z's share of profit till his death and pass necessary Journal entry for the same when:
(a) Profit-sharing ratio of remaining partners does not change, and
(b) Profit-sharing ratio of remaining partners changes and new ratio being 3:2.
X and Y are partners. The Partnership Deed provides inter alia:
(a) That the Accounts be balanced on 31st March every year.
(b) That the profits be divided as: X one-half, Y one-third and carried to a Reserve one-sixth.
(c) That in the event of the death of a partner, his Executors be entitled to be paid:
(i) The Capital to his credit till the date of death.
(ii) His proportion of profits till the date of death based on the average profits of the last three completed years.
(iii) By way of Goodwill, his proportion of the total profits for the three preceding years.
(d)
| BALANCE SHEET as at 31st March, 2019 | |||||
| Liabilities | ₹ | Assets | ₹ | ||
| Capital A/cs: | Sundry Assets | 21,000 | |||
| X | 9,000 | ||||
| Y | 6,000 | 15,000 | |||
| Reserve | 3,000 | ||||
| Creditors | 3,000 | ||||
| 21,000 | 21,000 | ||||
Profits for three years were: 2016-17 − ₹ 4,200; 2017-18 − ₹ 3,900; 2018-19 − ₹ 4,500. Y died on 1st August, 2019. Prepare necessary accounts.
Vikas, Gagan and Momita were partners in a firm sharing profits in the ratio of 2 : 2 : 1. The firm closes its books on 31st March every year. On 30th September, 2014 Momita died. According to the provisions of Partnership Deed the legal representatives of a deceased partner are entitled for the following in the event of his/her death:
(a) Capital as per the last Balance Sheet.
(b) Interest on capital at 6% per annum till the date of her death.
(c) Her share of profit to the date of death calculated on the basis of average profit of last four years.
(d) Her share of goodwill to be determined on the basis of three years' purchase of the average profit of last four years. The profits of last four years were:
| Year | 2010-11 | 2011-12 | 2012-13 | 2013-14 |
| Profit (₹ ) | 30,000 | 50,000 | 40,000 | 60,000 |
The balance in Momita's Capital Account on 31st March, 2014 was ₹ 60,000 and she had withdrawn ₹ 10,000 till date of her death. Interest on her drawings was ₹ 300.
Prepare Momita's Capital Account to be presented to her executors.
Iqbal and Kapoor are in partnership sharing profits and losses in 3 : 2. Kapoor 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. Kapoor's capital as per Balance Sheet was ₹ 40,000 and his drawings till the date of death were ₹ 5,000.
Draw Kapoor's Capital Account to be rendered to his representatives.
Babita, Chetan and David are partners in a firm sharing profits in the ratio of 2 : 1 : 1 respectively. Firm closes its accounts on 31st March every year. Chetan died on 30th September, 2012. There was a balance of ₹ 1,25,000 in Chetan's Capital Account in the beginning of the year. In the event of death of any partner, the Partnership Deed provides for the following:
(a) Interest on capital will be calculated at the rate of 6% p.a.
(b) The executor of deceased partner shall be paid ₹ 24,000 for his share of goodwill.
(c) His share of Reserve Fund of ₹ 12,000, shall be paid to his executor.
(d) His share of profit till the date of death will be calculated on the basis of sales. It is also specified that the sales during the year 2011-12 were ₹ 4,00,000. The sales from 1st April, 2012 to 30th September, 2012 were ₹ 1,20,000. The profit of the firm for the year ending 31st March, 2012 was ₹ 2,00,000.
Prepare Chetan's Capital Account to be presented to his executor.
A and B are partners sharing profits and losses in the proportion of 7 : 5. They agree to admit C, their manager, into partnership who is to get 1/6th share in the profits. He acquires this share as 1/24th from A and 1/8th from B. Calculate new profit-sharing ratio.
X, Y and Z were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 31st March, 2018, their Balance Sheet was as follows:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Trade Creditors |
1,20,000 |
Cash at Bank |
1,80,000 |
||
|
Bills Payable |
80,000 |
Stock |
1,40,000 |
||
|
General Reserve |
60,000 |
Sundry Debtors | 80,000 | ||
|
Capital A/cs: |
Building | 3,00,000 | |||
| X |
7,00,000 |
Advance to Y | 7,00,000 | ||
| Y | 7,00,000 | Profit and Loss A/c | 3,20,000 | ||
| Z |
60,000 |
14,60,000 |
|||
|
17,20,000 |
17,20,000 |
||||
Y died on 30th June, 2018. The Partnership Deed provided for the following on the death of a partner:
(i) Goodwill of the business was to be calculated on the basis of 2 times the average profit of the past 5 years. Profits for the years ended 31st March, 2018, 31st March, 2017, 31st March, 2016, 31st March, 2015 and 31st March, 2014 were ₹ 3,20,000 (Loss); ₹ 1,00,000; ₹ 1,60,000; ₹ 2,20,000 and ₹ 4,40,000 respectively.
(ii) Y's share of profit or loss from 1st April, 2018 till his death was to be calculated on the basis of the profit or loss for the year ended 31st March, 2018.
You are required to calculate the following:
(a) Goodwill of the firm and Y's share of goodwill at the time of his death.
(b) Y's share in the profit or loss of the firm till the date of his death.
(c) Prepare Y's Capital Account at the time of his death to be presented to his executors.
Find New Profit-sharing Ratio:
A and B are partners sharing profits and losses in the ratio of 3 : 2. They admit C for 1/5th share in the profit. C acquires 1/5th of his share from A and 4/5th share from B.
Mandeep, Vinod and Abbas are partners sharing profits and losses in the ratio of 3 : 2 : 1. From 1st April, 2019 they decided to share profits equally. The Partnership Deed provides that in the event of any change in profit-sharing ratio, goodwill shall be valued at three years' purchase of average profit of last five years. The profits and losses of past five years are:
Profit − Year ended 31st March, 2015 − ₹ 1,00,000; 2016 − ₹ 1,50,000; 2018 − ₹ 2,00,000; 2019 − ₹ 2,00,000.
Loss − Year ended 31st March, 2017 − ₹ 50,000.
Pass the Journal entry showing the working.
X, Y and Z are sharing profits and losses in the ratio of 5 : 3 : 2. They decide to share future profits and losses in the ratio of 2 : 3 : 5 with effect from 1st April, 2019. They also decide to record the effect of the following accumulated profits, losses and reserves without affecting their book values by passing a single entry .
| Book Values (₹) | |
| General Reserve | 6,000 |
| Profit and Loss A/c (Credit) | 24,000 |
| Advertisement Suspense A/c | 12,000 |
Pass an Adjustment Entry.
X, Y and Z who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5. Give the journal entry to distribute 'Workmen Compensation Reserve' of ₹ 1,20,000 at the time of change in profit-sharing ratio, when there is a claim of ₹ 80,000 against it.
X, Y and Z are partners sharing profits and losses in the ratio of 7 : 5 : 4. Their Balance Sheet as at 31st March, 2019 stood as:
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Capital A/cs: | Sundry Assets | 7,00,000 | ||
| X | 2,10,000 | |||
| Y | 1,50,000 | |||
| Z | 1,20,000 | 4,80,000 | ||
| General Reserve | 65,000 | |||
| Profit and Loss A/c | 25,000 | |||
| Creditors | 1,30,000 | |||
| 7,00,000 | 7,00,000 | |||
Partners decided that with effect from 1st April, 2019, they will share profits and losses in the ratio of 3 : 2 : 1. For this purpose, goodwill of the firm was valued at ₹ 1,50,000. The partners neither want to record the goodwill nor want to distribute the General Reserve and profits.
Pass a Journal entry to record the change and prepare Balance Sheet of the constituted firm.
The incoming partner cannot acquire his share of profits:
At the time of retirement, the amount remaining in Investment Fluctuation Reserve after meeting the fall in the value of Investments is:
A, B and C are three partners sharing profit and loss in the ratio of 3:2:1. B retires from the firm. Suppose A and C purchase the share of retiring partners equally. What is the new profit sharing ratio?
A, B, C and D were partners in a firm sharing profits and losses in the ratio of 1 : 2 : 3 : 4. On 31.3.2022, C retired from the firm and his share was acquired by A and B in the ratio of 3 : 2. Calculate the new profit sharing ratio of A, B and D.
A & B are partners sharing profits and losses in the ratio of 3 : 2. C is admitted for ¼ and for which ₹ 30,000 and ₹ 10,000 are credited as a premium for goodwill to A and B respectively. The new profit sharing ratio of A : B : C will be ______.
