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Question
X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2. Z is admitted as partner with 1/4 share in profit. Z acquires his share from X and Y in the ratio of 2 : 1. Calculate new profit-sharing ratio.
Solution
Old Profit Sharing Ratio amongst Partners (X and Y) is 3 : 2
Z is admitted for `1/4`th Share in Profits
Sacrificing Ratio of X and Y is 2 : 1
Z acquired = `2/3 xx 1/4 = 2/12` - (From X)
Z acquired = `1/3 xx 1/4 = 1/12` - (From Y)
New Ratio = Old Ratio - Sacrificing Ratio
X's new share = `3/5 - 2/12 = [ 36 - 10 ]/60 = 26/60`
Y's new share = `2/5 - 1/12 = [ 24 - 5 ]/60 = 19/60`
Z's share = `1/4 = 15/60`
∴ New Ratio = 26 : 19 : 15
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
||
|
Trade creditors |
53,000 | Bank | 60,000 | ||
| Employees' Provident Fund | 47,000 | Debtors | 60,000 | ||
| Kanika's Capital | 2,00,000 | Stock | 1,00,000 | ||
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| Kabir's Capital | 80,000 | Profit and Loss A/c | 20,000 | ||
| 4,80,000 | 4,80,000 | ||||
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Trade Creditors | 30,000 | Cash in Hand | 15,000 | |
| Bills Payable | 45,000 | Cash at Bank | 75,000 | |
| Expenses Owing | 45,000 | Debtors | 1,50,000 | |
| General Reserve | 1,35,000 | Stock | 1,20,000 | |
| Capital A/cs: | Factory Premises | 2,25,000 | ||
|
X |
1,50,000 | Machinery | 80,000 | |
|
Y |
1,50,000 | Loose Tools | 40,000 | |
|
Z |
1,50,000 | 4,50,000 | ||
| 7,05,000 | 7,05,000 | |||
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
7,000 |
Land and Building | 36,000 | ||
| Bills Payable | 3,000 | Plant and Machinery | 28,000 | ||
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| 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 |
||||
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
42,000 |
Land and Building | 1,24,000 | ||
| Investment Fluctuation Fund | 20,000 | Motor Vans | 40,000 | ||
| Profit and Loss Account | 80,000 | Investments | 38,000 | ||
| Capital A/cs: J | 1,00,000 | Machinery | 24,000 | ||
| H | 80,000 | Stock |
|
30,000 |
|
| K | 40,000 |
2,20,000 |
Debtors | 80,000 |
|
| Less: Provision |
6,000 |
74,000 |
|||
|
|
|
Cash |
32,000 |
||
|
3,62,000 |
3,62,000 |
||||
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Bills Payable |
12,000 |
Freehold Premises | 40,000 | ||
| Sundry Creditors | 28,000 | Machinery | 30,000 | ||
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| X | 30,000 | Sundry Debtors |
20,000 |
|
|
| Y | 20,000 | Less: Provision for Doubtful Debts |
1,000 |
19,000 |
|
| Z | 28,000 |
78,000 |
Cash |
7,000 |
|
|
1,30,000 |
1,30,000 |
||||
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(a) Determine the amount that should be credited to R in respect of his share of Goodwill.
(b) Pass Journal entry without raising Goodwill Account for its adjustment.
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.
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| Year | 2015-16 | 2016-17 | 2017-18 | 2018-19 |
| Profit (₹) | 1,50,000 | 1,00,000 | 50,000 |
1,00,000
|
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Sundry Creditors |
2,70,000 |
Cash in Hand |
42,500 |
||
|
General Reserve |
1,20,000 |
Cash at Bank |
2,14,500 |
||
|
Capital A/cs: |
Debtors | 1,63,000 | |||
| A |
2,00,000 |
Stock | 17,500 | ||
| B | 1,20,000 | Investment | 1,32,500 | ||
| C |
80,000 |
4,00,000 |
Building | 2,10,000 | |
| B's Loan | 10,000 | ||||
|
7,90,000 |
7,90,000 |
||||
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(a) Interest on capital will be calculated at the rate of 6% p.a.
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
||
| Sundry Creditors | 18,000 | Goodwill | 12,000 | ||
| Investments Fluctuation Reserve | 7,000 | Patents | 52,000 | ||
| Workmen Compensation Reserve | 7,000 | Machinery | 62,400 | ||
| Capital A/cs: | Investment | 6,000 | |||
| X | 1,35,000 | Stock | 20,000 | ||
| Y | 95,000 | Sundry Debtors | 24,000 | ||
|
Z |
74,000 | 3,04,000 | Less: Provision for Doubtful Debts | 4,000 | 20,000 |
| Loan to Z | 1,000 | ||||
| Cash at Bank | 600 | ||||
| Profit and Loss A/c | 1,50,000 | ||||
| Z's Drawings | 12,000 | ||||
| 3,36,000 | 3,36,000 | ||||
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(ii) Stock is undervalued by ₹ 14,000 and machinery is overvalued by ₹ 13,600.
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|
Liabilities |
Amount |
Assets |
Amount |
|
| Sundry Creditors | 75,000 | Cash in Hand | 24,000 | |
| General Reserve | 90,000 | Cash at Bank | 1,40,000 | |
| Capital A/cs: | Sundry Debtors |
80,000 |
||
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3,00,000 |
Stock | 1,40,000 | |
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Sundry Creditors | 40,000 | Cash at Bank | 40,000 | |
| Outstanding Expenses | 15,000 | Sundry Debtors | 2,10,000 | |
| General Reserve | 75,000 | Stock | 3,00,000 | |
| Capital A/cs: | Furniture | 60,000 | ||
| X | 4,00,000 | Plant and Machinery | 4,20,000 | |
| Y | 3,00,000 | |||
| Z | 2,00,000 | 9,00,000 | ||
| 10,30,000 | 10,30,000 | |||
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(a) Furniture be taken at 80% of its value.
(b) Stock be appreciated by 20%.
(c) Plant and Machinery be valued at ₹ 4,00,000.
(d) Outstanding Expenses be increased by ₹ 13,000.
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
| X's Capital | 52,000 | Goodwill | 8,000 |
| Y's Capital | 54,000 | Machinery | 38,000 |
| General Reserve | 4,800 | Furniture | 15,000 |
| Sundry Creditors | 5,000 | Sundry Debtors | 33,000 |
| Employees' Provident Fund | 1,000 | Stock | 7,000 |
| Workmen Compensation Reserve | 10,000 | Bank | 25,000 |
| Advertisement Suspense A/c | 800 | ||
| 1,26,800 | 1,26,800 |
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BALANCE SHEET OF SURESH, RAMESH, MAHESH AND Ganesh
as on 1st April, 2016
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Capital A/cs: | Fixed Assets | 6,00,000 | ||
| Suresh | 1,00,000 | Current Assets | 3,45,000 | |
| Ramesh | 1,50,000 | |||
| Mahesh | 2,00,000 | |||
| Ganesh | 2,50,000 | 7,00,000 | ||
| Sundry Creditors | 1,70,000 | |||
| Workmen Compensation Reserve | 75,000 | |||
| 9,45,000 | 9,45,000 | |||
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