Class 15 Ts Grewal I (2014) Solutions for Class 12 Commerce Accountancy Chapter 5 Retirement/Death Of A Partner are provided here with simple step-by-step explanations. These solutions for Retirement/Death Of A Partner are extremely popular among class 12 Commerce students for Accountancy Retirement/Death Of A Partner Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the Class 15 Ts Grewal I (2014) Book of class 12 Commerce Accountancy Chapter 5 are provided here for you for free. You will also love the ad-free experience on Meritnation’s Class 15 Ts Grewal I (2014) Solutions. All Class 15 Ts Grewal I (2014) Solutions for class 12 Commerce Accountancy are prepared by experts and are 100% accurate.
Page No 5.76:
Question 1:
Answer:
Old Ratio (A, B and C) = or 5 : 4 : 1
As we can see, no information is given as to how A and B are acquiring C's profit share after his retirement, so the new profit sharing ratio between A and B is calculated just by crossing out the C’s share. That is, the new ratio becomes 5 : 4.
∴New Profit Ratio (A and B) = 5 : 4
Page No 5.76:
Question 2:
Old Ratio (A, B and C) = or 5 : 4 : 1
As we can see, no information is given as to how A and B are acquiring C's profit share after his retirement, so the new profit sharing ratio between A and B is calculated just by crossing out the C’s share. That is, the new ratio becomes 5 : 4.
∴New Profit Ratio (A and B) = 5 : 4
Answer:
Old Ratio (Ram, Mohan and Sohan) = or 3 : 5 : 7
Sohan’s Profit Share =
Ram and Mohan decided to take his share in the ratio of 3 : 2
New Profit Share = Old Profit Share + Share taken from Sohan
∴ New Profit Ratio (Ram and Mohan) = 36 : 39 or 12 : 13
Page No 5.76:
Question 3:
Old Ratio (Ram, Mohan and Sohan) = or 3 : 5 : 7
Sohan’s Profit Share =
Ram and Mohan decided to take his share in the ratio of 3 : 2
New Profit Share = Old Profit Share + Share taken from Sohan
∴ New Profit Ratio (Ram and Mohan) = 36 : 39 or 12 : 13
Answer:
(a)
Old Ratio (Shiv, Mohan and Hari) = 5 : 5 : 4
Mohan’s Profit Share =
His share is divided between Shiv and Hari equally i.e. in the ratio of 1: 1
New Profit Share = Old Profit Share + Share taken from Mohan
∴ New Profit Ratio (Shiv and Hari) = 15 : 13
(b)
Old Ratio (P, Q and R) = 5 : 4 : 1
P’s Profit Share =
As we can see, no information is given as to how Q and R are acquiring P's profit share after his retirement, so the new profit sharing ratio between Q and R is calculated just by crossing out the P’s share. That is, the new ratio becomes 4 : 1
∴New Profit Ratio (Q and R) = 4 : 1
Page No 5.76:
Question 4:
(a)
Old Ratio (Shiv, Mohan and Hari) = 5 : 5 : 4
Mohan’s Profit Share =
His share is divided between Shiv and Hari equally i.e. in the ratio of 1: 1
New Profit Share = Old Profit Share + Share taken from Mohan
∴ New Profit Ratio (Shiv and Hari) = 15 : 13
(b)
Old Ratio (P, Q and R) = 5 : 4 : 1
P’s Profit Share =
As we can see, no information is given as to how Q and R are acquiring P's profit share after his retirement, so the new profit sharing ratio between Q and R is calculated just by crossing out the P’s share. That is, the new ratio becomes 4 : 1
∴New Profit Ratio (Q and R) = 4 : 1
Answer:
Old Ratio (A, B and C) = 4 : 3 : 2
New Ratio (B and C) = 2 : 1
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio = 3 : 1
Page No 5.76:
Question 5:
Old Ratio (A, B and C) = 4 : 3 : 2
New Ratio (B and C) = 2 : 1
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio = 3 : 1
Answer:
Old Ratio (Kangli, Mangli and Sanvali) = 4 : 3 : 2
New Ratio (Mangli and Sanvali) = 5 : 3
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio = 21 : 11
Page No 5.76:
Question 6:
Old Ratio (Kangli, Mangli and Sanvali) = 4 : 3 : 2
New Ratio (Mangli and Sanvali) = 5 : 3
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio = 21 : 11
Answer:
(a)
Old Ratio (W, X, Y and Z) = or 2 : 1 : 2 : 1
New Ratio (W, X and Z) = 1 : 1 : 1
Gaining Ratio = New Ratio − Old Ratio
∴Gaining Ratio = 0 : 1 : 1
(b)
Old Ratio (A, B and C) = 4 : 3 : 2
C’s Profit Share =
A acquires 4/9 of C’s Share and remaining share is acquired by B.
New Profit Share = Old Profit Share + Share acquired from C
∴ New Profit Ratio (A and B) = 44 : 37
Gaining Ratio = New Ratio − Old Ratio
∴Gaining Ratio = 8 : 10 or 4 : 5
Page No 5.76:
Question 7:
(a)
Old Ratio (W, X, Y and Z) = or 2 : 1 : 2 : 1
New Ratio (W, X and Z) = 1 : 1 : 1
Gaining Ratio = New Ratio − Old Ratio
∴Gaining Ratio = 0 : 1 : 1
(b)
Old Ratio (A, B and C) = 4 : 3 : 2
C’s Profit Share =
A acquires 4/9 of C’s Share and remaining share is acquired by B.
New Profit Share = Old Profit Share + Share acquired from C
∴ New Profit Ratio (A and B) = 44 : 37
Gaining Ratio = New Ratio − Old Ratio
∴Gaining Ratio = 8 : 10 or 4 : 5
Answer:
Old Ratio (Sita, Geeta and Meeta) = 7 : 6 : 7
Geeta’s Profit Share =
Her share is divided between Sita and Meeta equally i.e. in the ratio of 1: 1
New Profit Share = Old Profit Share + Share taken from Geeta
∴ New Profit Ratio (Sita and Meeta) = 20 : 20 or 1 : 1
Page No 5.76:
Question 8:
Old Ratio (Sita, Geeta and Meeta) = 7 : 6 : 7
Geeta’s Profit Share =
Her share is divided between Sita and Meeta equally i.e. in the ratio of 1: 1
New Profit Share = Old Profit Share + Share taken from Geeta
∴ New Profit Ratio (Sita and Meeta) = 20 : 20 or 1 : 1
Answer:
Old Ratio (A, B, C and D) = 5 : 3 : 2 : 2
B’s Profit Share =
C’s Profit Share =
B’s Share was acquired by D and C’s share was acquired by A.
∴D’s New Share = D’s Old share + Share of B
A’s New Share = A’s Old Share + Share of C
∴ New Profit Ratio (A and D) = 7 : 5
Page No 5.76:
Question 9:
Old Ratio (A, B, C and D) = 5 : 3 : 2 : 2
B’s Profit Share =
C’s Profit Share =
B’s Share was acquired by D and C’s share was acquired by A.
∴D’s New Share = D’s Old share + Share of B
A’s New Share = A’s Old Share + Share of C
∴ New Profit Ratio (A and D) = 7 : 5
Answer:
Old Ratio (A, B and C) = 4 : 3 : 2
B retires from the firm.
His profit share =
Case (a) B gives his share to A and C in their original ratio.
Original Share (A and C) = 4 : 2
New Ratio = Old Ratio + Share acquired from B
∴ New Profit Ratio (A and C) = 36 : 18 or 2 : 1
Case (b) B gives his share to A and C in equal proportion.
New Ratio = Old Ratio + Share acquired from B
∴ New Profit Ratio (A and C) = 11 : 7
Case (c) B gives his to A and C in the ratio 3 : 1.
New Ratio = Old Ratio + Share acquired from B
∴ New Profit Ratio (A and C) = 25 : 11
Case (d) B gives his share to A only.
A’s New Share = A’s Old Share + Share of B
C’s Share
∴ New Profit Ratio (A and C) = 7 : 2
Page No 5.77:
Question 10:
Old Ratio (A, B and C) = 4 : 3 : 2
B retires from the firm.
His profit share =
Case (a) B gives his share to A and C in their original ratio.
Original Share (A and C) = 4 : 2
New Ratio = Old Ratio + Share acquired from B
∴ New Profit Ratio (A and C) = 36 : 18 or 2 : 1
Case (b) B gives his share to A and C in equal proportion.
New Ratio = Old Ratio + Share acquired from B
∴ New Profit Ratio (A and C) = 11 : 7
Case (c) B gives his to A and C in the ratio 3 : 1.
New Ratio = Old Ratio + Share acquired from B
∴ New Profit Ratio (A and C) = 25 : 11
Case (d) B gives his share to A only.
A’s New Share = A’s Old Share + Share of B
C’s Share
∴ New Profit Ratio (A and C) = 7 : 2
Answer:
Old Profit Sharing Ratio amongst Partner’s (A, B and C) - 5 : 3 : 2
B retires and his share was taken by A and C in ratio of 2 : 1
Gaining Ratio of A and C is 2 : 1
New Ratio between A and C is 21 : 9 or 7 : 3
After this D is admitted for 25% share
Half of this 25% was gifted by A and remaining half was provided by A and C equally
It means 75% (50% + ½ of remaining 50%) of 25% (given to D) was actually given by A and rest 25% was given by C.
Page No 5.77:
Question 11:
Old Profit Sharing Ratio amongst Partner’s (A, B and C) - 5 : 3 : 2
B retires and his share was taken by A and C in ratio of 2 : 1
Gaining Ratio of A and C is 2 : 1
New Ratio between A and C is 21 : 9 or 7 : 3
After this D is admitted for 25% share
Half of this 25% was gifted by A and remaining half was provided by A and C equally
It means 75% (50% + ½ of remaining 50%) of 25% (given to D) was actually given by A and rest 25% was given by C.
Answer:
Journal |
||||
Particulars |
L.F. |
Date Amount Rs |
Credit amount Rs |
|
L’s Capital A/c |
Dr. |
|
13,000 |
|
O’s Capital A/c |
Dr. |
|
11,000 |
|
To M’s Capital A/c |
|
|
24,000 |
|
(Adjustment M’s share of goodwill made) |
|
|
|
|
|
|
|
|
Working Note:
WN 1 Calculation of Gaining Ratio
Old Ratio (L, M and O) = 4 : 3 : 2
M retires from the firm.
New Ratio (L and O) = 5 : 3
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio = 13 : 11
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 72,000
This share of goodwill is to be debited to remaining Partners’ Capital Accounts in their gaining ratio (i.e. 13 : 11).
Page No 5.77:
Question 12:
Journal |
||||
Particulars |
L.F. |
Date Amount Rs |
Credit amount Rs |
|
L’s Capital A/c |
Dr. |
|
13,000 |
|
O’s Capital A/c |
Dr. |
|
11,000 |
|
To M’s Capital A/c |
|
|
24,000 |
|
(Adjustment M’s share of goodwill made) |
|
|
|
|
|
|
|
|
Working Note:
WN 1 Calculation of Gaining Ratio
Old Ratio (L, M and O) = 4 : 3 : 2
M retires from the firm.
New Ratio (L and O) = 5 : 3
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio = 13 : 11
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 72,000
This share of goodwill is to be debited to remaining Partners’ Capital Accounts in their gaining ratio (i.e. 13 : 11).
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
R’s Capital A/c |
Dr. |
|
10,000 |
|
To Q’s Capital A/c |
|
|
10,000 |
|
(Adjustment of Q’s share of goodwill is made) |
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (P, Q and R) = 2 : 1 : 1
Q retires from the firm.
New Ratio (P and R) = 1 : 1
Gaining RatioNew Ratio − Old Ratio
Here, only R is gaining.
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 40,000
Q’s share of goodwill
This share of goodwill is to be debited to R’s Capital Account.
Page No 5.77:
Question 13:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
R’s Capital A/c |
Dr. |
|
10,000 |
|
To Q’s Capital A/c |
|
|
10,000 |
|
(Adjustment of Q’s share of goodwill is made) |
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (P, Q and R) = 2 : 1 : 1
Q retires from the firm.
New Ratio (P and R) = 1 : 1
Gaining RatioNew Ratio − Old Ratio
Here, only R is gaining.
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 40,000
Q’s share of goodwill
This share of goodwill is to be debited to R’s Capital Account.
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
A’s Capital A/c |
Dr. |
|
1,950 |
|
C’s Capital A/c |
Dr. |
|
1,650 |
|
To B’s Capital A/c |
|
|
3,600 |
|
(Adjustment B’s share of goodwill made) |
|
|
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (A, B and C) = 4 : 3 : 2
B retires from the firm.
New Ratio (A and C) = 5 : 3
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio = 13 : 11
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 10,800
This share of goodwill is to be debited to remaining Partners’ Capital Accounts in their gaining ratio (i.e. 13 : 11).
Page No 5.77:
Question 14:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
A’s Capital A/c |
Dr. |
|
1,950 |
|
C’s Capital A/c |
Dr. |
|
1,650 |
|
To B’s Capital A/c |
|
|
3,600 |
|
(Adjustment B’s share of goodwill made) |
|
|
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (A, B and C) = 4 : 3 : 2
B retires from the firm.
New Ratio (A and C) = 5 : 3
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio = 13 : 11
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 10,800
This share of goodwill is to be debited to remaining Partners’ Capital Accounts in their gaining ratio (i.e. 13 : 11).
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
A’s Capital A/c |
Dr. |
|
15,000 |
|
C’s Capital A/c |
Dr. |
|
15,000 |
|
To B’s Capital A/s |
|
|
30,000 |
|
(Adjustment B’s share of goodwill made) |
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (A, B and C) = 3 : 2 : 1
B retires from the firm.
New Ratio (A and C) = 2 : 1
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio = 1 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 90,000
B’s share of goodwill
This share of goodwill is to be debited to remaining Partners’ Capital Accounts in their gaining ratio (i.e. 1 : 1).
Page No 5.77:
Question 15:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
A’s Capital A/c |
Dr. |
|
15,000 |
|
C’s Capital A/c |
Dr. |
|
15,000 |
|
To B’s Capital A/s |
|
|
30,000 |
|
(Adjustment B’s share of goodwill made) |
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (A, B and C) = 3 : 2 : 1
B retires from the firm.
New Ratio (A and C) = 2 : 1
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio = 1 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 90,000
B’s share of goodwill
This share of goodwill is to be debited to remaining Partners’ Capital Accounts in their gaining ratio (i.e. 1 : 1).
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Naresh’s Capital A/c |
Dr. |
|
15,000 |
|
Yogesh’s Capital A/c |
Dr. |
|
15,000 |
|
To Mukesh’s Capital A/c |
|
|
30,000 |
|
(Adjustment Mukesh’s share of goodwill made) |
|
|
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio = 2 : 2 : 1 : 1
Mukesh retires from the firm.
New Ratio = 1 : 1 : 1
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio (Naresh and Yogesh) = 1 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 90,000
Mukesh’s share of goodwill
This share of goodwill is to be debited to remaining Partners’ Capital Accounts in their gaining ratio (i.e. 1 : 1).
Page No 5.77:
Question 16:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Naresh’s Capital A/c |
Dr. |
|
15,000 |
|
Yogesh’s Capital A/c |
Dr. |
|
15,000 |
|
To Mukesh’s Capital A/c |
|
|
30,000 |
|
(Adjustment Mukesh’s share of goodwill made) |
|
|
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio = 2 : 2 : 1 : 1
Mukesh retires from the firm.
New Ratio = 1 : 1 : 1
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio (Naresh and Yogesh) = 1 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 90,000
Mukesh’s share of goodwill
This share of goodwill is to be debited to remaining Partners’ Capital Accounts in their gaining ratio (i.e. 1 : 1).
Answer:
Journal |
|
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
||
|
A’s Capital A/c |
Dr. |
|
5,850 |
|
|
|
C’s Capital A/c |
Dr. |
|
4,950 |
|
|
|
To B’s Capital A/c |
|
|
|
10,800 |
|
|
(Adjustment of B’s share of goodwill) |
|
|
|
|
Working Notes
- Calculation of B’s share of goodwill
A, B and C are sharing profits in ratio 4/9 : 3/9 : 2/9
B retires from the firm. Remaining partners agreed to pay him Rs 1,50,000
B’s capital after making necessary adjustments Rs 1,39,200
Therefore, Hidden Goodwill is Rs (1,50,000 – 1,39,200) i.e. Rs 10,800
ii Gaining Ratio
New profit sharing ratio between A and B is 5:3
Thus, B’s share of goodwill will be brought in by A and C in the gaining ratio 13:11 i.e.
Page No 5.77:
Question 17:
Journal |
|
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
||
|
A’s Capital A/c |
Dr. |
|
5,850 |
|
|
|
C’s Capital A/c |
Dr. |
|
4,950 |
|
|
|
To B’s Capital A/c |
|
|
|
10,800 |
|
|
(Adjustment of B’s share of goodwill) |
|
|
|
|
Working Notes
- Calculation of B’s share of goodwill
A, B and C are sharing profits in ratio 4/9 : 3/9 : 2/9
B retires from the firm. Remaining partners agreed to pay him Rs 1,50,000
B’s capital after making necessary adjustments Rs 1,39,200
Therefore, Hidden Goodwill is Rs (1,50,000 – 1,39,200) i.e. Rs 10,800
ii Gaining Ratio
New profit sharing ratio between A and B is 5:3
Thus, B’s share of goodwill will be brought in by A and C in the gaining ratio 13:11 i.e.
Answer:
Revaluation Account |
||||||
Dr. |
|
Cr. |
||||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|||
Plant and Machinery (40,000 × 10%) |
4,000 |
Building (1,00,000 × 20%) |
20,000 |
|||
Provision for Doubtful Debts |
1,000 |
Stock of Finished Goods |
5,000 |
|||
Stock of Raw Materials |
2,000 |
Computer |
2,000 |
|||
Workmen’s Compensation Claim |
5,000 |
|
|
|||
Profit transferred to: |
|
|
|
|||
A’s Capital A/c |
6,000 |
|
|
|
||
B’s Capital A/c |
6,000 |
|
|
|
||
C’s Capital A/c |
3,000 |
15,000 |
|
|
||
|
27,000 |
|
27,000 |
|||
|
|
|
|
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Building A/c |
Dr. |
|
20,000 |
|
Stock of Finished Good A/c |
Dr. |
|
5,000 |
|
Computer A/c |
Dr. |
|
2,000 |
|
To Revaluation A/c |
|
|
27,000 |
|
(Increase in value Assets transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
12,000 |
|
To Plant and Machinery A/c |
|
|
4,000 |
|
To Provision for Doubtful Debts A/c |
|
|
1,000 |
|
To Stock of Raw Material A/c |
|
|
2,000 |
|
To Workmen’s Compensation Claim A/c |
|
|
5,000 |
|
( Decrease in value of Assets and increase in Liabilities transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
15,000 |
|
To A’s Capital A/c |
|
|
6,000 |
|
To B’s Capital A/c |
|
|
6,000 |
|
To C’s Capital A/c |
|
|
3,000 |
|
(Revalution Profit transferred to Partners’ Capital accounts) |
|
|
|
|
|
|
|
|
Page No 5.78:
Question 18:
Revaluation Account |
||||||
Dr. |
|
Cr. |
||||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|||
Plant and Machinery (40,000 × 10%) |
4,000 |
Building (1,00,000 × 20%) |
20,000 |
|||
Provision for Doubtful Debts |
1,000 |
Stock of Finished Goods |
5,000 |
|||
Stock of Raw Materials |
2,000 |
Computer |
2,000 |
|||
Workmen’s Compensation Claim |
5,000 |
|
|
|||
Profit transferred to: |
|
|
|
|||
A’s Capital A/c |
6,000 |
|
|
|
||
B’s Capital A/c |
6,000 |
|
|
|
||
C’s Capital A/c |
3,000 |
15,000 |
|
|
||
|
27,000 |
|
27,000 |
|||
|
|
|
|
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Building A/c |
Dr. |
|
20,000 |
|
Stock of Finished Good A/c |
Dr. |
|
5,000 |
|
Computer A/c |
Dr. |
|
2,000 |
|
To Revaluation A/c |
|
|
27,000 |
|
(Increase in value Assets transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
12,000 |
|
To Plant and Machinery A/c |
|
|
4,000 |
|
To Provision for Doubtful Debts A/c |
|
|
1,000 |
|
To Stock of Raw Material A/c |
|
|
2,000 |
|
To Workmen’s Compensation Claim A/c |
|
|
5,000 |
|
( Decrease in value of Assets and increase in Liabilities transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
15,000 |
|
To A’s Capital A/c |
|
|
6,000 |
|
To B’s Capital A/c |
|
|
6,000 |
|
To C’s Capital A/c |
|
|
3,000 |
|
(Revalution Profit transferred to Partners’ Capital accounts) |
|
|
|
|
|
|
|
|
Answer:
Revaluation of assets and liabilities is made at the time of Ramesh’s retirement and not after his retirement. Therefore, profits on revaluation will be distributed among all the partners in their old profit sharing ratio. In the absence of partnership deed, profits are distributed equally among all the partners.
Therefore, Profit Share of each Partner =
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Revaluation A/c |
Dr. |
|
12000 |
|
To Ramesh’s Capital A/c |
|
|
4000 |
|
To Mohan’s Capital A/c |
|
|
4000 |
|
To Rahul’s Capital A/c |
|
|
4000 |
|
(Revaluation profit distributed among all the partners in their old ratio) |
|
|
|
|
|
|
|
|
Page No 5.78:
Question 19:
Revaluation of assets and liabilities is made at the time of Ramesh’s retirement and not after his retirement. Therefore, profits on revaluation will be distributed among all the partners in their old profit sharing ratio. In the absence of partnership deed, profits are distributed equally among all the partners.
Therefore, Profit Share of each Partner =
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Revaluation A/c |
Dr. |
|
12000 |
|
To Ramesh’s Capital A/c |
|
|
4000 |
|
To Mohan’s Capital A/c |
|
|
4000 |
|
To Rahul’s Capital A/c |
|
|
4000 |
|
(Revaluation profit distributed among all the partners in their old ratio) |
|
|
|
|
|
|
|
|
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount (Rs) |
Credit Amount (Rs) |
|
|
General Reserve A/c |
Dr. |
|
1,80,000 |
|
|
Workmen Compensation Reserve A/c |
Dr. |
|
24,000 |
|
|
To X’s Capital A/c |
|
|
|
1,02,000 |
|
To Y’s Capital A/c |
|
|
|
68,000 |
|
To Z’s Capital A/c |
|
|
|
34,000 |
|
(Accumulated profits distributed among partners in old ratio) |
|
|
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
15,000 |
|
|
Y’s Capital A/c |
Dr. |
|
10,000 |
|
|
Z’s Capital A/c |
Dr. |
|
5,000 |
|
|
To Profit and Loss A/c |
|
|
|
30,000 |
|
(Debit balance in Profit and Loss A/c distributed among partners in old ratio) |
|
|
|
|
|
|
|
|
|
Working Notes:
WN1: Calculation of Share in Credit Balance of Reserves
Total Credit Balance of Reserves = General Reserve + WCF
= 1,80,000 + 24,000 = 2,04,000
WN2: Calculation of Share in Debit Balance of Profit and Loss A/c
Note: Employees’ Provident Fund will not be distributed as it is a liability and not accumulated profit.
Page No 5.78:
Question 20:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount (Rs) |
Credit Amount (Rs) |
|
|
General Reserve A/c |
Dr. |
|
1,80,000 |
|
|
Workmen Compensation Reserve A/c |
Dr. |
|
24,000 |
|
|
To X’s Capital A/c |
|
|
|
1,02,000 |
|
To Y’s Capital A/c |
|
|
|
68,000 |
|
To Z’s Capital A/c |
|
|
|
34,000 |
|
(Accumulated profits distributed among partners in old ratio) |
|
|
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
15,000 |
|
|
Y’s Capital A/c |
Dr. |
|
10,000 |
|
|
Z’s Capital A/c |
Dr. |
|
5,000 |
|
|
To Profit and Loss A/c |
|
|
|
30,000 |
|
(Debit balance in Profit and Loss A/c distributed among partners in old ratio) |
|
|
|
|
|
|
|
|
|
Working Notes:
WN1: Calculation of Share in Credit Balance of Reserves
Total Credit Balance of Reserves = General Reserve + WCF
= 1,80,000 + 24,000 = 2,04,000
WN2: Calculation of Share in Debit Balance of Profit and Loss A/c
Note: Employees’ Provident Fund will not be distributed as it is a liability and not accumulated profit.
Answer:
C’s Capital Account |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||
C’s Loan A/c |
7,700 |
Balance b/d |
6,000 |
||
|
|
C’s Current A/c |
1,700 |
||
|
7,700 |
|
7,700 |
||
|
|
|
|
C’s Current Account |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||
Balance b/d |
500 |
Profit and Loss Suspense A/c (Share of profit) (WN 1) |
550 |
||
C’s Capital A/c (balancing figure) |
1,700 |
D’s Current A/c (Share of goodwill) (WN 2) |
1,650 |
||
|
2,200 |
|
2,200 |
||
|
|
|
|
Working Notes:
WN 1 Calculation of Profit (from April 01, 2014 to Sept. 30, 2014)
WN 2 Calculation of Goodwill
Goodwill = Average Profit × 1.5
= 2,200 × 1.5 = Rs 3,300
C’s Share of Goodwill
Page No 5.78:
Question 21:
C’s Capital Account |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||
C’s Loan A/c |
7,700 |
Balance b/d |
6,000 |
||
|
|
C’s Current A/c |
1,700 |
||
|
7,700 |
|
7,700 |
||
|
|
|
|
C’s Current Account |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||
Balance b/d |
500 |
Profit and Loss Suspense A/c (Share of profit) (WN 1) |
550 |
||
C’s Capital A/c (balancing figure) |
1,700 |
D’s Current A/c (Share of goodwill) (WN 2) |
1,650 |
||
|
2,200 |
|
2,200 |
||
|
|
|
|
Working Notes:
WN 1 Calculation of Profit (from April 01, 2014 to Sept. 30, 2014)
WN 2 Calculation of Goodwill
Goodwill = Average Profit × 1.5
= 2,200 × 1.5 = Rs 3,300
C’s Share of Goodwill
Answer:
Revaluation Account |
||||||
Dr. |
|
Cr. |
||||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|||
Bad Debts |
2,000 |
Loss transferred to: |
|
|||
Patents |
9,000 |
X’s Capital A/c |
4,400 |
|
||
|
|
Y’s Capital A/c |
4,400 |
|
||
|
|
Z’s Capital A/c |
2,200 |
11,000 |
||
|
11,000 |
|
11,000 |
|||
|
|
|
|
Partners’ Capital Accounts |
||||||||
Dr. |
|
Cr. |
||||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
|
Revaluation A/c (Loss) |
4,400 |
4,400 |
2,200 |
Balance b/d |
82,000 |
60,000 |
75,500 |
|
Y’s Capital A/c (Goodwill) |
18,667 |
– |
9,333 |
Reserve (Old Ratio) |
7,400 |
7,400 |
3,700 |
|
Y’s Loan A/c |
– |
91,000 |
– |
X’s Capital A/c (Goodwill) |
– |
18,667 |
– |
|
Balance c/d |
66,333 |
– |
67,667 |
Z’s Capital A/c (Goodwill) |
– |
9,333 |
– |
|
|
89,400 |
95,400 |
79,200 |
|
89,400 |
95,400 |
79,200 |
|
|
|
|
|
|
|
|
|
Balance Sheet as on March 31, 2014 (after Y’s Retirement) |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Creditors |
49,000 |
Cash |
8,000 |
|
Y’s Loan |
91,000 |
Debtors (19000-2000) |
17,000 |
|
Capital A/cs: |
|
Stock |
42,000 |
|
X |
66,333 |
|
Building |
2,07,000 |
Z |
67,667 |
1,34,000 |
|
|
|
2,74,000 |
|
2,74,000 |
|
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (X, Y and Z) = 2 : 2 : 1
Y retires from the firm.
∴Gaining Ratio = 2 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 70,000
Y’s Share of Goodwill =
This share of goodwill is to be distributed between X and Z in their gaining ratio (i.e. 2 : 1).
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
X’s Capital A/c |
Dr. |
|
18,667 |
|
Z’s Capital A/c |
Dr. |
|
9,333 |
|
To Y’s Capital A/c |
|
|
28,000 |
|
(Adjustment of goodwill made on Y’s retirement) |
|
|
|
|
|
|
|
|
Page No 5.79:
Question 22:
Revaluation Account |
||||||
Dr. |
|
Cr. |
||||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|||
Bad Debts |
2,000 |
Loss transferred to: |
|
|||
Patents |
9,000 |
X’s Capital A/c |
4,400 |
|
||
|
|
Y’s Capital A/c |
4,400 |
|
||
|
|
Z’s Capital A/c |
2,200 |
11,000 |
||
|
11,000 |
|
11,000 |
|||
|
|
|
|
Partners’ Capital Accounts |
||||||||
Dr. |
|
Cr. |
||||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
|
Revaluation A/c (Loss) |
4,400 |
4,400 |
2,200 |
Balance b/d |
82,000 |
60,000 |
75,500 |
|
Y’s Capital A/c (Goodwill) |
18,667 |
– |
9,333 |
Reserve (Old Ratio) |
7,400 |
7,400 |
3,700 |
|
Y’s Loan A/c |
– |
91,000 |
– |
X’s Capital A/c (Goodwill) |
– |
18,667 |
– |
|
Balance c/d |
66,333 |
– |
67,667 |
Z’s Capital A/c (Goodwill) |
– |
9,333 |
– |
|
|
89,400 |
95,400 |
79,200 |
|
89,400 |
95,400 |
79,200 |
|
|
|
|
|
|
|
|
|
Balance Sheet as on March 31, 2014 (after Y’s Retirement) |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Creditors |
49,000 |
Cash |
8,000 |
|
Y’s Loan |
91,000 |
Debtors (19000-2000) |
17,000 |
|
Capital A/cs: |
|
Stock |
42,000 |
|
X |
66,333 |
|
Building |
2,07,000 |
Z |
67,667 |
1,34,000 |
|
|
|
2,74,000 |
|
2,74,000 |
|
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (X, Y and Z) = 2 : 2 : 1
Y retires from the firm.
∴Gaining Ratio = 2 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 70,000
Y’s Share of Goodwill =
This share of goodwill is to be distributed between X and Z in their gaining ratio (i.e. 2 : 1).
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
X’s Capital A/c |
Dr. |
|
18,667 |
|
Z’s Capital A/c |
Dr. |
|
9,333 |
|
To Y’s Capital A/c |
|
|
28,000 |
|
(Adjustment of goodwill made on Y’s retirement) |
|
|
|
|
|
|
|
|
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Plant (35,000 × 10%) |
3,500 |
Stock (25,000 × 20%) |
5,000 |
|
Motor Vans (8,000 × 15%) |
1,200 |
Building (45,000 × 10%) |
4,500 |
|
Provision for Doubtful Debts |
1,950 |
|
|
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
1,425 |
|
|
|
Y’s Capital A/c |
950 |
|
|
|
Z’s Capital A/c |
475 |
2,850 |
|
|
|
9,500 |
|
9,500 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Y’s Capital A/c |
4,500 |
|
1,500 |
Balance b/d |
40,000 |
30,000 |
25,000 |
Y’s Loan A/c |
|
40,950 |
|
Reserve Fund |
6,000 |
4,000 |
2,000 |
|
|
|
|
Revaluation A/c (Profit) |
1,425 |
950 |
475 |
Balance c/d |
42,925 |
|
25,975 |
X’s Capital A/c (Goodwill) |
|
4,500 |
|
|
|
|
|
Z’s Capital A/c (Goodwill) |
|
1,500 |
|
|
47,425 |
40,950 |
27,425 |
|
47,425 |
40,950 |
27,425 |
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2014 (after Y’s Retirement) |
|||||
Liabilities |
Amount |
Assets |
Amount |
||
Sundry Creditors |
24,000 |
Cash at Bank |
2,500 |
||
Y’s Loan |
40,950 |
Debtors
|
16,000
|
|
|
Capital A/cs:
|
|
Less: Provision for Doubtful Debts (500 + 1,950) |
(2,450) |
13,550 |
|
X |
42,925 |
|
Stock (25,000 + 5,000) |
30,000 |
|
Z |
25,975 |
68,900 |
Motor Vans (8,000 – 1,200) |
6,800 |
|
|
|
Plant and Machinery (35,000 – 3,500) |
31,500 |
||
|
|
Factory Building (4,5000 + 4,500) |
49,500 |
||
|
1,33,850 |
|
1,33,850 |
||
|
|
|
|
Values involved are:
- Charity
- Fulfilling responsibility towards nation.
- Helping the firm for meeting requirement of funds
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (X, Y and Z) = or 3 : 2 : 1
Y retires from the firm.
New Ratio (X and Z) = 3: 1
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio = 3 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 18,000
Y’s Share of Goodwill =
This share of goodwill is to be distributed between X and Z in their gaining ratio (i.e. 3 : 1).
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
X’s Capital A/c |
Dr. |
|
4,500 |
|
Z’s Capital A/c |
Dr. |
|
1,500 |
|
To Y’s Capital A/c |
|
|
6,000 |
|
(Adjustment of goodwill made on Y’s retirement) |
|
|
|
|
|
|
|
|
Page No 5.79:
Question 23:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Plant (35,000 × 10%) |
3,500 |
Stock (25,000 × 20%) |
5,000 |
|
Motor Vans (8,000 × 15%) |
1,200 |
Building (45,000 × 10%) |
4,500 |
|
Provision for Doubtful Debts |
1,950 |
|
|
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
1,425 |
|
|
|
Y’s Capital A/c |
950 |
|
|
|
Z’s Capital A/c |
475 |
2,850 |
|
|
|
9,500 |
|
9,500 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Y’s Capital A/c |
4,500 |
|
1,500 |
Balance b/d |
40,000 |
30,000 |
25,000 |
Y’s Loan A/c |
|
40,950 |
|
Reserve Fund |
6,000 |
4,000 |
2,000 |
|
|
|
|
Revaluation A/c (Profit) |
1,425 |
950 |
475 |
Balance c/d |
42,925 |
|
25,975 |
X’s Capital A/c (Goodwill) |
|
4,500 |
|
|
|
|
|
Z’s Capital A/c (Goodwill) |
|
1,500 |
|
|
47,425 |
40,950 |
27,425 |
|
47,425 |
40,950 |
27,425 |
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2014 (after Y’s Retirement) |
|||||
Liabilities |
Amount |
Assets |
Amount |
||
Sundry Creditors |
24,000 |
Cash at Bank |
2,500 |
||
Y’s Loan |
40,950 |
Debtors
|
16,000
|
|
|
Capital A/cs:
|
|
Less: Provision for Doubtful Debts (500 + 1,950) |
(2,450) |
13,550 |
|
X |
42,925 |
|
Stock (25,000 + 5,000) |
30,000 |
|
Z |
25,975 |
68,900 |
Motor Vans (8,000 – 1,200) |
6,800 |
|
|
|
Plant and Machinery (35,000 – 3,500) |
31,500 |
||
|
|
Factory Building (4,5000 + 4,500) |
49,500 |
||
|
1,33,850 |
|
1,33,850 |
||
|
|
|
|
Values involved are:
- Charity
- Fulfilling responsibility towards nation.
- Helping the firm for meeting requirement of funds
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (X, Y and Z) = or 3 : 2 : 1
Y retires from the firm.
New Ratio (X and Z) = 3: 1
Gaining RatioNew Ratio − Old Ratio
∴Gaining Ratio = 3 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 18,000
Y’s Share of Goodwill =
This share of goodwill is to be distributed between X and Z in their gaining ratio (i.e. 3 : 1).
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
X’s Capital A/c |
Dr. |
|
4,500 |
|
Z’s Capital A/c |
Dr. |
|
1,500 |
|
To Y’s Capital A/c |
|
|
6,000 |
|
(Adjustment of goodwill made on Y’s retirement) |
|
|
|
|
|
|
|
|
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Revaluation A/c |
Dr. |
|
3,900 |
|
To Investments A/c |
|
|
300 |
|
To Stock A/c |
|
|
600 |
|
To Provision For Doubtful Debts A/c |
|
|
1000 |
|
To Trademark A/c |
|
|
2000 |
|
(Decrease in value of Assets and Provision for Doubt Debts transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Freehold Property A/c |
Dr. |
|
18,000 |
|
Creditors A/c |
Dr. |
|
1,200 |
|
To Revaluation A/c |
|
|
19,200 |
|
(Increase in value of Freehold Property and decrease in creditors transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
15,300 |
|
To X’s Capital A/c |
|
|
5,100 |
|
To Y’s Capital A/c |
|
|
5,100 |
|
To Z’s Capital A/c |
|
|
5,100 |
|
(Revaluation profit distributed among X,Y and Z in their old ratio) |
|
|
|
|
|
|
|
|
|
General Reserve A/c |
Dr. |
|
6,000 |
|
To X’s Capital A/c |
|
|
2,000 |
|
To Y’s Capital A/c |
|
|
2,000 |
|
To Z’s Capital A/c |
|
|
2,000 |
|
(General Reserve distributed among X,Y and Z in their old ratio ) |
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
1,100 |
|
Y’s Capital A/c |
Dr. |
|
1,100 |
|
Z’s Capital A/c |
Dr. |
|
1,100 |
|
To Goodwill A/c |
|
|
3,300 |
|
(Goodwill written off) |
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
1,750 |
|
Y’s Capital A/c |
Dr. |
|
1,750 |
|
To Z’s Capital A/c |
|
|
3,500 |
|
(Adjustment of Goodwill made at the time of Z’s retirement ) |
|
|
|
|
|
|
|
|
|
Z’s Capital A/c |
Dr. |
|
29,500 |
|
To Z’s Loan A/c |
|
|
29,500 |
|
(Z’s capital balance transferred to his loan account) |
|
|
|
Partners’ Capital Accounts |
|||||||||
Dr. |
|
Cr. |
|||||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
||
Goodwill A/c |
1,100 |
1,100 |
1,100 |
Balance B/d |
30,000 |
20,000 |
20,000 |
||
Y’s Capital A/c (Goodwill) |
1,750 |
1,750 |
|
General Reserve |
2,000 |
2,000 |
2,000 |
||
Z’s Loan |
|
|
29,500 |
X’s Capital A/c (Goodwill) |
|
|
1,750 |
||
|
|
|
|
Y’s Capital A/c (Goodwill) |
|
|
1,750 |
||
Balance c/d |
34,250 |
24,250 |
|
Revaluation A/c (Profit) |
5,100 |
5,100 |
5,100 |
||
|
37,100 |
27,100 |
30,600 |
|
37,100 |
27,100 |
30,600 |
||
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2014 (after Z’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Creditors (10,900 – 1,200) |
9,700 |
Cash in Hand and Cash at Bank |
8,600 |
||
|
|
Debtors |
20,000 |
|
|
Provident Fund |
2,000 |
Less: Provision for Doubtful Debts |
(1000) |
19,000 |
|
Z’s Loan |
29,500 |
Stock |
9,400 |
||
Capital A/c s:
|
|
|
|
||
X |
34,250 |
|
Investments |
4,700 |
|
Y |
24,250 |
58,500 |
Freehold Property |
58,000 |
|
|
99,700 |
|
99,700 |
||
|
|
|
|
Working Notes:
WN 1
Revaluation Account |
||||||
Dr. |
|
Cr. |
||||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|||
Investments |
300 |
Freehold Property |
18,000 |
|||
Stock |
600 |
Creditors |
1,200 |
|||
Provision for Doubtful Debts (20,000 × 5%) |
1,000 |
|
|
|||
Trademarks |
2,000 |
|
|
|||
Profit transferred to: |
|
|
|
|||
X’s Capital A/c |
5,100 |
|
|
|
||
Y’s Capital A/c |
5,100 |
|
|
|
||
Z’s Capital A/c |
5,100 |
15,300 |
|
|
||
|
19,200 |
|
19,200 |
|||
|
|
|
|
WN 2 Calculation of Gaining Ratio
Old Ratio (X, Y and Z) = 1 : 1 : 1
Z retires from the firm.
∴Gaining Ratio (X and Y) = 1 : 1
WN 3 Calculation of Goodwill
Goodwill = Average Profit × Number of years purchase
∴Goodwill = 10,500 × 1 = Rs 10,500
WN 4 Adjustment of Goodwill
Z’s Share of Goodwill =
This share of goodwill is to be distributed between X and Y in their gaining ratio (i.e. 1 : 1).
Page No 5.80:
Question 24:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Revaluation A/c |
Dr. |
|
3,900 |
|
To Investments A/c |
|
|
300 |
|
To Stock A/c |
|
|
600 |
|
To Provision For Doubtful Debts A/c |
|
|
1000 |
|
To Trademark A/c |
|
|
2000 |
|
(Decrease in value of Assets and Provision for Doubt Debts transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Freehold Property A/c |
Dr. |
|
18,000 |
|
Creditors A/c |
Dr. |
|
1,200 |
|
To Revaluation A/c |
|
|
19,200 |
|
(Increase in value of Freehold Property and decrease in creditors transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
15,300 |
|
To X’s Capital A/c |
|
|
5,100 |
|
To Y’s Capital A/c |
|
|
5,100 |
|
To Z’s Capital A/c |
|
|
5,100 |
|
(Revaluation profit distributed among X,Y and Z in their old ratio) |
|
|
|
|
|
|
|
|
|
General Reserve A/c |
Dr. |
|
6,000 |
|
To X’s Capital A/c |
|
|
2,000 |
|
To Y’s Capital A/c |
|
|
2,000 |
|
To Z’s Capital A/c |
|
|
2,000 |
|
(General Reserve distributed among X,Y and Z in their old ratio ) |
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
1,100 |
|
Y’s Capital A/c |
Dr. |
|
1,100 |
|
Z’s Capital A/c |
Dr. |
|
1,100 |
|
To Goodwill A/c |
|
|
3,300 |
|
(Goodwill written off) |
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
1,750 |
|
Y’s Capital A/c |
Dr. |
|
1,750 |
|
To Z’s Capital A/c |
|
|
3,500 |
|
(Adjustment of Goodwill made at the time of Z’s retirement ) |
|
|
|
|
|
|
|
|
|
Z’s Capital A/c |
Dr. |
|
29,500 |
|
To Z’s Loan A/c |
|
|
29,500 |
|
(Z’s capital balance transferred to his loan account) |
|
|
|
Partners’ Capital Accounts |
|||||||||
Dr. |
|
Cr. |
|||||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
||
Goodwill A/c |
1,100 |
1,100 |
1,100 |
Balance B/d |
30,000 |
20,000 |
20,000 |
||
Y’s Capital A/c (Goodwill) |
1,750 |
1,750 |
|
General Reserve |
2,000 |
2,000 |
2,000 |
||
Z’s Loan |
|
|
29,500 |
X’s Capital A/c (Goodwill) |
|
|
1,750 |
||
|
|
|
|
Y’s Capital A/c (Goodwill) |
|
|
1,750 |
||
Balance c/d |
34,250 |
24,250 |
|
Revaluation A/c (Profit) |
5,100 |
5,100 |
5,100 |
||
|
37,100 |
27,100 |
30,600 |
|
37,100 |
27,100 |
30,600 |
||
|
|
|
|
|
|
|
|
Balance Sheet as on April 01, 2014 (after Z’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Creditors (10,900 – 1,200) |
9,700 |
Cash in Hand and Cash at Bank |
8,600 |
||
|
|
Debtors |
20,000 |
|
|
Provident Fund |
2,000 |
Less: Provision for Doubtful Debts |
(1000) |
19,000 |
|
Z’s Loan |
29,500 |
Stock |
9,400 |
||
Capital A/c s:
|
|
|
|
||
X |
34,250 |
|
Investments |
4,700 |
|
Y |
24,250 |
58,500 |
Freehold Property |
58,000 |
|
|
99,700 |
|
99,700 |
||
|
|
|
|
Working Notes:
WN 1
Revaluation Account |
||||||
Dr. |
|
Cr. |
||||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|||
Investments |
300 |
Freehold Property |
18,000 |
|||
Stock |
600 |
Creditors |
1,200 |
|||
Provision for Doubtful Debts (20,000 × 5%) |
1,000 |
|
|
|||
Trademarks |
2,000 |
|
|
|||
Profit transferred to: |
|
|
|
|||
X’s Capital A/c |
5,100 |
|
|
|
||
Y’s Capital A/c |
5,100 |
|
|
|
||
Z’s Capital A/c |
5,100 |
15,300 |
|
|
||
|
19,200 |
|
19,200 |
|||
|
|
|
|
WN 2 Calculation of Gaining Ratio
Old Ratio (X, Y and Z) = 1 : 1 : 1
Z retires from the firm.
∴Gaining Ratio (X and Y) = 1 : 1
WN 3 Calculation of Goodwill
Goodwill = Average Profit × Number of years purchase
∴Goodwill = 10,500 × 1 = Rs 10,500
WN 4 Adjustment of Goodwill
Z’s Share of Goodwill =
This share of goodwill is to be distributed between X and Y in their gaining ratio (i.e. 1 : 1).
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Revaluation A/c |
Dr. |
|
4,300 |
|
To Provision for Doubtful Debts A/c |
|
|
300 |
|
To Provision for Outstanding Repair Bills A/c |
|
|
4,000 |
|
(Provisions transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Prepaid Insurance A/c |
Dr. |
|
1,500 |
|
Land and Building A/c |
Dr. |
|
10,000 |
|
To Revaluation A/c |
|
|
11,500 |
|
(Increase in value of Assets transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
7,200 |
|
To X’s Capital A/c |
|
|
3,600 |
|
To Y’s Capital A/c |
|
|
2,400 |
|
To Z’s Capital A/c |
|
|
1,200 |
|
( Revaluation profit distributed among X, Y and Z in their old ratio ) |
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
5,400 |
|
Z’s Capital A/c |
Dr. |
|
1,800 |
|
To Y’s Capital A/c |
|
|
7,200 |
|
(Y’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
Y’s Capital A/c |
Dr. |
|
39,600 |
|
To Y’s loan A/c |
|
|
39,600 |
|
(Y’s capital balance after all adjustment transferred to his Loan Account) |
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on March 31, 2014 (after Y’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Sundry Creditors |
13,800 |
Cash at Bank |
11,000 |
||
Provision for Outstanding Repair Bills |
4,000 |
Sundry Debtors |
10,000 |
|
|
|
|
Less: Provision for Doubtful Debts |
(500) |
9,500 |
|
Y’s Loan |
39,600 |
Stock |
16,000 |
||
Capital A/cs: |
|
Prepaid Insurance |
1,500 |
||
X |
43,200 |
|
Plant and Machinery |
17,000 |
|
Z |
14,400 |
57,600 |
Land and Building |
60,000 |
|
|
1,15,000 |
|
1,15,000 |
||
|
|
|
|
Working Notes:
WN 1
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Provision for Doubtful Debts |
|
Prepaid Insurance |
1,500 |
|
(500 – 200) |
300 |
Land And Building (50,000 × 20%) |
10,000 |
|
Provision For Outstanding Repairs Bills |
4,000 |
|
|
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
3,600 |
|
|
|
Y’s Capital A/c |
2,400 |
|
|
|
Z’s Capital A/c |
1,200 |
7,200 |
|
|
|
11,500 |
|
11,500 |
|
|
|
|
|
WN 2
Partners’ Capital Accounts |
||||||||
Dr. |
|
Cr. |
||||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
|
Y’s Capital A/c |
5,400 |
|
1,800 |
Balance b/d |
45,000 |
30,000 |
15,000 |
|
|
|
|
|
Revaluation A/c |
3,600 |
2,400 |
1,200 |
|
Y’s Loan |
|
39,600 |
|
X’s Capital A/c |
|
5,400 |
|
|
Balance c/d |
43,200 |
|
14,400 |
Z’s Capital A/c |
|
1,800 |
|
|
|
48,600 |
39,600 |
16,200 |
|
48,600 |
39,600 |
16,200 |
|
|
|
|
|
|
|
|
|
WN 3 Calculation of Ratios
∴Old Ratio (X, Y and Z) = 3 : 2 : 1
Y retires from the firm.
New Ratio (X and Z) = 3 : 1
Gaining Ratio = New Ratio − Old Ratio
∴Gaining Ratio = 3 : 1
WN 4 Adjustment of Goodwill
Goodwill of the firm = 21,600
Y’s Share of Goodwill =
This share of goodwill is to be distributed between X and Z in their gaining ratio (i.e. 3 : 1).
Page No 5.80:
Question 25:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Revaluation A/c |
Dr. |
|
4,300 |
|
To Provision for Doubtful Debts A/c |
|
|
300 |
|
To Provision for Outstanding Repair Bills A/c |
|
|
4,000 |
|
(Provisions transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Prepaid Insurance A/c |
Dr. |
|
1,500 |
|
Land and Building A/c |
Dr. |
|
10,000 |
|
To Revaluation A/c |
|
|
11,500 |
|
(Increase in value of Assets transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
7,200 |
|
To X’s Capital A/c |
|
|
3,600 |
|
To Y’s Capital A/c |
|
|
2,400 |
|
To Z’s Capital A/c |
|
|
1,200 |
|
( Revaluation profit distributed among X, Y and Z in their old ratio ) |
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
5,400 |
|
Z’s Capital A/c |
Dr. |
|
1,800 |
|
To Y’s Capital A/c |
|
|
7,200 |
|
(Y’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
Y’s Capital A/c |
Dr. |
|
39,600 |
|
To Y’s loan A/c |
|
|
39,600 |
|
(Y’s capital balance after all adjustment transferred to his Loan Account) |
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on March 31, 2014 (after Y’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Sundry Creditors |
13,800 |
Cash at Bank |
11,000 |
||
Provision for Outstanding Repair Bills |
4,000 |
Sundry Debtors |
10,000 |
|
|
|
|
Less: Provision for Doubtful Debts |
(500) |
9,500 |
|
Y’s Loan |
39,600 |
Stock |
16,000 |
||
Capital A/cs: |
|
Prepaid Insurance |
1,500 |
||
X |
43,200 |
|
Plant and Machinery |
17,000 |
|
Z |
14,400 |
57,600 |
Land and Building |
60,000 |
|
|
1,15,000 |
|
1,15,000 |
||
|
|
|
|
Working Notes:
WN 1
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Provision for Doubtful Debts |
|
Prepaid Insurance |
1,500 |
|
(500 – 200) |
300 |
Land And Building (50,000 × 20%) |
10,000 |
|
Provision For Outstanding Repairs Bills |
4,000 |
|
|
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
3,600 |
|
|
|
Y’s Capital A/c |
2,400 |
|
|
|
Z’s Capital A/c |
1,200 |
7,200 |
|
|
|
11,500 |
|
11,500 |
|
|
|
|
|
WN 2
Partners’ Capital Accounts |
||||||||
Dr. |
|
Cr. |
||||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
|
Y’s Capital A/c |
5,400 |
|
1,800 |
Balance b/d |
45,000 |
30,000 |
15,000 |
|
|
|
|
|
Revaluation A/c |
3,600 |
2,400 |
1,200 |
|
Y’s Loan |
|
39,600 |
|
X’s Capital A/c |
|
5,400 |
|
|
Balance c/d |
43,200 |
|
14,400 |
Z’s Capital A/c |
|
1,800 |
|
|
|
48,600 |
39,600 |
16,200 |
|
48,600 |
39,600 |
16,200 |
|
|
|
|
|
|
|
|
|
WN 3 Calculation of Ratios
∴Old Ratio (X, Y and Z) = 3 : 2 : 1
Y retires from the firm.
New Ratio (X and Z) = 3 : 1
Gaining Ratio = New Ratio − Old Ratio
∴Gaining Ratio = 3 : 1
WN 4 Adjustment of Goodwill
Goodwill of the firm = 21,600
Y’s Share of Goodwill =
This share of goodwill is to be distributed between X and Z in their gaining ratio (i.e. 3 : 1).
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Profit and Loss Adjustment A/c |
Dr. |
|
6,000 |
|
To Plant and Machinery A/c |
|
|
4,000 |
|
To Provision for Doubtful Debts A/c |
|
|
1,500 |
|
To Furniture A/c |
|
|
500 |
|
(Decrease in value of Assets and provision for doubtful debts transferred to Profit and Loss Adjustment Account) |
|
|
|
|
|
|
|
|
|
Stock A/c |
Dr. |
|
3,750 |
|
Factory Building A/c |
Dr. |
|
5,000 |
|
To Profit and Loss Adjustment A/c |
|
|
8,750 |
|
( Increase in value of Assets transferred to Profit and Loss Adjustment Account) |
|
|
|
|
|
|
|
|
|
Profit and Loss Adjustment A/c |
Dr. |
|
2,750 |
|
To A’s Capital A/c |
|
|
917 |
|
To B’s Capital A/c |
|
|
1,375 |
|
To C’s Capital A/c |
|
|
458 |
|
( Profit distributed among A, B and C in their old ratio ) |
|
|
|
|
|
|
|
|
|
A’s Capital A/c |
Dr. |
|
6,400 |
|
To B’s Capital A/c |
|
|
2,400 |
|
To C’s Capital A/c |
|
|
4,000 |
|
(C’s share of goodwill and B’s gain in goodwill adjusted) |
|
|
|
|
|
|
|
|
|
C’s Capital A/c |
Dr. |
|
32,125 |
|
To C’s Loan A/c |
|
|
32,125 |
|
(C’s capital balance after all adjustment transferred to his Loan Account) |
|
|
|
|
|
|
|
|
|
Reserve Fund A/c |
Dr. |
|
16,000 |
|
To A’s Capital A/c |
|
|
5,333 |
|
To B’s Capital A/c |
|
|
8,000 |
|
To C’s Capital A/c |
|
|
2,667 |
|
(Reserve Fund distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
Profit and Loss Adjustment Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Plant and Machinery |
|
Stock (25,000 × 15%) |
3,750 |
|
(40,000 × 10%) |
4,000 |
Factory Building (50,000 × 10%) |
5,000 |
|
Furniture (10,000 × 5%)) |
500 |
|
|
|
Provision for Doubtful Debts |
|
|
|
|
(2,000 – 500) |
1,500 |
|
|
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
917 |
|
|
|
B’s Capital A/c |
1,375 |
|
|
|
C’s Capital A/c |
458 |
2,750 |
|
|
|
|
|
|
|
|
8,750 |
|
8,750 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
B’s Capital A/c (Goodwill) |
2,400 |
|
|
Balance b/d |
30,000 |
40,000 |
25,000 |
C’s Capital A/c (Goodwill) |
4,000 |
|
|
Reserve Fund |
5,333 |
8,000 |
2,667 |
C’s Loan A/c |
|
|
32,125 |
Revaluation A/c (Profit) |
917 |
1,375 |
458 |
Balance c/d |
29,850 |
51,775 |
|
A’s Capital A/c (Goodwill) |
|
2,400 |
4,000 |
|
36,250 |
51,775 |
32,125 |
|
36,250 |
51,775 |
32,125 |
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on March 31, 2014 (after C’s Retirement) |
|||||
Liabilities |
Amounts Rs |
Assets |
Amounts Rs |
||
Sundry Creditors |
25,000 |
Factory Building |
55,000 |
||
Loan Payable |
15,000 |
Plant and Machinery |
36,000 |
||
C’s Loan |
32,125 |
Furniture |
9,500 |
||
Capital A/cs: |
|
Stock |
28,750 |
||
A |
29,850 |
|
Debtors |
18,000 |
|
B |
51,775 |
81,625 |
Less: Provision for Doubtful Debts |
(2,000) |
16,000 |
|
|
Cash in Hand |
8,500 |
||
|
1,53,750 |
|
1,53,750 |
||
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (A, B and C) = or 2 : 3 : 1
C retires from the firm.
New Ratio (A and B) = 3: 2
Gaining RatioNew Ratio − Old Ratio
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 24,000
C’s Share of Goodwill =
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
C’s Capital A/c (Goodwill) |
1,600 |
2,400 |
|
Balance b/d |
30,000 |
40,000 |
25,000 |
|
|
|
|
Reserve Fund |
5,333 |
8,000 |
2,667 |
B’s Loan A/c |
|
|
32,125 |
Revaluation A/c (Profit) |
917 |
1,375 |
458 |
Balance c/d |
34,650 |
46,975 |
|
A’s Capital A/c (Goodwill) |
|
|
4,000 |
|
36,250 |
49,375 |
32,125 |
|
36,250 |
49,375 |
32,125 |
|
|
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (A, B and C) = or 2 : 3 : 1
C retires from the firm.
New Ratio (A and B) = 2: 3
Gaining RatioNew Ratio − Old Ratio
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 24,000
C’s Share of Goodwill =
Page No 5.81:
Question 26:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Profit and Loss Adjustment A/c |
Dr. |
|
6,000 |
|
To Plant and Machinery A/c |
|
|
4,000 |
|
To Provision for Doubtful Debts A/c |
|
|
1,500 |
|
To Furniture A/c |
|
|
500 |
|
(Decrease in value of Assets and provision for doubtful debts transferred to Profit and Loss Adjustment Account) |
|
|
|
|
|
|
|
|
|
Stock A/c |
Dr. |
|
3,750 |
|
Factory Building A/c |
Dr. |
|
5,000 |
|
To Profit and Loss Adjustment A/c |
|
|
8,750 |
|
( Increase in value of Assets transferred to Profit and Loss Adjustment Account) |
|
|
|
|
|
|
|
|
|
Profit and Loss Adjustment A/c |
Dr. |
|
2,750 |
|
To A’s Capital A/c |
|
|
917 |
|
To B’s Capital A/c |
|
|
1,375 |
|
To C’s Capital A/c |
|
|
458 |
|
( Profit distributed among A, B and C in their old ratio ) |
|
|
|
|
|
|
|
|
|
A’s Capital A/c |
Dr. |
|
6,400 |
|
To B’s Capital A/c |
|
|
2,400 |
|
To C’s Capital A/c |
|
|
4,000 |
|
(C’s share of goodwill and B’s gain in goodwill adjusted) |
|
|
|
|
|
|
|
|
|
C’s Capital A/c |
Dr. |
|
32,125 |
|
To C’s Loan A/c |
|
|
32,125 |
|
(C’s capital balance after all adjustment transferred to his Loan Account) |
|
|
|
|
|
|
|
|
|
Reserve Fund A/c |
Dr. |
|
16,000 |
|
To A’s Capital A/c |
|
|
5,333 |
|
To B’s Capital A/c |
|
|
8,000 |
|
To C’s Capital A/c |
|
|
2,667 |
|
(Reserve Fund distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
Profit and Loss Adjustment Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Plant and Machinery |
|
Stock (25,000 × 15%) |
3,750 |
|
(40,000 × 10%) |
4,000 |
Factory Building (50,000 × 10%) |
5,000 |
|
Furniture (10,000 × 5%)) |
500 |
|
|
|
Provision for Doubtful Debts |
|
|
|
|
(2,000 – 500) |
1,500 |
|
|
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
917 |
|
|
|
B’s Capital A/c |
1,375 |
|
|
|
C’s Capital A/c |
458 |
2,750 |
|
|
|
|
|
|
|
|
8,750 |
|
8,750 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
B’s Capital A/c (Goodwill) |
2,400 |
|
|
Balance b/d |
30,000 |
40,000 |
25,000 |
C’s Capital A/c (Goodwill) |
4,000 |
|
|
Reserve Fund |
5,333 |
8,000 |
2,667 |
C’s Loan A/c |
|
|
32,125 |
Revaluation A/c (Profit) |
917 |
1,375 |
458 |
Balance c/d |
29,850 |
51,775 |
|
A’s Capital A/c (Goodwill) |
|
2,400 |
4,000 |
|
36,250 |
51,775 |
32,125 |
|
36,250 |
51,775 |
32,125 |
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on March 31, 2014 (after C’s Retirement) |
|||||
Liabilities |
Amounts Rs |
Assets |
Amounts Rs |
||
Sundry Creditors |
25,000 |
Factory Building |
55,000 |
||
Loan Payable |
15,000 |
Plant and Machinery |
36,000 |
||
C’s Loan |
32,125 |
Furniture |
9,500 |
||
Capital A/cs: |
|
Stock |
28,750 |
||
A |
29,850 |
|
Debtors |
18,000 |
|
B |
51,775 |
81,625 |
Less: Provision for Doubtful Debts |
(2,000) |
16,000 |
|
|
Cash in Hand |
8,500 |
||
|
1,53,750 |
|
1,53,750 |
||
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (A, B and C) = or 2 : 3 : 1
C retires from the firm.
New Ratio (A and B) = 3: 2
Gaining RatioNew Ratio − Old Ratio
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 24,000
C’s Share of Goodwill =
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
C’s Capital A/c (Goodwill) |
1,600 |
2,400 |
|
Balance b/d |
30,000 |
40,000 |
25,000 |
|
|
|
|
Reserve Fund |
5,333 |
8,000 |
2,667 |
B’s Loan A/c |
|
|
32,125 |
Revaluation A/c (Profit) |
917 |
1,375 |
458 |
Balance c/d |
34,650 |
46,975 |
|
A’s Capital A/c (Goodwill) |
|
|
4,000 |
|
36,250 |
49,375 |
32,125 |
|
36,250 |
49,375 |
32,125 |
|
|
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (A, B and C) = or 2 : 3 : 1
C retires from the firm.
New Ratio (A and B) = 2: 3
Gaining RatioNew Ratio − Old Ratio
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 24,000
C’s Share of Goodwill =
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Machinery (8,000 × 10%) |
800 |
Expenses Owing (4,500 –3,750) |
750 |
|
Loose Tools (4,000 × 10%) |
400 |
Factory Premises (24,300 – 22,500) |
1,800 |
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
675 |
|
|
|
Y’s Capital A/c |
450 |
|
|
|
Z’s Capital A/c |
225 |
1,350 |
|
|
|
2,550 |
|
2,550 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Y’s Capital A/c (Goodwill) |
3,375 |
|
1,125 |
Balance b/d |
15,000 |
15,000 |
15,000 |
|
|
|
|
Reserve Fund |
6,750 |
4,500 |
2,250 |
Y’s Loan A/c |
|
24,450 |
|
Revaluation A/c |
675 |
450 |
225 |
|
|
|
|
X’s Capital A/c (Goodwill) |
|
3,375 |
|
Balance c/d |
19,050 |
|
16,350 |
Z’s Capital A/c (Goodwill) |
|
1,125 |
|
|
22,425 |
24,450 |
17,475 |
|
22,425 |
24,450 |
17,475 |
|
|
|
|
|
|
|
|
Balance Sheet |
||||
as on January 01, 2014 (after Y’s Retirement) |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Trade Creditors |
3,000 |
Cash in Hand |
1,500 |
|
Bills Payable |
4,500 |
Cash at Bank |
7,500 |
|
Expenses Owing |
3,750 |
Debtors |
15,000 |
|
Y’s Loan |
24,450 |
Stock |
12,000 |
|
Capital A/c |
|
Factory Premises |
24,300 |
|
X |
19,050 |
|
Machinery (8000 – 800) |
7,200 |
Z |
16,350 |
35,400 |
Loss tools (4,000 – 400) |
3,600 |
|
71,100 |
|
71,100 |
|
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (X, Y and Z) = 3 : 2 : 1
Y retires from the firm.
∴Gaining Ratio = 3: 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 13,500
Y’s Share of Goodwill =
This share of goodwill is to be distributed between X and Z in their gaining ratio (i.e. 3 : 1).
Page No 5.81:
Question 27:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Machinery (8,000 × 10%) |
800 |
Expenses Owing (4,500 –3,750) |
750 |
|
Loose Tools (4,000 × 10%) |
400 |
Factory Premises (24,300 – 22,500) |
1,800 |
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
675 |
|
|
|
Y’s Capital A/c |
450 |
|
|
|
Z’s Capital A/c |
225 |
1,350 |
|
|
|
2,550 |
|
2,550 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Y’s Capital A/c (Goodwill) |
3,375 |
|
1,125 |
Balance b/d |
15,000 |
15,000 |
15,000 |
|
|
|
|
Reserve Fund |
6,750 |
4,500 |
2,250 |
Y’s Loan A/c |
|
24,450 |
|
Revaluation A/c |
675 |
450 |
225 |
|
|
|
|
X’s Capital A/c (Goodwill) |
|
3,375 |
|
Balance c/d |
19,050 |
|
16,350 |
Z’s Capital A/c (Goodwill) |
|
1,125 |
|
|
22,425 |
24,450 |
17,475 |
|
22,425 |
24,450 |
17,475 |
|
|
|
|
|
|
|
|
Balance Sheet |
||||
as on January 01, 2014 (after Y’s Retirement) |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Trade Creditors |
3,000 |
Cash in Hand |
1,500 |
|
Bills Payable |
4,500 |
Cash at Bank |
7,500 |
|
Expenses Owing |
3,750 |
Debtors |
15,000 |
|
Y’s Loan |
24,450 |
Stock |
12,000 |
|
Capital A/c |
|
Factory Premises |
24,300 |
|
X |
19,050 |
|
Machinery (8000 – 800) |
7,200 |
Z |
16,350 |
35,400 |
Loss tools (4,000 – 400) |
3,600 |
|
71,100 |
|
71,100 |
|
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (X, Y and Z) = 3 : 2 : 1
Y retires from the firm.
∴Gaining Ratio = 3: 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 13,500
Y’s Share of Goodwill =
This share of goodwill is to be distributed between X and Z in their gaining ratio (i.e. 3 : 1).
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs. |
|
Revaluation A/c |
Dr. |
|
350 |
|
To Provision for Doubtful Debts A/c |
|
|
350 |
|
( Provision for doubtful debts created) |
|
|
|
|
|
|
|
|
|
Building A/c |
Dr. |
|
8,800 |
|
To Revaluation A/c |
|
|
8,800 |
|
(Increase in value of Building transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
8,450 |
|
To R’s Capital A/c |
|
|
4,225 |
|
To S’s Capital A/c |
|
|
2,817 |
|
To M's Capital A/c |
|
|
1,408 |
|
(Revaluation profit distributed between partners in their old ratio) |
|
|
|
|
|
|
|
|
|
R’ Capital A/c |
Dr. |
|
2,250 |
|
M’s Capital A/c |
Dr. |
|
7,50 |
|
To S’s Capital |
|
|
3,000 |
|
( S’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
S’s Capital A/c |
Dr. |
|
13,317 |
|
To 6% Loan A/c |
|
|
8,317 |
|
To Bank A/c |
|
|
5,000 |
|
(Rs 5,000 paid to S and balance of S’s Capital transferred to his Loan Account) |
|
|
|
Balance Sheet |
|||||
as on March 31, 2014 (after S’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Sundry Creditors |
16,000 |
Building (23,000 + 8,800) |
31,800 |
||
|
|
Debtors |
7,000 |
|
|
|
|
Less: Provision for Doubtful Debts |
(350) |
6,650 |
|
S’S Loan |
8,317 |
Stock |
12,000 |
||
Capital A/cs: |
|
Patents |
8,000 |
||
R |
21,975 |
|
|
|
|
M |
13,158 |
35,133 |
Bank (6,000 – 5,000) |
1,000 |
|
|
59,450 |
|
59,450 |
||
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (R, S and M) = 3 : 2 : 1
S retires from the firm.
∴Gaining Ratio = 3: 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 9,000
S’s Share of Goodwill =
This share of goodwill is to be distributed between R and M in their gaining ratio (i.e. 3 : 1).
WN 3
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Provision for Doubtful Debts (7000 × 5%) |
350 |
Building |
8,800 |
|
Profit transferred to: |
|
|
|
|
R’s Capital A/c |
4,225 |
|
|
|
S’s Capital A/c |
2,817 |
|
|
|
M’s Capital A/c |
1,408 |
8,450 |
|
|
|
8,800 |
|
8,800 |
|
|
|
|
|
WN 4
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
R |
S |
M |
Particulars |
R |
S |
M |
S’s Capital A/c |
2,250 |
|
750 |
Balance b/d |
20,000 |
7,500 |
12,500 |
Bank A/c |
|
5,000 |
|
Revaluation A/c |
4,225 |
2,817 |
1,408 |
6% S’s Loan A/c |
|
8,317 |
|
R’s Capital A/c |
|
2,250 |
|
Balance c/d |
21,975 |
|
13,158 |
M’s Capital A/c |
|
750 |
|
|
24,225 |
13,317 |
13,908 |
|
24,225 |
13,317 |
13,908 |
|
|
|
|
|
|
|
|
Page No 5.82:
Question 28:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs. |
|
Revaluation A/c |
Dr. |
|
350 |
|
To Provision for Doubtful Debts A/c |
|
|
350 |
|
( Provision for doubtful debts created) |
|
|
|
|
|
|
|
|
|
Building A/c |
Dr. |
|
8,800 |
|
To Revaluation A/c |
|
|
8,800 |
|
(Increase in value of Building transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
8,450 |
|
To R’s Capital A/c |
|
|
4,225 |
|
To S’s Capital A/c |
|
|
2,817 |
|
To M's Capital A/c |
|
|
1,408 |
|
(Revaluation profit distributed between partners in their old ratio) |
|
|
|
|
|
|
|
|
|
R’ Capital A/c |
Dr. |
|
2,250 |
|
M’s Capital A/c |
Dr. |
|
7,50 |
|
To S’s Capital |
|
|
3,000 |
|
( S’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
S’s Capital A/c |
Dr. |
|
13,317 |
|
To 6% Loan A/c |
|
|
8,317 |
|
To Bank A/c |
|
|
5,000 |
|
(Rs 5,000 paid to S and balance of S’s Capital transferred to his Loan Account) |
|
|
|
Balance Sheet |
|||||
as on March 31, 2014 (after S’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Sundry Creditors |
16,000 |
Building (23,000 + 8,800) |
31,800 |
||
|
|
Debtors |
7,000 |
|
|
|
|
Less: Provision for Doubtful Debts |
(350) |
6,650 |
|
S’S Loan |
8,317 |
Stock |
12,000 |
||
Capital A/cs: |
|
Patents |
8,000 |
||
R |
21,975 |
|
|
|
|
M |
13,158 |
35,133 |
Bank (6,000 – 5,000) |
1,000 |
|
|
59,450 |
|
59,450 |
||
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio (R, S and M) = 3 : 2 : 1
S retires from the firm.
∴Gaining Ratio = 3: 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 9,000
S’s Share of Goodwill =
This share of goodwill is to be distributed between R and M in their gaining ratio (i.e. 3 : 1).
WN 3
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Provision for Doubtful Debts (7000 × 5%) |
350 |
Building |
8,800 |
|
Profit transferred to: |
|
|
|
|
R’s Capital A/c |
4,225 |
|
|
|
S’s Capital A/c |
2,817 |
|
|
|
M’s Capital A/c |
1,408 |
8,450 |
|
|
|
8,800 |
|
8,800 |
|
|
|
|
|
WN 4
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
R |
S |
M |
Particulars |
R |
S |
M |
S’s Capital A/c |
2,250 |
|
750 |
Balance b/d |
20,000 |
7,500 |
12,500 |
Bank A/c |
|
5,000 |
|
Revaluation A/c |
4,225 |
2,817 |
1,408 |
6% S’s Loan A/c |
|
8,317 |
|
R’s Capital A/c |
|
2,250 |
|
Balance c/d |
21,975 |
|
13,158 |
M’s Capital A/c |
|
750 |
|
|
24,225 |
13,317 |
13,908 |
|
24,225 |
13,317 |
13,908 |
|
|
|
|
|
|
|
|
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
2014 |
|
|
|
|
|
March 31 |
Profit and Loss A/c |
Dr. |
|
4,500 |
|
|
To M’s Capital A/c |
|
|
2,250 |
|
|
To N’s Capital A/c |
|
|
1,500 |
|
|
To O’s Capital A/c |
|
|
750 |
|
|
(Profit distrusted among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
|
March 31 |
Revaluation A/c |
Dr. |
|
8,400 |
|
|
To Stock A/c |
|
|
2,300 |
|
|
To Furniture A/c |
|
|
500 |
|
|
To Plant and Machinery A/c |
|
|
750 |
|
|
To Building A/c |
|
|
4,000 |
|
|
To Provision for Doubtful Debts A/c |
|
|
850 |
|
|
(Decrease in assets and creation of provision against doubtful debtors transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
|
|
M’s Capital A/c |
Dr. |
|
4,200 |
|
|
N’s Capital A/c |
Dr. |
|
2,800 |
|
|
O’s Capital A/c |
Dr. |
|
1,400 |
|
|
To Revaluation A/c |
|
|
8,400 |
|
|
(Revaluation loss distributed between M, N and O in their old ratio) |
|
|
|
|
|
|
|
|
|
|
|
M’s Capital A/c |
Dr. |
|
41,050 |
|
|
To Bank A/c |
|
|
11,050 |
|
|
To M’s Loan A/c |
|
|
30,000 |
|
|
(Rs 11,050 paid to M and balance of S’s Capital transferred to his Loan Account) |
|
|
|
|
|
|
|
|
|
|
|
N’s Capital A/c |
Dr. |
|
2,000 |
|
|
O’s Capital A/c |
Dr. |
|
1,000 |
|
|
M’s Capital A/c |
|
|
3,000 |
|
|
(Adjustment of goodwill made on M’s retirement) |
|
|
|
|
|
|
|
|
|
M’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Revaluation A/c |
4,200 |
Balance b/d |
40,000 |
Bank A/c |
11,050 |
Profit and Loss A/c |
2,250 |
|
|
N’s Capital A/c |
2,000 |
M’s Loan A/c |
30,000 |
O’s Capital A/c |
1,000 |
|
45,250 |
|
45,250 |
|
|
|
|
M’s Loan Account |
|||||
Dr. |
|
Cr. |
|||
Date |
Particulars |
Amount Rs |
Date |
Particulars |
Amount Rs |
2015 |
|
|
2014 |
|
|
March 31 |
Bank A/c (10,000 + 1,500) |
11,500 |
April |
M’s Capital A/c |
30,000 |
|
|
|
2015 |
|
|
March 31 |
Balance c/d |
20,000 |
March 31 |
Interest (30,000 × 5%) |
1,500 |
|
|
31,500 |
|
|
31,500 |
2016 |
|
|
2015 |
|
|
March 31 |
Bank A/c (10,000 + 1,000) |
11,000 |
April |
Balance b/d |
20,000 |
|
|
|
2016 |
|
|
March 31 |
Balance c/d |
10,000 |
March 31 |
Interest (20,000 × 5%) |
1,000 |
|
|
21,000 |
|
|
21,000 |
2017 |
|
|
2016 |
|
|
March 31 |
Bank A/c (10,000 + 500) |
10,500 |
April |
Balance b/d |
10,000 |
|
|
|
2017 |
|
|
|
|
|
March 31 |
Interest (10,000× 5%) |
500 |
|
|
10,500 |
|
|
10,500 |
|
|
|
|
|
|
Working Notes:
WN 1 Adjustment of Goodwill
Old Ratio (M, N and O) = or 3 : 2 : 1
M retires from the firm.
∴Gaining Ratio = 2 : 1
Goodwill of the firm = Rs 6,000
M’s Share of Goodwill =
This share of goodwill is to be distributed between N and O in their gaining ratio (i.e. 2 : 1).
WN 2
Amount of M’s Loan = Rs 30,000
Amount of each instalment =
Page No 5.82:
Question 29:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
2014 |
|
|
|
|
|
March 31 |
Profit and Loss A/c |
Dr. |
|
4,500 |
|
|
To M’s Capital A/c |
|
|
2,250 |
|
|
To N’s Capital A/c |
|
|
1,500 |
|
|
To O’s Capital A/c |
|
|
750 |
|
|
(Profit distrusted among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
|
March 31 |
Revaluation A/c |
Dr. |
|
8,400 |
|
|
To Stock A/c |
|
|
2,300 |
|
|
To Furniture A/c |
|
|
500 |
|
|
To Plant and Machinery A/c |
|
|
750 |
|
|
To Building A/c |
|
|
4,000 |
|
|
To Provision for Doubtful Debts A/c |
|
|
850 |
|
|
(Decrease in assets and creation of provision against doubtful debtors transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
|
|
M’s Capital A/c |
Dr. |
|
4,200 |
|
|
N’s Capital A/c |
Dr. |
|
2,800 |
|
|
O’s Capital A/c |
Dr. |
|
1,400 |
|
|
To Revaluation A/c |
|
|
8,400 |
|
|
(Revaluation loss distributed between M, N and O in their old ratio) |
|
|
|
|
|
|
|
|
|
|
|
M’s Capital A/c |
Dr. |
|
41,050 |
|
|
To Bank A/c |
|
|
11,050 |
|
|
To M’s Loan A/c |
|
|
30,000 |
|
|
(Rs 11,050 paid to M and balance of S’s Capital transferred to his Loan Account) |
|
|
|
|
|
|
|
|
|
|
|
N’s Capital A/c |
Dr. |
|
2,000 |
|
|
O’s Capital A/c |
Dr. |
|
1,000 |
|
|
M’s Capital A/c |
|
|
3,000 |
|
|
(Adjustment of goodwill made on M’s retirement) |
|
|
|
|
|
|
|
|
|
M’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Revaluation A/c |
4,200 |
Balance b/d |
40,000 |
Bank A/c |
11,050 |
Profit and Loss A/c |
2,250 |
|
|
N’s Capital A/c |
2,000 |
M’s Loan A/c |
30,000 |
O’s Capital A/c |
1,000 |
|
45,250 |
|
45,250 |
|
|
|
|
M’s Loan Account |
|||||
Dr. |
|
Cr. |
|||
Date |
Particulars |
Amount Rs |
Date |
Particulars |
Amount Rs |
2015 |
|
|
2014 |
|
|
March 31 |
Bank A/c (10,000 + 1,500) |
11,500 |
April |
M’s Capital A/c |
30,000 |
|
|
|
2015 |
|
|
March 31 |
Balance c/d |
20,000 |
March 31 |
Interest (30,000 × 5%) |
1,500 |
|
|
31,500 |
|
|
31,500 |
2016 |
|
|
2015 |
|
|
March 31 |
Bank A/c (10,000 + 1,000) |
11,000 |
April |
Balance b/d |
20,000 |
|
|
|
2016 |
|
|
March 31 |
Balance c/d |
10,000 |
March 31 |
Interest (20,000 × 5%) |
1,000 |
|
|
21,000 |
|
|
21,000 |
2017 |
|
|
2016 |
|
|
March 31 |
Bank A/c (10,000 + 500) |
10,500 |
April |
Balance b/d |
10,000 |
|
|
|
2017 |
|
|
|
|
|
March 31 |
Interest (10,000× 5%) |
500 |
|
|
10,500 |
|
|
10,500 |
|
|
|
|
|
|
Working Notes:
WN 1 Adjustment of Goodwill
Old Ratio (M, N and O) = or 3 : 2 : 1
M retires from the firm.
∴Gaining Ratio = 2 : 1
Goodwill of the firm = Rs 6,000
M’s Share of Goodwill =
This share of goodwill is to be distributed between N and O in their gaining ratio (i.e. 2 : 1).
WN 2
Amount of M’s Loan = Rs 30,000
Amount of each instalment =
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Stock (40,000 × 10%) |
4,000 |
Building (2,00,000× 20%) |
40,000 |
|
Furniture (80,000 × 20%) |
16,000 |
|
|
|
Plant and Machinery (1,20,000 × 5%) |
6,000 |
|
|
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
5,600 |
|
|
|
Y’s Capital A/c |
5,600 |
|
|
|
Z’s Capital A/c |
2,800 |
14,000 |
|
|
|
40,000 |
|
40,000 |
|
|
|
|
|
Partner’s Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
X’s Capital A/c (Goodwill) |
|
16,000 |
8,000 |
Balance b/d |
80,000 |
80,000 |
65,000 |
Cash A/c |
19,600 |
|
|
Profit and Loss A/c |
30,000 |
30,000 |
15,000 |
X’s Loan A/c |
1,20,000 |
|
|
Revaluation A/c (Profit) |
5,600 |
5,600 |
2,800 |
Balance c/d |
|
99,600 |
74,800 |
Y’s Capital A/c (Goodwill) |
16,000 |
|
|
|
|
|
|
Z’s Capital A/c (Goodwill) |
8,000 |
|
|
|
1,39,600 |
1,15,600 |
82,800 |
|
1,39,600 |
1,15,600 |
82,800 |
|
|
|
|
|
|
|
|
Balance Sheet |
||||
as on April 01, 2014 (after X’s Retirement) |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Bills Payable |
98,000 |
Cash (30,000 - 19,600) |
10,400 |
|
Sundry Creditors |
1,02,000 |
Bills Receivable |
9,000 |
|
X’s Loan |
1,20,000 |
Debtors |
21,000 |
|
Capital A/cs: |
|
Stock (40,000 – 4,000) |
36,000 |
|
Y |
99,600 |
|
Furniture (80,000 – 16,000) |
64,000 |
Z |
74,800 |
1,74,400 |
Plant and Machinery(1,20,000 – 6,000) |
1,14,000 |
|
|
Building (2,00,000 + 40,000) |
2,40,000 |
|
|
4,94,400 |
|
4,94,400 |
|
|
|
|
|
X’s Loan Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
|
X’s Capital A/c |
1,20,000 |
Balance c/d |
1,20,000 |
|
|
|
1,20,000 |
|
1,20,000 |
|
|
|
|
Working Note:
Adjustment of Goodwill
Old Ratio (X, Y and Z) = 2 : 2 : 1
X retires from the firm.
∴Gaining Ratio = 2 : 1
Goodwill of the firm = Rs 60,000
X’s Share of Goodwill =
This share of goodwill is to be distributed between Y and Z in their gaining ratio (i.e.2 : 1).
Page No 5.83:
Question 30:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Stock (40,000 × 10%) |
4,000 |
Building (2,00,000× 20%) |
40,000 |
|
Furniture (80,000 × 20%) |
16,000 |
|
|
|
Plant and Machinery (1,20,000 × 5%) |
6,000 |
|
|
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
5,600 |
|
|
|
Y’s Capital A/c |
5,600 |
|
|
|
Z’s Capital A/c |
2,800 |
14,000 |
|
|
|
40,000 |
|
40,000 |
|
|
|
|
|
Partner’s Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
X’s Capital A/c (Goodwill) |
|
16,000 |
8,000 |
Balance b/d |
80,000 |
80,000 |
65,000 |
Cash A/c |
19,600 |
|
|
Profit and Loss A/c |
30,000 |
30,000 |
15,000 |
X’s Loan A/c |
1,20,000 |
|
|
Revaluation A/c (Profit) |
5,600 |
5,600 |
2,800 |
Balance c/d |
|
99,600 |
74,800 |
Y’s Capital A/c (Goodwill) |
16,000 |
|
|
|
|
|
|
Z’s Capital A/c (Goodwill) |
8,000 |
|
|
|
1,39,600 |
1,15,600 |
82,800 |
|
1,39,600 |
1,15,600 |
82,800 |
|
|
|
|
|
|
|
|
Balance Sheet |
||||
as on April 01, 2014 (after X’s Retirement) |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Bills Payable |
98,000 |
Cash (30,000 - 19,600) |
10,400 |
|
Sundry Creditors |
1,02,000 |
Bills Receivable |
9,000 |
|
X’s Loan |
1,20,000 |
Debtors |
21,000 |
|
Capital A/cs: |
|
Stock (40,000 – 4,000) |
36,000 |
|
Y |
99,600 |
|
Furniture (80,000 – 16,000) |
64,000 |
Z |
74,800 |
1,74,400 |
Plant and Machinery(1,20,000 – 6,000) |
1,14,000 |
|
|
Building (2,00,000 + 40,000) |
2,40,000 |
|
|
4,94,400 |
|
4,94,400 |
|
|
|
|
|
X’s Loan Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
|
X’s Capital A/c |
1,20,000 |
Balance c/d |
1,20,000 |
|
|
|
1,20,000 |
|
1,20,000 |
|
|
|
|
Working Note:
Adjustment of Goodwill
Old Ratio (X, Y and Z) = 2 : 2 : 1
X retires from the firm.
∴Gaining Ratio = 2 : 1
Goodwill of the firm = Rs 60,000
X’s Share of Goodwill =
This share of goodwill is to be distributed between Y and Z in their gaining ratio (i.e.2 : 1).
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Profit transferred to : |
|
Land and Building (15,000 × 10%) |
1,500 |
|
X’s Capital A/c |
1,140 |
|
Provision for Doubtful Debts |
105 |
Y’s Capital A/c |
855 |
|
Stock (4,800 × 20%) |
960 |
Z’s Capital A/c |
570 |
2,565 |
|
|
|
2,565 |
|
2,565 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Y’s Capital A/c |
1,200 |
|
600 |
Balance b/d |
12,000 |
9,000 |
6,000 |
X’s Capital A/c (Rectification) |
|
420 |
|
Revaluation A/c (Profit) |
1,140 |
855 |
570 |
Z’s Capital A/c (Rectification) |
|
390 |
|
X’s Capital A/c (Goodwill) |
|
1,200 |
|
Y’s Loan A/c |
|
10,845 |
|
Z’s Capital A/c (Goodwill) |
|
600 |
|
Balanced c/d |
12,360 |
|
6,360 |
Z’s Capital A/c (Rectification) |
420 |
|
390 |
|
13,560 |
11,655 |
6,960 |
|
13,560 |
11,655 |
6,960 |
|
|
|
|
|
|
|
|
Balance Sheet |
||||
as on March 31, 2014 (after Y’s Retirement) |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Creditors |
4,140 |
Cash at Bank |
3,300 |
|
|
|
Sundry debtors |
3,045 |
|
Y’s Loan |
10,845 |
Stock (4,800 + 960) |
5,760 |
|
Capital A/cs: |
|
Plant and Machinery |
5,100 |
|
X |
12,360 |
|
|
|
Z |
6,360 |
18,720 |
Land and Building (15,000 + 1,500) |
16,500 |
|
33,705 |
|
33,705 |
|
|
|
|
|
Working Note:
Adjustment of Goodwill
Old Ratio (X, Y and Z) = 4 : 3 : 2
Y retires from the firm.
∴Gaining Ratio = 4 : 2 or 2 : 1
Goodwill of the firm = Rs 5,400
Y’s Share of Goodwill =
This share of goodwill is to be distributed between X and Z in their gaining ratio (i.e. 2 : 1).
Page No 5.83:
Question 31:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Profit transferred to : |
|
Land and Building (15,000 × 10%) |
1,500 |
|
X’s Capital A/c |
1,140 |
|
Provision for Doubtful Debts |
105 |
Y’s Capital A/c |
855 |
|
Stock (4,800 × 20%) |
960 |
Z’s Capital A/c |
570 |
2,565 |
|
|
|
2,565 |
|
2,565 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Y’s Capital A/c |
1,200 |
|
600 |
Balance b/d |
12,000 |
9,000 |
6,000 |
X’s Capital A/c (Rectification) |
|
420 |
|
Revaluation A/c (Profit) |
1,140 |
855 |
570 |
Z’s Capital A/c (Rectification) |
|
390 |
|
X’s Capital A/c (Goodwill) |
|
1,200 |
|
Y’s Loan A/c |
|
10,845 |
|
Z’s Capital A/c (Goodwill) |
|
600 |
|
Balanced c/d |
12,360 |
|
6,360 |
Z’s Capital A/c (Rectification) |
420 |
|
390 |
|
13,560 |
11,655 |
6,960 |
|
13,560 |
11,655 |
6,960 |
|
|
|
|
|
|
|
|
Balance Sheet |
||||
as on March 31, 2014 (after Y’s Retirement) |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Creditors |
4,140 |
Cash at Bank |
3,300 |
|
|
|
Sundry debtors |
3,045 |
|
Y’s Loan |
10,845 |
Stock (4,800 + 960) |
5,760 |
|
Capital A/cs: |
|
Plant and Machinery |
5,100 |
|
X |
12,360 |
|
|
|
Z |
6,360 |
18,720 |
Land and Building (15,000 + 1,500) |
16,500 |
|
33,705 |
|
33,705 |
|
|
|
|
|
Working Note:
Adjustment of Goodwill
Old Ratio (X, Y and Z) = 4 : 3 : 2
Y retires from the firm.
∴Gaining Ratio = 4 : 2 or 2 : 1
Goodwill of the firm = Rs 5,400
Y’s Share of Goodwill =
This share of goodwill is to be distributed between X and Z in their gaining ratio (i.e. 2 : 1).
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Revaluation A/c |
Dr. |
|
3,000 |
|
To Fixed Assets A/c |
|
|
2,000 |
|
To Provision for doubtful Debts A/c |
|
|
1,000 |
|
(Decrease in value of Fixed Assets and provision for doubtful debts transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
P’s Capital A/c |
Dr. |
|
1,200 |
|
Q’s Capital A/c |
Dr. |
|
900 |
|
R’s Capital A/c |
Dr. |
|
900 |
|
To Revaluation A/c |
|
|
3,000 |
|
(Revaluation loss distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
Workmen’s Compensation Reserve A/c |
Dr. |
|
10,000 |
|
To Outstanding Workmen’s Compensation A/c |
|
|
4,000 |
|
To P’s Capital A/c |
|
|
2,400 |
|
To Q’s Capital A/c |
|
|
1,800 |
|
To R’s Capital A/c |
|
|
1,800 |
|
(Workmen Compensation claim adjusted against Workmen’s Compensation Reserve and the balance amount is distributed among the partners) |
|
|
|
|
|
|
|
|
|
Reserves A/c |
Dr. |
|
10,000 |
|
To R’s Capital A/c |
|
|
4,000 |
|
To Q’s Capital A/c |
|
|
3,000 |
|
To R’s Capital A/c |
|
|
3,000 |
|
(Reserve distributed among all the partners in their old ratio) |
|
|
|
|
|
|
|
|
|
P’s Capital A/c |
Dr. |
|
13,333 |
|
Q’s Capital A/c |
Dr. |
|
1,667 |
|
To R’s Capital A/c |
|
|
15,000 |
|
(R’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
R’s Capital A/c |
Dr. |
|
27,900 |
|
To R’s Loan A/c |
|
|
27,900 |
|
(R’s capital balance transferred to his Loan Account) |
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on March 31,2010 (after R’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Creditors |
10,000 |
Cash at Bank |
20,000 |
||
Employees’ Provident Fund |
20,000 |
Debtors |
15,000 |
|
|
Outstanding Workmen’s Compensation Reserve |
4,000 |
Less: Provision for Doubtful Debts |
(1,000) |
14,000 |
|
R’s Loan |
27,900 |
Stock |
17,000 |
||
Capital A/cs: |
|
Fixed Assets (52,000 – 2,000) |
50,000 |
||
P |
21,867 |
|
|
|
|
Q |
17,233 |
39,100 |
|
|
|
|
|
1,01,000 |
|
1,01,000 |
|
|
|
|
|
R’s Loan Account |
|||||
Dr. |
|
Cr. |
|||
Date |
Particulars |
Amount Rs |
Date |
Particulars |
Amount Rs |
2011 |
|
|
2011 |
|
|
March 31 |
Bank (9,300 + 2,790) |
12,090 |
April 01 |
R’s Capital A/c |
27,900 |
March 31 |
Balance c/d |
18,600 |
March 31 |
Interest (27,900 × 10%) |
2,790 |
|
|
30,690 |
|
|
30,690 |
2012 |
|
|
2011 |
|
|
March 31 |
Bank (9,300 + 1,860) |
11,160 |
April 01 |
Balance b/d |
18,600 |
|
|
|
2012 |
|
|
March 31 |
Balance c/d |
9,300 |
March 31 |
Interest (18,600 × 10%) |
1,860 |
|
|
20,460 |
|
|
20,460 |
2013 |
|
|
2012 |
|
|
March 31 |
Bank (9,300 + 930) |
10,230 |
April 01 |
Balance b/d |
9,300 |
|
|
|
2013 |
|
|
|
|
|
March 31 |
Interest (9,300 × 10%) |
930 |
|
|
|
|
|
|
|
|
10,230 |
|
|
10,230 |
|
|
|
|
|
|
Value involved are:
- Social Welfare
- Charity
- Motivating education
Working Notes:
WN 1
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Fixed Assets |
2,000 |
Loss transferred to: |
|
|
Provision for Doubtful Debts |
1,000 |
P’s Capital A/c |
1,200 |
|
|
|
Q’s Capital A/c |
900 |
|
|
|
R’s Capital A/c |
900 |
3,000 |
|
3,000 |
|
3,000 |
|
|
|
|
|
WN 2
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
P |
Q |
R |
Particulars |
P |
Q |
R |
Drawings A/c |
|
|
6,000 |
Balance b/d |
30,000 |
15,000 |
15,000 |
R’s Capital A/c (Goodwill) |
13,333 |
1,667 |
|
Workmen’s Compensation Reserve |
2,400 |
1,800 |
1,800 |
Revaluation A/c |
1,200 |
900 |
900 |
Reserves |
4,000 |
3,000 |
3,000 |
R’s Loan A/c |
|
|
27,900 |
P’s Capital A/c (Goodwill) |
|
|
13,333 |
Balance c/d |
21,867 |
17,233 |
|
Q’s Capital A/c (Goodwill) |
|
|
1,667 |
|
36,400 |
19,800 |
34,800 |
|
36,400 |
19,800 |
34,800 |
|
|
|
|
|
|
|
|
WN 3
Calculation of Gaining Ratio
Old Ratio (P, Q and R) = 4 : 3 : 3
New Ratio (P and Q) = 2 : 1
R retires from the firm.
Gaining Ratio = New Ratio − Old Ratio
∴Gaining Ratio = 8 : 1
WN 4
Adjustment of Goodwill
Goodwill of the firm = Rs 50,000
R’s Share of Goodwill =
This share of goodwill is to be distributed between P and R in their gaining ratio (i.e. 8 : 1).
Page No 5.84:
Question 32:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Revaluation A/c |
Dr. |
|
3,000 |
|
To Fixed Assets A/c |
|
|
2,000 |
|
To Provision for doubtful Debts A/c |
|
|
1,000 |
|
(Decrease in value of Fixed Assets and provision for doubtful debts transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
P’s Capital A/c |
Dr. |
|
1,200 |
|
Q’s Capital A/c |
Dr. |
|
900 |
|
R’s Capital A/c |
Dr. |
|
900 |
|
To Revaluation A/c |
|
|
3,000 |
|
(Revaluation loss distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
Workmen’s Compensation Reserve A/c |
Dr. |
|
10,000 |
|
To Outstanding Workmen’s Compensation A/c |
|
|
4,000 |
|
To P’s Capital A/c |
|
|
2,400 |
|
To Q’s Capital A/c |
|
|
1,800 |
|
To R’s Capital A/c |
|
|
1,800 |
|
(Workmen Compensation claim adjusted against Workmen’s Compensation Reserve and the balance amount is distributed among the partners) |
|
|
|
|
|
|
|
|
|
Reserves A/c |
Dr. |
|
10,000 |
|
To R’s Capital A/c |
|
|
4,000 |
|
To Q’s Capital A/c |
|
|
3,000 |
|
To R’s Capital A/c |
|
|
3,000 |
|
(Reserve distributed among all the partners in their old ratio) |
|
|
|
|
|
|
|
|
|
P’s Capital A/c |
Dr. |
|
13,333 |
|
Q’s Capital A/c |
Dr. |
|
1,667 |
|
To R’s Capital A/c |
|
|
15,000 |
|
(R’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
R’s Capital A/c |
Dr. |
|
27,900 |
|
To R’s Loan A/c |
|
|
27,900 |
|
(R’s capital balance transferred to his Loan Account) |
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on March 31,2010 (after R’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Creditors |
10,000 |
Cash at Bank |
20,000 |
||
Employees’ Provident Fund |
20,000 |
Debtors |
15,000 |
|
|
Outstanding Workmen’s Compensation Reserve |
4,000 |
Less: Provision for Doubtful Debts |
(1,000) |
14,000 |
|
R’s Loan |
27,900 |
Stock |
17,000 |
||
Capital A/cs: |
|
Fixed Assets (52,000 – 2,000) |
50,000 |
||
P |
21,867 |
|
|
|
|
Q |
17,233 |
39,100 |
|
|
|
|
|
1,01,000 |
|
1,01,000 |
|
|
|
|
|
R’s Loan Account |
|||||
Dr. |
|
Cr. |
|||
Date |
Particulars |
Amount Rs |
Date |
Particulars |
Amount Rs |
2011 |
|
|
2011 |
|
|
March 31 |
Bank (9,300 + 2,790) |
12,090 |
April 01 |
R’s Capital A/c |
27,900 |
March 31 |
Balance c/d |
18,600 |
March 31 |
Interest (27,900 × 10%) |
2,790 |
|
|
30,690 |
|
|
30,690 |
2012 |
|
|
2011 |
|
|
March 31 |
Bank (9,300 + 1,860) |
11,160 |
April 01 |
Balance b/d |
18,600 |
|
|
|
2012 |
|
|
March 31 |
Balance c/d |
9,300 |
March 31 |
Interest (18,600 × 10%) |
1,860 |
|
|
20,460 |
|
|
20,460 |
2013 |
|
|
2012 |
|
|
March 31 |
Bank (9,300 + 930) |
10,230 |
April 01 |
Balance b/d |
9,300 |
|
|
|
2013 |
|
|
|
|
|
March 31 |
Interest (9,300 × 10%) |
930 |
|
|
|
|
|
|
|
|
10,230 |
|
|
10,230 |
|
|
|
|
|
|
Value involved are:
- Social Welfare
- Charity
- Motivating education
Working Notes:
WN 1
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Fixed Assets |
2,000 |
Loss transferred to: |
|
|
Provision for Doubtful Debts |
1,000 |
P’s Capital A/c |
1,200 |
|
|
|
Q’s Capital A/c |
900 |
|
|
|
R’s Capital A/c |
900 |
3,000 |
|
3,000 |
|
3,000 |
|
|
|
|
|
WN 2
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
P |
Q |
R |
Particulars |
P |
Q |
R |
Drawings A/c |
|
|
6,000 |
Balance b/d |
30,000 |
15,000 |
15,000 |
R’s Capital A/c (Goodwill) |
13,333 |
1,667 |
|
Workmen’s Compensation Reserve |
2,400 |
1,800 |
1,800 |
Revaluation A/c |
1,200 |
900 |
900 |
Reserves |
4,000 |
3,000 |
3,000 |
R’s Loan A/c |
|
|
27,900 |
P’s Capital A/c (Goodwill) |
|
|
13,333 |
Balance c/d |
21,867 |
17,233 |
|
Q’s Capital A/c (Goodwill) |
|
|
1,667 |
|
36,400 |
19,800 |
34,800 |
|
36,400 |
19,800 |
34,800 |
|
|
|
|
|
|
|
|
WN 3
Calculation of Gaining Ratio
Old Ratio (P, Q and R) = 4 : 3 : 3
New Ratio (P and Q) = 2 : 1
R retires from the firm.
Gaining Ratio = New Ratio − Old Ratio
∴Gaining Ratio = 8 : 1
WN 4
Adjustment of Goodwill
Goodwill of the firm = Rs 50,000
R’s Share of Goodwill =
This share of goodwill is to be distributed between P and R in their gaining ratio (i.e. 8 : 1).
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Plant and Machinery (28,000 × 10%) |
2,800 |
Stock (20,000 × 10%) |
2,000 |
|
Electronic Typewriter (8,000 × 10%) |
800 |
Land and Building (36,000 × 10%) |
3,600 |
|
Outstanding Salary |
2,000 |
Provision for Doubtful Debts |
2,000 |
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
800 |
|
|
|
B’s Capital A/c |
600 |
|
|
|
C’s Capital A/c |
600 |
2,000 |
|
|
|
|
|
|
|
|
7,600 |
|
7,600 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
B’s Capital A/c |
2,400 |
|
1,800 |
Balance b/d |
32,000 |
24,000 |
20,000 |
|
|
|
|
Reserves |
8,000 |
6,000 |
6,000 |
B’s Loan A/c |
|
34,800 |
|
Revaluation A/c |
800 |
600 |
600 |
|
|
|
|
A’s Capital A/c |
|
2,400 |
|
Balance c/d |
38,400 |
|
24,800 |
C’s Capital A/c |
|
1,800 |
|
|
40,800 |
34,800 |
26,600 |
|
40,800 |
34,800 |
26,600 |
|
|
|
|
|
|
|
|
Balance Sheet |
|||
an on April 01, 2014 (after B’s Retirement) |
|||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
Creditors |
7,000 |
Land and Building (36,000 + 3,600) |
39,600 |
Bills Payable |
3,000 |
Plant and Machinery (28,000 – 2,800) |
25,200 |
B’s Loan |
34,800 |
Electronic Typewriter (8000 – 800) |
7,200 |
Capital A/cs: |
|
Stock (20,000 + 2,000) |
22,000 |
A |
38,400 |
Sundry Debtors |
14,000 |
C |
24,800 |
Bank |
2000 |
Outstanding Salary |
2,000 |
|
|
|
1,10,000 |
|
1,10,000 |
|
|
|
|
Working Note:
Adjustment of Goodwill
Old Ratio (A, B and C) = 4 : 3 : 3
B retires from the firm.
∴Gaining Ratio = 4 : 3
Goodwill of the firm = Rs 14,000
B’s Share of Goodwill =
This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 4 : 3).
Page No 5.84:
Question 33:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Plant and Machinery (28,000 × 10%) |
2,800 |
Stock (20,000 × 10%) |
2,000 |
|
Electronic Typewriter (8,000 × 10%) |
800 |
Land and Building (36,000 × 10%) |
3,600 |
|
Outstanding Salary |
2,000 |
Provision for Doubtful Debts |
2,000 |
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
800 |
|
|
|
B’s Capital A/c |
600 |
|
|
|
C’s Capital A/c |
600 |
2,000 |
|
|
|
|
|
|
|
|
7,600 |
|
7,600 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
B’s Capital A/c |
2,400 |
|
1,800 |
Balance b/d |
32,000 |
24,000 |
20,000 |
|
|
|
|
Reserves |
8,000 |
6,000 |
6,000 |
B’s Loan A/c |
|
34,800 |
|
Revaluation A/c |
800 |
600 |
600 |
|
|
|
|
A’s Capital A/c |
|
2,400 |
|
Balance c/d |
38,400 |
|
24,800 |
C’s Capital A/c |
|
1,800 |
|
|
40,800 |
34,800 |
26,600 |
|
40,800 |
34,800 |
26,600 |
|
|
|
|
|
|
|
|
Balance Sheet |
|||
an on April 01, 2014 (after B’s Retirement) |
|||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
Creditors |
7,000 |
Land and Building (36,000 + 3,600) |
39,600 |
Bills Payable |
3,000 |
Plant and Machinery (28,000 – 2,800) |
25,200 |
B’s Loan |
34,800 |
Electronic Typewriter (8000 – 800) |
7,200 |
Capital A/cs: |
|
Stock (20,000 + 2,000) |
22,000 |
A |
38,400 |
Sundry Debtors |
14,000 |
C |
24,800 |
Bank |
2000 |
Outstanding Salary |
2,000 |
|
|
|
1,10,000 |
|
1,10,000 |
|
|
|
|
Working Note:
Adjustment of Goodwill
Old Ratio (A, B and C) = 4 : 3 : 3
B retires from the firm.
∴Gaining Ratio = 4 : 3
Goodwill of the firm = Rs 14,000
B’s Share of Goodwill =
This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 4 : 3).
Answer:
Revaluation Account |
||||||
Dr. |
|
Cr. |
||||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|||
Stock |
12,000 |
Fixed Assets (3,00,000 × 10%) |
30,000 |
|||
Provision for Doubtful Debts (6,000 – 4,000) |
2,000 |
|
|
|||
Profit transferred to: |
|
|
|
|||
X’s Capital A/c |
6,000 |
|
|
|
||
Y’s Capital A/c |
6,000 |
|
|
|
||
Z’s Capital A/c |
4,000 |
16,000 |
|
|
||
|
30,000 |
|
30,000 |
|||
|
|
|
|
Partners’ Capital Account |
||||||||
Dr. |
|
Cr. |
||||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
|
Profit and Loss A/c |
1,500 |
1,500 |
1,000 |
Balance b/d |
1,00,000 |
60,000 |
50,000 |
|
Advertise Suspense A/c |
6,000 |
6,000 |
4,000 |
General Reserve |
30,000 |
30,000 |
20,000 |
|
Y’s Capital A/c |
18,000 |
|
12,000 |
Revaluation A/c |
6,000 |
6,000 |
4,000 |
|
Y’s Loan A/c |
|
1,18,500 |
|
X’s Capital A/c |
|
18,000 |
|
|
Balance c/d |
1,10,500 |
|
57,000 |
|
|
|
|
|
|
|
|
|
Z’s Capital A/c |
|
12,000 |
|
|
|
1,36,000 |
1,26,000 |
74,000 |
|
1,36,000 |
1,26,000 |
74,000 |
|
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on April 01, 2013 (after Y’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Sundry Creditors |
2,50,000 |
Cash at Bank |
50,000 |
||
X’s Loan |
50,000 |
Bills Receivable |
60,000 |
||
Y’s Loan |
1,58,500 |
Debtors |
80,000 |
|
|
Capital A/c : |
|
Less: Prov. For D. Debts |
(6,000) |
74,000 |
|
X |
1,10,500 |
|
Stock (1,24,000 – 12,000) |
1,12,000 |
|
Z |
57,000 |
1,67,500 |
Fixed Assets (3,00,000 + 30,000) |
3,30,000 |
|
|
|
|
|
||
|
6,26,000 |
|
6,26,000 |
||
|
|
|
|
Y’s Loan Account |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||
|
|
Balance b/d |
40,000 |
||
Balance c/d |
1,58,500 |
Y’s Capital A/c |
1,18,500 |
||
|
1,58,500 |
|
1,58,500 |
||
|
|
|
|
Working Notes:
WN 1 Adjustment of Goodwill
WN 2 Distribution of General Reserve
WN3 Writing-off Advisement Suspense
WN4 Writing-off Profit and Loss (Loss)
Page No 5.85:
Question 34:
Revaluation Account |
||||||
Dr. |
|
Cr. |
||||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|||
Stock |
12,000 |
Fixed Assets (3,00,000 × 10%) |
30,000 |
|||
Provision for Doubtful Debts (6,000 – 4,000) |
2,000 |
|
|
|||
Profit transferred to: |
|
|
|
|||
X’s Capital A/c |
6,000 |
|
|
|
||
Y’s Capital A/c |
6,000 |
|
|
|
||
Z’s Capital A/c |
4,000 |
16,000 |
|
|
||
|
30,000 |
|
30,000 |
|||
|
|
|
|
Partners’ Capital Account |
||||||||
Dr. |
|
Cr. |
||||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
|
Profit and Loss A/c |
1,500 |
1,500 |
1,000 |
Balance b/d |
1,00,000 |
60,000 |
50,000 |
|
Advertise Suspense A/c |
6,000 |
6,000 |
4,000 |
General Reserve |
30,000 |
30,000 |
20,000 |
|
Y’s Capital A/c |
18,000 |
|
12,000 |
Revaluation A/c |
6,000 |
6,000 |
4,000 |
|
Y’s Loan A/c |
|
1,18,500 |
|
X’s Capital A/c |
|
18,000 |
|
|
Balance c/d |
1,10,500 |
|
57,000 |
|
|
|
|
|
|
|
|
|
Z’s Capital A/c |
|
12,000 |
|
|
|
1,36,000 |
1,26,000 |
74,000 |
|
1,36,000 |
1,26,000 |
74,000 |
|
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on April 01, 2013 (after Y’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Sundry Creditors |
2,50,000 |
Cash at Bank |
50,000 |
||
X’s Loan |
50,000 |
Bills Receivable |
60,000 |
||
Y’s Loan |
1,58,500 |
Debtors |
80,000 |
|
|
Capital A/c : |
|
Less: Prov. For D. Debts |
(6,000) |
74,000 |
|
X |
1,10,500 |
|
Stock (1,24,000 – 12,000) |
1,12,000 |
|
Z |
57,000 |
1,67,500 |
Fixed Assets (3,00,000 + 30,000) |
3,30,000 |
|
|
|
|
|
||
|
6,26,000 |
|
6,26,000 |
||
|
|
|
|
Y’s Loan Account |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||
|
|
Balance b/d |
40,000 |
||
Balance c/d |
1,58,500 |
Y’s Capital A/c |
1,18,500 |
||
|
1,58,500 |
|
1,58,500 |
||
|
|
|
|
Working Notes:
WN 1 Adjustment of Goodwill
WN 2 Distribution of General Reserve
WN3 Writing-off Advisement Suspense
WN4 Writing-off Profit and Loss (Loss)
Answer:
Revaluation Account |
||||
Dr. |
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Stock |
10,000 |
Plant & Machinery |
1,00,000 |
|
Debtors |
15,000 |
|
||
Profit on Revaluation transferred to: |
|
|
|
|
P |
37,500 |
|
|
|
Q |
25,000 |
|
|
|
R |
12,500 |
75,000 |
|
|
|
1,00,000 |
|
1,00,000 |
|
|
|
|
|
Partners’ Capital Account |
|||||||
Dr. |
Cr. |
||||||
Particulars |
P |
Q |
R |
Particulars |
P |
Q |
R |
Q’s Capital |
– |
– |
50,000 |
Balance b/d |
2,00,000 |
1,50,000 |
1,00,000 |
Q’s Loan |
– |
2,25,000 |
– |
Revaluation A/c (Profit) |
37,500 |
25,000 |
12,500 |
Balance c/d |
2,37,500 |
– |
62,500 |
R’s Capital |
– |
50,000 |
– |
|
2,37,500 |
2,25,000 |
1,12,500 |
|
2,37,500 |
2,25,000 |
1,12,500 |
|
|
|
|
|
|
|
|
Balance Sheet as at March 31, 2014 |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Creditors |
50,000 |
Plant and Machinery (2,00,000 + 1,00,00) |
3,00,000 |
|
Q’s Loan |
2,25,000 |
Stock (1,00,000 – 10,000) |
90,000 |
|
Capital A/c : |
|
Debtors (1,00,000 – 15,000) |
85,000 |
|
P |
2,37,500 |
|
Cash |
1,00,000 |
R |
62,500 |
3,00,000 |
|
|
|
5,75,000 |
|
5,75,000 |
|
|
|
|
|
Values involved are:
- Charity
- Fulfilling responsibility towards society
Working Notes
WN 1 Calculation of Gaining Ratio
Old Ratio (P, Q and R) = 3:2:1
New Ratio (P and R) =1:1
Gaining Ratio = New Ratio – Old Ratio
WN2 Adjustment of Goodwill
Total Goodwill of the Firm = 1,50,000
It is to be adjusted by the Gaining partners i.e. only by R
Page No 5.85:
Question 35:
Revaluation Account |
||||
Dr. |
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Stock |
10,000 |
Plant & Machinery |
1,00,000 |
|
Debtors |
15,000 |
|
||
Profit on Revaluation transferred to: |
|
|
|
|
P |
37,500 |
|
|
|
Q |
25,000 |
|
|
|
R |
12,500 |
75,000 |
|
|
|
1,00,000 |
|
1,00,000 |
|
|
|
|
|
Partners’ Capital Account |
|||||||
Dr. |
Cr. |
||||||
Particulars |
P |
Q |
R |
Particulars |
P |
Q |
R |
Q’s Capital |
– |
– |
50,000 |
Balance b/d |
2,00,000 |
1,50,000 |
1,00,000 |
Q’s Loan |
– |
2,25,000 |
– |
Revaluation A/c (Profit) |
37,500 |
25,000 |
12,500 |
Balance c/d |
2,37,500 |
– |
62,500 |
R’s Capital |
– |
50,000 |
– |
|
2,37,500 |
2,25,000 |
1,12,500 |
|
2,37,500 |
2,25,000 |
1,12,500 |
|
|
|
|
|
|
|
|
Balance Sheet as at March 31, 2014 |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Creditors |
50,000 |
Plant and Machinery (2,00,000 + 1,00,00) |
3,00,000 |
|
Q’s Loan |
2,25,000 |
Stock (1,00,000 – 10,000) |
90,000 |
|
Capital A/c : |
|
Debtors (1,00,000 – 15,000) |
85,000 |
|
P |
2,37,500 |
|
Cash |
1,00,000 |
R |
62,500 |
3,00,000 |
|
|
|
5,75,000 |
|
5,75,000 |
|
|
|
|
|
Values involved are:
- Charity
- Fulfilling responsibility towards society
Working Notes
WN 1 Calculation of Gaining Ratio
Old Ratio (P, Q and R) = 3:2:1
New Ratio (P and R) =1:1
Gaining Ratio = New Ratio – Old Ratio
WN2 Adjustment of Goodwill
Total Goodwill of the Firm = 1,50,000
It is to be adjusted by the Gaining partners i.e. only by R
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Plant (30,000 × 10%) |
3,000 |
Expenses Owing (2,000 – 1,500) |
500 |
|
|
|
Patents (4,000 – 3,000) |
1,000 |
|
|
|
Loss transferred to: |
|
|
|
|
Manoj’s Capital A/c |
750 |
|
|
|
Naveen’s Capital A/c |
500 |
|
|
|
Deepak’s Capital A/c |
250 |
1,500 |
|
3,000 |
|
3,000 |
|
|
|
|
|
Partners’ Capital Account |
||||||||
Dr. |
|
Cr. |
||||||
Particulars |
Manoj |
Naveen |
Deepak |
Particulars |
Manoj |
Naveen |
Deepak |
|
Revaluation |
750 |
500 |
250 |
Balance b/d |
12,000 |
10,000 |
9,000 |
|
Naveen’s Capital A/c |
1,200 |
|
2,800 |
General Reserve |
3,000 |
2,000 |
1,000 |
|
Naveen’s Loan A/c |
|
15,500 |
|
Manoj Capital A/c |
|
1,200 |
|
|
Balance c/d |
13,050 |
|
6,950 |
Deepak Capital A/c |
|
2,800 |
|
|
|
15,000 |
16,000 |
10,000 |
|
15,000 |
16,000 |
10,000 |
|
|
|
|
|
Balance b/d |
13,050 |
|
6,950 |
|
Balance c/d |
15,000 |
|
10,000 |
Cash A/c |
1,950 |
|
3,050 |
|
|
15,000 |
|
10,000 |
|
15,000 |
|
10,000 |
|
|
|
|
|
|
|
|
|
Balance Sheet |
||||
as on March 31, 2014 |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Expense Owing |
1,500 |
Plant (30,000 – 3,000) |
27,000 |
|
Bills Payable |
5,000 |
Patents |
4,000 |
|
Creditors |
10,000 |
Debtors |
9,500 |
|
Naveen’s Loan |
15,500 |
Stock |
11,000 |
|
Capital A/cs: |
|
Cash (WN 4) |
5,500 |
|
Manoj |
15,000 |
|
|
|
Deepak |
10,000 |
25,000 |
|
|
|
57,000 |
|
57,000 |
|
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio = 3 : 2 : 1
Naveen retires from the firm.
New Ratio = 3 : 2
Gaining Ratio = New Ratio – Old Ratio
∴ Gaining Ratio = 3: 7
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 12,000
Naveen’s Share of Goodwill =
This share of goodwill is to be distributed between Manoj and Deepak in their gaining ratio (i.e.3 : 7).
WN 3 Adjustment of Capital
WN 4
Cash Account |
|||||
Dr. |
Cr. |
||||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||
Balance b/d |
500 |
|
|
||
Manoj’s Capital |
1,950 |
|
|
||
Deepak’s Capital |
3,050 |
Balance c/d |
5,500 |
||
|
5,500 |
|
5,500 |
||
Page No 5.86:
Question 36:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Plant (30,000 × 10%) |
3,000 |
Expenses Owing (2,000 – 1,500) |
500 |
|
|
|
Patents (4,000 – 3,000) |
1,000 |
|
|
|
Loss transferred to: |
|
|
|
|
Manoj’s Capital A/c |
750 |
|
|
|
Naveen’s Capital A/c |
500 |
|
|
|
Deepak’s Capital A/c |
250 |
1,500 |
|
3,000 |
|
3,000 |
|
|
|
|
|
Partners’ Capital Account |
||||||||
Dr. |
|
Cr. |
||||||
Particulars |
Manoj |
Naveen |
Deepak |
Particulars |
Manoj |
Naveen |
Deepak |
|
Revaluation |
750 |
500 |
250 |
Balance b/d |
12,000 |
10,000 |
9,000 |
|
Naveen’s Capital A/c |
1,200 |
|
2,800 |
General Reserve |
3,000 |
2,000 |
1,000 |
|
Naveen’s Loan A/c |
|
15,500 |
|
Manoj Capital A/c |
|
1,200 |
|
|
Balance c/d |
13,050 |
|
6,950 |
Deepak Capital A/c |
|
2,800 |
|
|
|
15,000 |
16,000 |
10,000 |
|
15,000 |
16,000 |
10,000 |
|
|
|
|
|
Balance b/d |
13,050 |
|
6,950 |
|
Balance c/d |
15,000 |
|
10,000 |
Cash A/c |
1,950 |
|
3,050 |
|
|
15,000 |
|
10,000 |
|
15,000 |
|
10,000 |
|
|
|
|
|
|
|
|
|
Balance Sheet |
||||
as on March 31, 2014 |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Expense Owing |
1,500 |
Plant (30,000 – 3,000) |
27,000 |
|
Bills Payable |
5,000 |
Patents |
4,000 |
|
Creditors |
10,000 |
Debtors |
9,500 |
|
Naveen’s Loan |
15,500 |
Stock |
11,000 |
|
Capital A/cs: |
|
Cash (WN 4) |
5,500 |
|
Manoj |
15,000 |
|
|
|
Deepak |
10,000 |
25,000 |
|
|
|
57,000 |
|
57,000 |
|
|
|
|
|
Working Notes:
WN 1 Calculation of Gaining Ratio
Old Ratio = 3 : 2 : 1
Naveen retires from the firm.
New Ratio = 3 : 2
Gaining Ratio = New Ratio – Old Ratio
∴ Gaining Ratio = 3: 7
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 12,000
Naveen’s Share of Goodwill =
This share of goodwill is to be distributed between Manoj and Deepak in their gaining ratio (i.e.3 : 7).
WN 3 Adjustment of Capital
WN 4
Cash Account |
|||||
Dr. |
Cr. |
||||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||
Balance b/d |
500 |
|
|
||
Manoj’s Capital |
1,950 |
|
|
||
Deepak’s Capital |
3,050 |
Balance c/d |
5,500 |
||
|
5,500 |
|
5,500 |
||
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Stock (4,000 ×6%) |
240 |
Factory Building (12,500 × 20%) |
2,500 |
|
Provision for Doubtful Debts (125 – 50) |
75 |
|
|
|
Reserve for Legal Charges |
385 |
|
|
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
800 |
|
|
|
B’s Capital A/c |
600 |
|
|
|
C’s Capital A/c |
400 |
1,800 |
|
|
|
2,500 |
|
2,500 |
|
|
|
|
|
Partners’ Capital Account |
|||||||
Dr. | Cr. | ||||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
B’s Capital A/c (Goodwill) |
1,200 |
|
600 |
Balance b/d |
10,000 |
7,500 |
5,000 |
|
|
|
|
Revaluation A/c |
800 |
600 |
400 |
B’s Loan |
|
9,900 |
|
A’s Capital A/c (Goodwill) |
|
1,200 |
|
|
|
|
|
C’s Capital A/c (Goodwill) |
|
600 |
|
Balance c/d |
9,600 |
|
4,800 |
|
|
|
|
|
10,800 |
9,900 |
5,400 |
|
10,800 |
9,900 |
5,400 |
Cash A/c |
266 |
|
134 |
Balance b/d |
9,600 |
|
4,800 |
Balance c/d (WN 3) |
9,334 |
|
4,666 |
|
|
|
|
|
9,600 |
|
4,800 |
|
9,600 |
|
4,800 |
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on March 31, 2014 (after B’s retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Bills Payable |
1,000 |
Bank Balance |
2,350 |
||
Sundry Creditors |
2,450 |
Debtors |
2,500 |
|
|
Reserve for Legal Charges |
385 |
Less: Provision for Doubtful Debts |
(125) |
2,375 |
|
B’s Loan |
9,900 |
Stock (4,000 – 240) |
3,760 |
||
Capital A/cs: |
|
Plant and Machinery |
4,250 |
||
A |
9,334 |
|
Factory Building (12,500 + 12,500) |
15,000 |
|
C |
4,666 |
14,000 |
|
|
|
|
27,735 |
|
27,735 |
||
|
|
|
|
Bank Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
2,750 |
A’s Capital A/c |
266 |
|
|
B’s Capital A/c |
134 |
|
|
Balance c/d |
2,350 |
|
2,750 |
|
2,750 |
|
|
|
|
Working Notes:
WN 1 Calculation of Profit Sharing Ratio
B retires from the firm.
∴New Ratio (A and C) = 4 : 2 or 2 : 1 and
Gaining Ratio = 4 : 2 or 2 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 5,400
B’s Share of Goodwill =
This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 2 : 1).
WN 3 Adjustment of Partners’ Capital after B’s Retirement
Total Capital of the New Firm (after B’s retirement) = Rs 14,000
New Ratio = 2 : 1
Page No 5.86:
Question 37:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Stock (4,000 ×6%) |
240 |
Factory Building (12,500 × 20%) |
2,500 |
|
Provision for Doubtful Debts (125 – 50) |
75 |
|
|
|
Reserve for Legal Charges |
385 |
|
|
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
800 |
|
|
|
B’s Capital A/c |
600 |
|
|
|
C’s Capital A/c |
400 |
1,800 |
|
|
|
2,500 |
|
2,500 |
|
|
|
|
|
Partners’ Capital Account |
|||||||
Dr. | Cr. | ||||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
B’s Capital A/c (Goodwill) |
1,200 |
|
600 |
Balance b/d |
10,000 |
7,500 |
5,000 |
|
|
|
|
Revaluation A/c |
800 |
600 |
400 |
B’s Loan |
|
9,900 |
|
A’s Capital A/c (Goodwill) |
|
1,200 |
|
|
|
|
|
C’s Capital A/c (Goodwill) |
|
600 |
|
Balance c/d |
9,600 |
|
4,800 |
|
|
|
|
|
10,800 |
9,900 |
5,400 |
|
10,800 |
9,900 |
5,400 |
Cash A/c |
266 |
|
134 |
Balance b/d |
9,600 |
|
4,800 |
Balance c/d (WN 3) |
9,334 |
|
4,666 |
|
|
|
|
|
9,600 |
|
4,800 |
|
9,600 |
|
4,800 |
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on March 31, 2014 (after B’s retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Bills Payable |
1,000 |
Bank Balance |
2,350 |
||
Sundry Creditors |
2,450 |
Debtors |
2,500 |
|
|
Reserve for Legal Charges |
385 |
Less: Provision for Doubtful Debts |
(125) |
2,375 |
|
B’s Loan |
9,900 |
Stock (4,000 – 240) |
3,760 |
||
Capital A/cs: |
|
Plant and Machinery |
4,250 |
||
A |
9,334 |
|
Factory Building (12,500 + 12,500) |
15,000 |
|
C |
4,666 |
14,000 |
|
|
|
|
27,735 |
|
27,735 |
||
|
|
|
|
Bank Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
2,750 |
A’s Capital A/c |
266 |
|
|
B’s Capital A/c |
134 |
|
|
Balance c/d |
2,350 |
|
2,750 |
|
2,750 |
|
|
|
|
Working Notes:
WN 1 Calculation of Profit Sharing Ratio
B retires from the firm.
∴New Ratio (A and C) = 4 : 2 or 2 : 1 and
Gaining Ratio = 4 : 2 or 2 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 5,400
B’s Share of Goodwill =
This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 2 : 1).
WN 3 Adjustment of Partners’ Capital after B’s Retirement
Total Capital of the New Firm (after B’s retirement) = Rs 14,000
New Ratio = 2 : 1
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Provision for Douibtful Debts (500 – 200) |
300 |
Prepaid Insurance |
1,000 |
|
Machinery (24,000 × 5%) |
1,200 |
Freehold Premises |
5,000 |
|
Outstanding Workmen’s Compensation |
1,500 |
(50,000 × 10%) |
|
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
1,500 |
|
|
|
B’s Capital A/c |
1,000 |
|
|
|
C’s Capital A/c |
500 |
3,000 |
|
|
|
6,000 |
|
6,000 |
|
|
|
|
|
Partners’ Capital Account |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
B’s Capital A/c (Goodwill) |
4,500 |
|
1,500 |
Balance b/d |
45,000 |
30,000 |
15,000 |
Bank A/c |
|
5,000 |
|
Revaluation A/c (Profit) |
1,500 |
1,000 |
500 |
B’s Loan A/c |
|
32,000 |
|
A’s Capital A/c (Goodwill) |
|
4,500 |
|
Balance c/d |
42,000 |
|
14,000 |
C’s Capital A/c (Goodwill) |
|
1,500 |
|
|
46,500 |
37,000 |
15,500 |
|
46,500 |
37,000 |
15,500 |
|
|
|
|
Balance b/d |
42,000 |
|
14,000 |
Balance c/d (WN 3) |
45,000 |
|
15,000 |
Cash A/c |
3,000 |
|
1,000 |
|
45,000 |
|
15,000 |
|
45,000 |
|
15,000 |
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on March 31, 2014 (after B’s retirement) |
|||||
|
|
|
|||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Creditors |
10,800 |
Cash at Bank |
12,000 |
||
Bills Payable |
5,000 |
Debtors |
10,000 |
|
|
Outstanding Workmen Compensation |
1,500 |
Less: Provision for Doubtful Debts |
(500) |
9,500 |
|
B’s Loan |
32,000 |
Stock |
9,000 |
||
Capital A/cs: |
|
Machinery (24,000 – 1,200) |
22,800 |
||
A |
45,000 |
|
Freehold Premises (50,000 + 5,000) |
55,000 |
|
C |
15,000 |
60,000 |
Prepaid Insurance |
1,000 |
|
|
1,09,300 |
|
1,09,300 |
||
|
|
|
|
Bank Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
13,000 |
B’s Capital A/c |
5,000 |
A’s Capital A/c |
3,000 |
Balance c/d |
12,000 |
C’s Capital A/c |
1,000 |
|
|
|
17,000 |
|
17,000 |
|
|
|
|
Working Notes:
WN 1 Calculation of Profit Sharing Ratio
B retires from the firm.
∴New Ratio (A and C) = 3 : 1 and
Gaining Ratio = 3 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 18,000
B’s Share of Goodwill =
This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 3 : 1).
WN 3 Adjustment of Partners’ Capital after B’s Retirement
Total Capital of the New Firm (after B’s retirement) = Rs 60,000
New Ratio = 3 : 1
Page No 5.87:
Question 38:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Provision for Douibtful Debts (500 – 200) |
300 |
Prepaid Insurance |
1,000 |
|
Machinery (24,000 × 5%) |
1,200 |
Freehold Premises |
5,000 |
|
Outstanding Workmen’s Compensation |
1,500 |
(50,000 × 10%) |
|
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
1,500 |
|
|
|
B’s Capital A/c |
1,000 |
|
|
|
C’s Capital A/c |
500 |
3,000 |
|
|
|
6,000 |
|
6,000 |
|
|
|
|
|
Partners’ Capital Account |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
B’s Capital A/c (Goodwill) |
4,500 |
|
1,500 |
Balance b/d |
45,000 |
30,000 |
15,000 |
Bank A/c |
|
5,000 |
|
Revaluation A/c (Profit) |
1,500 |
1,000 |
500 |
B’s Loan A/c |
|
32,000 |
|
A’s Capital A/c (Goodwill) |
|
4,500 |
|
Balance c/d |
42,000 |
|
14,000 |
C’s Capital A/c (Goodwill) |
|
1,500 |
|
|
46,500 |
37,000 |
15,500 |
|
46,500 |
37,000 |
15,500 |
|
|
|
|
Balance b/d |
42,000 |
|
14,000 |
Balance c/d (WN 3) |
45,000 |
|
15,000 |
Cash A/c |
3,000 |
|
1,000 |
|
45,000 |
|
15,000 |
|
45,000 |
|
15,000 |
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on March 31, 2014 (after B’s retirement) |
|||||
|
|
|
|||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Creditors |
10,800 |
Cash at Bank |
12,000 |
||
Bills Payable |
5,000 |
Debtors |
10,000 |
|
|
Outstanding Workmen Compensation |
1,500 |
Less: Provision for Doubtful Debts |
(500) |
9,500 |
|
B’s Loan |
32,000 |
Stock |
9,000 |
||
Capital A/cs: |
|
Machinery (24,000 – 1,200) |
22,800 |
||
A |
45,000 |
|
Freehold Premises (50,000 + 5,000) |
55,000 |
|
C |
15,000 |
60,000 |
Prepaid Insurance |
1,000 |
|
|
1,09,300 |
|
1,09,300 |
||
|
|
|
|
Bank Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
13,000 |
B’s Capital A/c |
5,000 |
A’s Capital A/c |
3,000 |
Balance c/d |
12,000 |
C’s Capital A/c |
1,000 |
|
|
|
17,000 |
|
17,000 |
|
|
|
|
Working Notes:
WN 1 Calculation of Profit Sharing Ratio
B retires from the firm.
∴New Ratio (A and C) = 3 : 1 and
Gaining Ratio = 3 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 18,000
B’s Share of Goodwill =
This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 3 : 1).
WN 3 Adjustment of Partners’ Capital after B’s Retirement
Total Capital of the New Firm (after B’s retirement) = Rs 60,000
New Ratio = 3 : 1
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Stock (32,000 × 6%) |
1,920 |
Building (1,00,000 × 20%) |
20,000 |
|
Provision for Doubtful Debts (1,000 – 400) |
600 |
|
|
|
Provision for Legal Charges |
3,080 |
|
|
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
6,400 |
|
|
|
B’s Capital A/c |
4,800 |
|
|
|
C’s Capital A/c |
3,200 |
14,400 |
|
|
|
20,000 |
|
20,000 |
|
|
|
|
|
Partners’ Capital Account |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
B’s Capital A/c (Goodwill) |
7,800 |
|
6,600 |
Balance b/d |
80,000 |
60,000 |
40,000 |
B’s Loan |
|
79,200 |
|
Revaluation A/c (Profit) |
6,400 |
4,800 |
3,200 |
Balance c/d |
78,600 |
|
36,600 |
A’s Capital A/c (Goodwill) |
|
7,800 |
|
|
|
|
|
B’s Capital A/c (Goodwill) |
|
6,600 |
|
|
86,400 |
79,200 |
43,200 |
|
86,400 |
79,200 |
43,200 |
Cash A/c |
8,600 |
|
|
Balance b/d |
78,600 |
|
36,600 |
Balance c/d (WN 3) |
70,000 |
|
42,000 |
Cash A/c |
|
|
5,400 |
|
78,600 |
|
42,000 |
|
78,600 |
|
42,000 |
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on April 01,2014 (after B’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Creditors |
27,600 |
Cash at Bank |
18,800 |
||
Provision for Legal Charges |
3,080 |
Debtors |
20,000 |
|
|
B’s Loan |
79,200 |
Less: Provision for Doubtful Debts |
(1,000) |
19,000 |
|
Capital A/cs: |
|
Stock (32,000 – 1,920) |
30,080 |
||
A |
70,000 |
|
Machinery |
34,000 |
|
C |
42,000 |
1,12,000 |
Building (1,00,000 + 20,000) |
1,20,000 |
|
|
2,21,880 |
|
2,21,880 |
||
|
|
|
|
Bank Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
22,000 |
A’s Capital A/c |
8,600 |
C’s Capital A/c |
5,400 |
Balance c/d |
18,800 |
|
27,400 |
|
27,400 |
|
|
|
|
Working Notes:
WN 1 Calculation of Profit Sharing Ratio
B retires from the firm.
New Ratio (A and C) = 5 : 3
Gaining Ratio = New Ratio − Old Ratio
∴Gaining Ratio = 13 : 11
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 43,200
B’s Share of Goodwill =
This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 13 : 11).
WN 3 Adjustment of Partners’ Capital after B’s Retirement
Total Capital of the New Firm (after B’s retirement) = Rs 1,12,000
New Ratio = 5 : 3
Page No 5.87:
Question 39:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Stock (32,000 × 6%) |
1,920 |
Building (1,00,000 × 20%) |
20,000 |
|
Provision for Doubtful Debts (1,000 – 400) |
600 |
|
|
|
Provision for Legal Charges |
3,080 |
|
|
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
6,400 |
|
|
|
B’s Capital A/c |
4,800 |
|
|
|
C’s Capital A/c |
3,200 |
14,400 |
|
|
|
20,000 |
|
20,000 |
|
|
|
|
|
Partners’ Capital Account |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
B’s Capital A/c (Goodwill) |
7,800 |
|
6,600 |
Balance b/d |
80,000 |
60,000 |
40,000 |
B’s Loan |
|
79,200 |
|
Revaluation A/c (Profit) |
6,400 |
4,800 |
3,200 |
Balance c/d |
78,600 |
|
36,600 |
A’s Capital A/c (Goodwill) |
|
7,800 |
|
|
|
|
|
B’s Capital A/c (Goodwill) |
|
6,600 |
|
|
86,400 |
79,200 |
43,200 |
|
86,400 |
79,200 |
43,200 |
Cash A/c |
8,600 |
|
|
Balance b/d |
78,600 |
|
36,600 |
Balance c/d (WN 3) |
70,000 |
|
42,000 |
Cash A/c |
|
|
5,400 |
|
78,600 |
|
42,000 |
|
78,600 |
|
42,000 |
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
as on April 01,2014 (after B’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Creditors |
27,600 |
Cash at Bank |
18,800 |
||
Provision for Legal Charges |
3,080 |
Debtors |
20,000 |
|
|
B’s Loan |
79,200 |
Less: Provision for Doubtful Debts |
(1,000) |
19,000 |
|
Capital A/cs: |
|
Stock (32,000 – 1,920) |
30,080 |
||
A |
70,000 |
|
Machinery |
34,000 |
|
C |
42,000 |
1,12,000 |
Building (1,00,000 + 20,000) |
1,20,000 |
|
|
2,21,880 |
|
2,21,880 |
||
|
|
|
|
Bank Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
22,000 |
A’s Capital A/c |
8,600 |
C’s Capital A/c |
5,400 |
Balance c/d |
18,800 |
|
27,400 |
|
27,400 |
|
|
|
|
Working Notes:
WN 1 Calculation of Profit Sharing Ratio
B retires from the firm.
New Ratio (A and C) = 5 : 3
Gaining Ratio = New Ratio − Old Ratio
∴Gaining Ratio = 13 : 11
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 43,200
B’s Share of Goodwill =
This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 13 : 11).
WN 3 Adjustment of Partners’ Capital after B’s Retirement
Total Capital of the New Firm (after B’s retirement) = Rs 1,12,000
New Ratio = 5 : 3
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Machinery (30,000 × 10%) |
3,000 |
Freehold Premises (40,000 × 20%) |
8,000 |
|
Furniture (12,000 × 7%) |
840 |
Stock (22,000 × 15%) |
3,300 |
|
Provision for Doubtful Debts (1,500 – 1,000) |
500 |
|
|
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
3,480 |
|
|
|
Y’s Capital A/c |
1,160 |
|
|
|
Z’s Capital A/c |
2,320 |
6,960 |
|
|
|
11,300 |
|
11,300 |
|
|
|
|
|
Partner’s Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Z’s Capital A/c |
5,250 |
1,750 |
|
Balance b/d |
30,000 |
20,000 |
28,000 |
|
|
|
|
General Reserve |
6,000 |
2,000 |
4,000 |
Z’s Loan A/c |
|
|
41,320 |
X’s Capital A/c (Goodwill) |
|
|
5,250 |
|
|
|
|
Y’s Capital A/c (Goodwill) |
|
|
1,750 |
Balance c/d |
34,230 |
21,410 |
|
Revaluation A/c (Profit) |
3,480 |
1,160 |
2,320 |
|
39,480 |
23,160 |
41,320 |
|
39,480 |
23,160 |
41,320 |
Y’s Current A/c |
|
7,500 |
|
Balance b/d |
34,230 |
21,410 |
|
Balance c/d (WN 3) |
41,730 |
13,910 |
|
X’s Current A/c |
7,500 |
|
|
|
41,730 |
21,410 |
|
|
41,730 |
21,410 |
|
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Bills Payable |
12,000 |
Freehold Premises (40,000 + 8,000) |
48,000 |
||
Sundry Creditors |
28,000 |
Machinery (30,000 – 3,000) |
27,000 |
||
Z’s Loan |
41,320 |
Furniture (12,000 – 840) |
11,160 |
||
Capital A/cs: |
|
Stock (22,000 + 3,300) |
25,300 |
||
X |
41,730 |
|
Sundry Debtors |
20,000 |
|
Y |
13,910 |
55,640 |
Less: Provision for Doubtful Debts |
(1,500) |
18,500 |
Y’s Current A/c |
7,500 |
Cash |
7,000 |
||
|
|
X’s Current A/c |
7,500 |
||
|
1,44,460 |
|
1,44,460 |
||
|
|
|
|
Working Notes:
WN 1 Calculation of Profit Sharing Ratio
Old Ratio (X, Y and Z) = 3 : 1 : 2
Z retires from the firm.
∴New Ratio (X and Y) = 3 : 1 and
Gaining Ratio = 3 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 21,000
Z’s Share of Goodwill =
This share of goodwill is to be distributed between X and Y in their gaining ratio (i.e. 3 : 1).
WN 3 Adjustment of Partners’ Capital after Z’s Retirement
Combined Capital of X and Y after all adjustments = 34,230 + 21,410 = Rs. 55,640
New Ratio = 3 : 1
Page No 5.88:
Question 40:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Machinery (30,000 × 10%) |
3,000 |
Freehold Premises (40,000 × 20%) |
8,000 |
|
Furniture (12,000 × 7%) |
840 |
Stock (22,000 × 15%) |
3,300 |
|
Provision for Doubtful Debts (1,500 – 1,000) |
500 |
|
|
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
3,480 |
|
|
|
Y’s Capital A/c |
1,160 |
|
|
|
Z’s Capital A/c |
2,320 |
6,960 |
|
|
|
11,300 |
|
11,300 |
|
|
|
|
|
Partner’s Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Z’s Capital A/c |
5,250 |
1,750 |
|
Balance b/d |
30,000 |
20,000 |
28,000 |
|
|
|
|
General Reserve |
6,000 |
2,000 |
4,000 |
Z’s Loan A/c |
|
|
41,320 |
X’s Capital A/c (Goodwill) |
|
|
5,250 |
|
|
|
|
Y’s Capital A/c (Goodwill) |
|
|
1,750 |
Balance c/d |
34,230 |
21,410 |
|
Revaluation A/c (Profit) |
3,480 |
1,160 |
2,320 |
|
39,480 |
23,160 |
41,320 |
|
39,480 |
23,160 |
41,320 |
Y’s Current A/c |
|
7,500 |
|
Balance b/d |
34,230 |
21,410 |
|
Balance c/d (WN 3) |
41,730 |
13,910 |
|
X’s Current A/c |
7,500 |
|
|
|
41,730 |
21,410 |
|
|
41,730 |
21,410 |
|
|
|
|
|
|
|
|
|
Balance Sheet |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Bills Payable |
12,000 |
Freehold Premises (40,000 + 8,000) |
48,000 |
||
Sundry Creditors |
28,000 |
Machinery (30,000 – 3,000) |
27,000 |
||
Z’s Loan |
41,320 |
Furniture (12,000 – 840) |
11,160 |
||
Capital A/cs: |
|
Stock (22,000 + 3,300) |
25,300 |
||
X |
41,730 |
|
Sundry Debtors |
20,000 |
|
Y |
13,910 |
55,640 |
Less: Provision for Doubtful Debts |
(1,500) |
18,500 |
Y’s Current A/c |
7,500 |
Cash |
7,000 |
||
|
|
X’s Current A/c |
7,500 |
||
|
1,44,460 |
|
1,44,460 |
||
|
|
|
|
Working Notes:
WN 1 Calculation of Profit Sharing Ratio
Old Ratio (X, Y and Z) = 3 : 1 : 2
Z retires from the firm.
∴New Ratio (X and Y) = 3 : 1 and
Gaining Ratio = 3 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 21,000
Z’s Share of Goodwill =
This share of goodwill is to be distributed between X and Y in their gaining ratio (i.e. 3 : 1).
WN 3 Adjustment of Partners’ Capital after Z’s Retirement
Combined Capital of X and Y after all adjustments = 34,230 + 21,410 = Rs. 55,640
New Ratio = 3 : 1
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Provision for Doubtful Debts |
1,000 |
Creditors |
6,000 |
|
Stock (18,000 × 10%) |
1,800 |
|
|
|
Furniture (30,000 × 5%) |
1,500 |
|
|
|
Outstanding Claim for Damages |
1,100 |
|
|
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
300 |
|
|
|
B’s Capital A/c |
200 |
|
|
|
C’s Capital A/c |
100 |
600 |
|
|
|
6,000 |
|
6,000 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
B’s Capital A/c (Goodwill) |
5,500 |
|
1,833 |
Balance b/d |
40,000 |
40,000 |
30,000 |
Goodwill A/c |
5,000 |
3,333 |
1,667 |
Revaluation A/c |
300 |
200 |
100 |
Cash A/c |
|
48,200 |
|
A’s Capital A/c (Goodwill) |
|
5,500 |
|
Balance c/d |
35,800 |
|
28,600 |
C’s Capital A/c (Goodwill) |
|
1,833 |
|
|
|
|
|
General Reserve |
6,000 |
4,000 |
2,000 |
|
46,300 |
51,533 |
32,100 |
|
46,300 |
51,533 |
32,100 |
|
|
|
|
|
|
|
|
Cash A/c |
|
|
2,450 |
Balance b/d |
35,800 |
|
28,600 |
Balance c/d (WN 3) |
78,450 |
|
26,150 |
Cash A/c |
42,650 |
|
|
|
78,450 |
|
28,600 |
|
78,450 |
|
28,600 |
|
|
|
|
|
|
|
|
Cash Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
18,000 |
B’s Capital A/c |
48,200 |
A’s Capital A/c |
42,650 |
C’s Capital A/c |
2,450 |
|
|
Balance c/d |
10,000 |
|
60,650 |
|
60,650 |
|
|
|
|
Balance Sheet |
|||||
as on April 01,2014 (after B’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Creditors |
24,000 |
Cash in Hand |
10,000 |
||
Bills Payable |
16,000 |
Debtors |
25,000 |
|
|
Outstanding Claim for Damages |
1,100 |
Less: Provision for Doubtful Debts |
(4,000) |
21,000 |
|
Capital A/cs: |
|
Stock |
16,200 |
||
A |
78,450 |
|
Furniture |
28,500 |
|
C |
26,150 |
1,04,600 |
Machinery |
70,000 |
|
|
1,45,700 |
|
1,45,700 |
||
|
|
|
|
Working Notes:
WN 1 Calculation of Profit Sharing Ratio
Old Ratio (A, B and C) = 3 : 2 : 1
B retires from the firm.
∴New Ratio (A and C) = 3 : 1 and
Gaining Ratio = 3 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 22,000
B’s Share of Goodwill =
This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 3 : 1).
WN 3 Adjustment of Partners’ Capital after B’s Retirement
Amount to be brought in by A and C = Cash to be paid to B + Minimum Balance of Cash − Existing Balance of Cash
= 48,200 + 10,000 − 18,000 = Rs 40,200
Combined Capital of A and C after of all adjustments = 35,800 + 28,600 = Rs 64,400
∴Total Capital of the Firm = Amount to be brought in by A and C + Combined Capital of A and C
= 40,200 + 64,400 = 1,04,600
Page No 5.88:
Question 41:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Provision for Doubtful Debts |
1,000 |
Creditors |
6,000 |
|
Stock (18,000 × 10%) |
1,800 |
|
|
|
Furniture (30,000 × 5%) |
1,500 |
|
|
|
Outstanding Claim for Damages |
1,100 |
|
|
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
300 |
|
|
|
B’s Capital A/c |
200 |
|
|
|
C’s Capital A/c |
100 |
600 |
|
|
|
6,000 |
|
6,000 |
|
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
B’s Capital A/c (Goodwill) |
5,500 |
|
1,833 |
Balance b/d |
40,000 |
40,000 |
30,000 |
Goodwill A/c |
5,000 |
3,333 |
1,667 |
Revaluation A/c |
300 |
200 |
100 |
Cash A/c |
|
48,200 |
|
A’s Capital A/c (Goodwill) |
|
5,500 |
|
Balance c/d |
35,800 |
|
28,600 |
C’s Capital A/c (Goodwill) |
|
1,833 |
|
|
|
|
|
General Reserve |
6,000 |
4,000 |
2,000 |
|
46,300 |
51,533 |
32,100 |
|
46,300 |
51,533 |
32,100 |
|
|
|
|
|
|
|
|
Cash A/c |
|
|
2,450 |
Balance b/d |
35,800 |
|
28,600 |
Balance c/d (WN 3) |
78,450 |
|
26,150 |
Cash A/c |
42,650 |
|
|
|
78,450 |
|
28,600 |
|
78,450 |
|
28,600 |
|
|
|
|
|
|
|
|
Cash Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
18,000 |
B’s Capital A/c |
48,200 |
A’s Capital A/c |
42,650 |
C’s Capital A/c |
2,450 |
|
|
Balance c/d |
10,000 |
|
60,650 |
|
60,650 |
|
|
|
|
Balance Sheet |
|||||
as on April 01,2014 (after B’s Retirement) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Creditors |
24,000 |
Cash in Hand |
10,000 |
||
Bills Payable |
16,000 |
Debtors |
25,000 |
|
|
Outstanding Claim for Damages |
1,100 |
Less: Provision for Doubtful Debts |
(4,000) |
21,000 |
|
Capital A/cs: |
|
Stock |
16,200 |
||
A |
78,450 |
|
Furniture |
28,500 |
|
C |
26,150 |
1,04,600 |
Machinery |
70,000 |
|
|
1,45,700 |
|
1,45,700 |
||
|
|
|
|
Working Notes:
WN 1 Calculation of Profit Sharing Ratio
Old Ratio (A, B and C) = 3 : 2 : 1
B retires from the firm.
∴New Ratio (A and C) = 3 : 1 and
Gaining Ratio = 3 : 1
WN 2 Adjustment of Goodwill
Goodwill of the firm = Rs 22,000
B’s Share of Goodwill =
This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 3 : 1).
WN 3 Adjustment of Partners’ Capital after B’s Retirement
Amount to be brought in by A and C = Cash to be paid to B + Minimum Balance of Cash − Existing Balance of Cash
= 48,200 + 10,000 − 18,000 = Rs 40,200
Combined Capital of A and C after of all adjustments = 35,800 + 28,600 = Rs 64,400
∴Total Capital of the Firm = Amount to be brought in by A and C + Combined Capital of A and C
= 40,200 + 64,400 = 1,04,600
Answer:
Revaluation Account |
||||
Dr. |
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Machinery A/c |
1,80,000 |
Land and Building A/c |
1,20,000 |
|
Bad Debts A/c (35,000 – 20,000) |
15,000 |
Loss on Revaluation transferred to: |
|
|
|
|
Kusum |
21,429 |
|
|
|
Sneh |
32,142 |
|
|
|
Usha |
21,429 |
75,000 |
|
1,95,000 |
|
1,95,000 |
|
|
|
|
|
Partners’ Capital Account |
|||||||
Dr. |
Cr. |
||||||
Particulars |
Kusum |
Sneh |
Usha |
Particulars |
Kusum |
Sneh |
Usha |
Revaluation A/c (Loss) |
21,429 |
32,142 |
21,429 |
Balance b/d |
4,00,000 |
6,00,000 |
4,00,000 |
Usha’s Capital A/c |
– |
– |
80,000 |
Workmen Compensation Fund |
4,286 |
6,428 |
4,286 |
Bank A/c |
1,00,000 |
– |
– |
Usha’s Capital A/c |
80,000 |
– |
– |
Kusum’s Loan A/c |
3,62,857 |
– |
– |
|
|
|
|
Balance c/d |
– |
5,74,286 |
3,02,857 |
|
|
|
|
|
4,84,286 |
6,06,428 |
4,04,286 |
|
4,84,286 |
6,06,428 |
4,04,286 |
Balance c/d |
– |
6,00,000 |
8,00,000 |
Balance b/d |
– |
5,74,286 |
3,02,857 |
|
|
|
|
Bank A/c (WN3) |
– |
25,714 |
4,97,143 |
|
– |
6,00,000 |
8,00,000 |
|
– |
6,00,000 |
8,00,000 |
|
|
|
|
|
|
|
|
Balance Sheet as at March 31, 2013 |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Creditors |
1,00,000 |
Land & Building |
5,20,000 |
|
Employee’s Provident Fund |
70,000 |
Machinery (6,00,000 – 1,80,000) |
4,20,000 |
|
Workmen’s Compensation Claim |
15,000 |
Stock |
2,00,000 |
|
Kusum’s Loan |
3,62,857 |
Sundry Debtors (2,20,000 – 35,000) |
1,85,000 |
|
Capital A/c : |
|
Bank |
6,22,857 |
|
Sneh |
6,00,000 |
|
|
|
Usha |
8,00,000 |
14,00,000 |
|
|
|
19,47,857 |
|
19,47,857 |
|
|
|
|
|
Working Notes
WN 1 Calculation of Gaining Ratio
Old Ratio (Kusum, Sneh and Usha) = 2:3:2
New Ratio (Sneh and Usha) = 3:4
Gaining Ratio = New Ratio – Old Ratio
WN2 Adjustment of Goodwill
Total Goodwill of the Firm = 2,80,000
It is to be adjusted by the Gaining partners i.e. only by Usha
WN3 Adjustment of Capital
Particulars |
Sneh |
Usha |
New Capital Balance |
6,00,000 |
8,00,000 |
Adjusted Old Capital Balance |
5,74,286 |
3,02,857 |
Cash brought in by the Partner |
25,714 |
4,97,143 |
|
|
|
WN4
Cash at Bank A/c |
|||
Dr. |
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
2,00,000 |
Kusum’s Capital A/c |
1,00,000 |
Sneh’s Capital A/c |
25,714 |
Balance c/d |
6,22,857 |
Usha’s Capital A/c |
4,97,143 |
|
|
|
7,22,857 |
|
7,22,857 |
|
|
|
|
Page No 5.89:
Question 42:
Revaluation Account |
||||
Dr. |
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Machinery A/c |
1,80,000 |
Land and Building A/c |
1,20,000 |
|
Bad Debts A/c (35,000 – 20,000) |
15,000 |
Loss on Revaluation transferred to: |
|
|
|
|
Kusum |
21,429 |
|
|
|
Sneh |
32,142 |
|
|
|
Usha |
21,429 |
75,000 |
|
1,95,000 |
|
1,95,000 |
|
|
|
|
|
Partners’ Capital Account |
|||||||
Dr. |
Cr. |
||||||
Particulars |
Kusum |
Sneh |
Usha |
Particulars |
Kusum |
Sneh |
Usha |
Revaluation A/c (Loss) |
21,429 |
32,142 |
21,429 |
Balance b/d |
4,00,000 |
6,00,000 |
4,00,000 |
Usha’s Capital A/c |
– |
– |
80,000 |
Workmen Compensation Fund |
4,286 |
6,428 |
4,286 |
Bank A/c |
1,00,000 |
– |
– |
Usha’s Capital A/c |
80,000 |
– |
– |
Kusum’s Loan A/c |
3,62,857 |
– |
– |
|
|
|
|
Balance c/d |
– |
5,74,286 |
3,02,857 |
|
|
|
|
|
4,84,286 |
6,06,428 |
4,04,286 |
|
4,84,286 |
6,06,428 |
4,04,286 |
Balance c/d |
– |
6,00,000 |
8,00,000 |
Balance b/d |
– |
5,74,286 |
3,02,857 |
|
|
|
|
Bank A/c (WN3) |
– |
25,714 |
4,97,143 |
|
– |
6,00,000 |
8,00,000 |
|
– |
6,00,000 |
8,00,000 |
|
|
|
|
|
|
|
|
Balance Sheet as at March 31, 2013 |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Creditors |
1,00,000 |
Land & Building |
5,20,000 |
|
Employee’s Provident Fund |
70,000 |
Machinery (6,00,000 – 1,80,000) |
4,20,000 |
|
Workmen’s Compensation Claim |
15,000 |
Stock |
2,00,000 |
|
Kusum’s Loan |
3,62,857 |
Sundry Debtors (2,20,000 – 35,000) |
1,85,000 |
|
Capital A/c : |
|
Bank |
6,22,857 |
|
Sneh |
6,00,000 |
|
|
|
Usha |
8,00,000 |
14,00,000 |
|
|
|
19,47,857 |
|
19,47,857 |
|
|
|
|
|
Working Notes
WN 1 Calculation of Gaining Ratio
Old Ratio (Kusum, Sneh and Usha) = 2:3:2
New Ratio (Sneh and Usha) = 3:4
Gaining Ratio = New Ratio – Old Ratio
WN2 Adjustment of Goodwill
Total Goodwill of the Firm = 2,80,000
It is to be adjusted by the Gaining partners i.e. only by Usha
WN3 Adjustment of Capital
Particulars |
Sneh |
Usha |
New Capital Balance |
6,00,000 |
8,00,000 |
Adjusted Old Capital Balance |
5,74,286 |
3,02,857 |
Cash brought in by the Partner |
25,714 |
4,97,143 |
|
|
|
WN4
Cash at Bank A/c |
|||
Dr. |
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
2,00,000 |
Kusum’s Capital A/c |
1,00,000 |
Sneh’s Capital A/c |
25,714 |
Balance c/d |
6,22,857 |
Usha’s Capital A/c |
4,97,143 |
|
|
|
7,22,857 |
|
7,22,857 |
|
|
|
|
Answer:
Profit and Loss Adjustment Account |
||||
Dr. |
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Fixed Assets A/c (60,000 â 57,500) |
2,500 |
Creditors (10,000 â 8,000) |
2,000 |
|
Provision for Doubtful Debts |
5,000 |
Loss on Revaluation transferred to: |
|
|
|
|
X |
2,750 |
|
|
|
Y |
1,650 |
|
|
|
Z |
1,100 |
5,500 |
|
7,500 |
|
7,500 |
|
|
|
|
|
Partnersâ Capital Account |
|||||||
Dr. |
Cr. |
||||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Revaluation A/c (Loss) |
2,750 |
1,650 |
1,100 |
Balance b/d |
40,000 |
62,000 |
33,000 |
Xâs Capital A/c |
â |
24,000 |
16,000 |
Profit & Loss A/c |
42,500 |
25,500 |
17,000 |
Balance c/d |
1,19,750 |
61,850 |
32,900 |
Yâs Capital A/c |
24,000 |
â | â |
|
|
|
|
Zâs Capital A/c |
16,000 |
â | â |
|
1,22,500 |
87,500 |
50,000 |
|
1,22,500 |
87,500 |
50,000 |
Bank A/c |
1,19,750 |
â | â |
Balance b/d |
1,19,750 |
61,850 |
32,900 |
Balance c/d |
â |
1,18,500 |
79,000 |
Bank A/c |
â |
56,650 |
46,100 |
|
1,19,750 |
1,18,500 |
79,000 |
|
1,19,750 |
1,18,500 |
79,000 |
|
|
|
|
|
|
|
|
Working Notes
WN 1 Calculation of Gaining Ratio
Old Ratio (X, Y and Z) = 5:3:2
New Ratio (Y and Z) = 3:2
Gaining Ratio = New Ratio â Old Ratio
Hence, gaining ratio is 3 : 2.
WN2 Adjustment of Goodwill
Total Goodwill of the Firm = 80,000
To be borne by Gaining partners in their Gaining Ratio i.e. 3:2
WN3 Adjustment of Capital
Xâs Capital before adjustment = 1,19,750
Yâs Capital before adjustment = 61,850
Zâs Capital before adjustment = 32,900
Particulars |
Y |
Z |
New Capital Balance |
1,18,500 |
79,000 |
Adjusted Old Capital Balance |
61,850 |
32,900 |
Cash brought in by the Partner |
56,650 |
46,100 |
|
|
|
WN4
Cash at Bank A/c |
|||
Dr. |
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
40,000 |
Creditors |
8,000 |
Yâs Capital A/c |
56,650 |
Xâs Capital A/c |
1,19,750 |
Zâs Capital A/c |
46,100 |
Balance c/d |
15,000 |
|
1,42,750 |
|
1,42,750 |
|
|
|
|
Page No 5.90:
Question 43:
Profit and Loss Adjustment Account |
||||
Dr. |
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Fixed Assets A/c (60,000 â 57,500) |
2,500 |
Creditors (10,000 â 8,000) |
2,000 |
|
Provision for Doubtful Debts |
5,000 |
Loss on Revaluation transferred to: |
|
|
|
|
X |
2,750 |
|
|
|
Y |
1,650 |
|
|
|
Z |
1,100 |
5,500 |
|
7,500 |
|
7,500 |
|
|
|
|
|
Partnersâ Capital Account |
|||||||
Dr. |
Cr. |
||||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Revaluation A/c (Loss) |
2,750 |
1,650 |
1,100 |
Balance b/d |
40,000 |
62,000 |
33,000 |
Xâs Capital A/c |
â |
24,000 |
16,000 |
Profit & Loss A/c |
42,500 |
25,500 |
17,000 |
Balance c/d |
1,19,750 |
61,850 |
32,900 |
Yâs Capital A/c |
24,000 |
â | â |
|
|
|
|
Zâs Capital A/c |
16,000 |
â | â |
|
1,22,500 |
87,500 |
50,000 |
|
1,22,500 |
87,500 |
50,000 |
Bank A/c |
1,19,750 |
â | â |
Balance b/d |
1,19,750 |
61,850 |
32,900 |
Balance c/d |
â |
1,18,500 |
79,000 |
Bank A/c |
â |
56,650 |
46,100 |
|
1,19,750 |
1,18,500 |
79,000 |
|
1,19,750 |
1,18,500 |
79,000 |
|
|
|
|
|
|
|
|
Working Notes
WN 1 Calculation of Gaining Ratio
Old Ratio (X, Y and Z) = 5:3:2
New Ratio (Y and Z) = 3:2
Gaining Ratio = New Ratio â Old Ratio
Hence, gaining ratio is 3 : 2.
WN2 Adjustment of Goodwill
Total Goodwill of the Firm = 80,000
To be borne by Gaining partners in their Gaining Ratio i.e. 3:2
WN3 Adjustment of Capital
Xâs Capital before adjustment = 1,19,750
Yâs Capital before adjustment = 61,850
Zâs Capital before adjustment = 32,900
Particulars |
Y |
Z |
New Capital Balance |
1,18,500 |
79,000 |
Adjusted Old Capital Balance |
61,850 |
32,900 |
Cash brought in by the Partner |
56,650 |
46,100 |
|
|
|
WN4
Cash at Bank A/c |
|||
Dr. |
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
40,000 |
Creditors |
8,000 |
Yâs Capital A/c |
56,650 |
Xâs Capital A/c |
1,19,750 |
Zâs Capital A/c |
46,100 |
Balance c/d |
15,000 |
|
1,42,750 |
|
1,42,750 |
|
|
|
|
Answer:
Profit for the year 2013 = Rs 1,00,000
Sales for the year 2013 = Rs 10,00,000
Sales from Jan. to March 31, 2014 = Rs 1,50,000
∴Profit from Jan. 01 to March 31, 2014 on the basis of Profit Ratio of 2012
∴C’s Profit Share (from Jan. to March 31, 2014)
Page No 5.90:
Question 44:
Profit for the year 2013 = Rs 1,00,000
Sales for the year 2013 = Rs 10,00,000
Sales from Jan. to March 31, 2014 = Rs 1,50,000
∴Profit from Jan. 01 to March 31, 2014 on the basis of Profit Ratio of 2012
∴C’s Profit Share (from Jan. to March 31, 2014)
Answer:
Profit for the year 2011 before adjusting bad debts = Rs 14,000
Bad debts = Rs 2,000
Profits after adjusting bad debts= Rs (14,000 – 2,000) = Rs 12,000
Proportionate profits till 31st, March 2012
B’s share of profit (from Jan 01 till 31 March, 2012) is Rs 1,000
Page No 5.90:
Question 45:
Profit for the year 2011 before adjusting bad debts = Rs 14,000
Bad debts = Rs 2,000
Profits after adjusting bad debts= Rs (14,000 – 2,000) = Rs 12,000
Proportionate profits till 31st, March 2012
B’s share of profit (from Jan 01 till 31 March, 2012) is Rs 1,000
Answer:
PK’s Profit Share (from Jan. to May 31, 2012)
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Profit and Loss Suspense A/c |
Dr. |
|
1,875 |
|
To PK’s Capital A/c |
|
|
1,875 |
|
(PK’s profit share credited to his capital account ) |
|
|
|
Page No 5.90:
Question 46:
PK’s Profit Share (from Jan. to May 31, 2012)
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Profit and Loss Suspense A/c |
Dr. |
|
1,875 |
|
To PK’s Capital A/c |
|
|
1,875 |
|
(PK’s profit share credited to his capital account ) |
|
|
|
Answer:
Joshi’s Profit Share (from April 01 to May 31, 2014)
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Profit and Loss Suspense A/c |
Dr. |
|
444 |
|
To Joshi’s Capital A/c |
|
|
444 |
|
(Joshi’s profit share credited to his capital account ) |
|
|
|
Page No 5.90:
Question 47:
Joshi’s Profit Share (from April 01 to May 31, 2014)
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Profit and Loss Suspense A/c |
Dr. |
|
444 |
|
To Joshi’s Capital A/c |
|
|
444 |
|
(Joshi’s profit share credited to his capital account ) |
|
|
|
Answer:
Profit for the year 2011 = Rs 80,000
Sales for the year 2011 = Rs 4,00,000
∴Ratio of Profit to Sales in 2011
∴Profit from Jan. 01 to March 31, 2012 on the basis of Profit Ratio of 2011
∴Deceased Paertner’s Profit Share (from Jan. 01 to March 31, 2012)
Page No 5.90:
Question 48:
Profit for the year 2011 = Rs 80,000
Sales for the year 2011 = Rs 4,00,000
∴Ratio of Profit to Sales in 2011
∴Profit from Jan. 01 to March 31, 2012 on the basis of Profit Ratio of 2011
∴Deceased Paertner’s Profit Share (from Jan. 01 to March 31, 2012)
Answer:
(a) Calculation of R’s Share of Goodwill
Profit credited to R’s Capital Account in 4 years = Net profit for last four years × R’s Share
(b)
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
P’s Capital A/c |
Dr. |
|
48,000 |
|
S’s Capital A/c |
Dr. |
|
12,000 |
|
To R’s Capital A/c |
|
|
60,000 |
|
(R’s share of goodwill adjusted ) |
|
|
|
Working Notes:
R’s Share of Goodwill = Rs 60,000
Old Ratio (P, R and S) = 4 : 3 : 1
R died.
∴Gaining Ratio = 4 : 1
This share of goodwill is to be distributed between P and S in their gaining ratio (i.e. 4 : 1)
Page No 5.90:
Question 49:
(a) Calculation of R’s Share of Goodwill
Profit credited to R’s Capital Account in 4 years = Net profit for last four years × R’s Share
(b)
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
P’s Capital A/c |
Dr. |
|
48,000 |
|
S’s Capital A/c |
Dr. |
|
12,000 |
|
To R’s Capital A/c |
|
|
60,000 |
|
(R’s share of goodwill adjusted ) |
|
|
|
Working Notes:
R’s Share of Goodwill = Rs 60,000
Old Ratio (P, R and S) = 4 : 3 : 1
R died.
∴Gaining Ratio = 4 : 1
This share of goodwill is to be distributed between P and S in their gaining ratio (i.e. 4 : 1)
Answer:
Y’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
|
Balance b/d |
6,000 |
|
|
X’s Capital A/c (Reserve) |
1,200 |
|
|
X’s Capital A/c (Goodwill) |
5,040 |
Y’s Executor’s A/c |
12,800 |
X’s Capital A/c (Profit) |
560 |
|
12,800 |
|
12,800 |
|
|
|
|
Working Notes:
WN 1
Old Ratio (X and Y) =
WN 2
WN 3 Calculation Y’s Share of Profit
Y’s Share of Profit (from Jan. 01to May 01, 2012)
WN 4 Calculation of Y’s Share of Goodwill
Y’s share of Goodwill = Y’s Profit Share in last three year
Profit for last three years = 4,200 + 3,900 + 4,500 = Rs 12,600
Page No 5.91:
Question 50:
Y’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
|
Balance b/d |
6,000 |
|
|
X’s Capital A/c (Reserve) |
1,200 |
|
|
X’s Capital A/c (Goodwill) |
5,040 |
Y’s Executor’s A/c |
12,800 |
X’s Capital A/c (Profit) |
560 |
|
12,800 |
|
12,800 |
|
|
|
|
Working Notes:
WN 1
Old Ratio (X and Y) =
WN 2
WN 3 Calculation Y’s Share of Profit
Y’s Share of Profit (from Jan. 01to May 01, 2012)
WN 4 Calculation of Y’s Share of Goodwill
Y’s share of Goodwill = Y’s Profit Share in last three year
Profit for last three years = 4,200 + 3,900 + 4,500 = Rs 12,600
Answer:
P’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Drawings A/c |
15,000 |
Balance b/d |
80,000 |
Interest on Drawings A/c |
1,200 |
Interest on Capital A/c |
1,600 |
P’s Executor’s A/c |
69,400 |
Salary (12,000 × 2/12) |
2,000 |
|
|
Profit and Loss Suspense A/c |
2,000 |
|
85,600 |
|
85,600 |
|
|
|
|
Working Notes:
WN 1 Calculation of Interest on Capital
P’s Capital Balance = Rs 80,000
Interest on Capital (for 2 months)
WN 2 Calculation of P’s Share of Profit
Profit for last year = Rs 30,000
∴P’s Share of Profit (for 2 Months)
Page No 5.91:
Question 51:
Answer:
A’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Drawings A/c |
1,500 |
Balance b/d |
10,000 |
|
|
B’s Capital A/c (Goodwill) |
6,570 |
A’s Executor’s A/c |
24160.83 |
C’s Capital A/c (Goodwill) |
6,570 |
|
|
Profit and Loss Suspense A/c |
2520.83 |
|
25660.83 |
|
25660.83 |
|
|
|
|
Working Notes:
WN 1 Calculation of Goodwill
∴Goodwill = 13,140 × 2 = Rs 26,280
WN 2 Adjustment of Goodwill
Old Ratio (A, B and C) = 4 : 2 : 2
A died.
∴New Ratio = 2 : 2 or 1 : 1 and
Gaining Ratio = 2 : 2 or 1 : 1
A’s Share of Goodwill
This share of goodwill is to be distributed between B and C in their gaining ratio (i.e. 1: 1)
WN 3 Calculation of A’s Share of Profit
A’s Profit Share = Average Profit for last 3 previous years + 10% of Average Profit (for 5 months)
Average profit for last 3 years
10% of Average Profit = 11,000 × 10% = Rs 1,100
∴A’s Profit Share = Average Profit + 10% of Average Profit
Page No 5.91:
Question 52:
A’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Drawings A/c |
1,500 |
Balance b/d |
10,000 |
|
|
B’s Capital A/c (Goodwill) |
6,570 |
A’s Executor’s A/c |
24160.83 |
C’s Capital A/c (Goodwill) |
6,570 |
|
|
Profit and Loss Suspense A/c |
2520.83 |
|
25660.83 |
|
25660.83 |
|
|
|
|
Working Notes:
WN 1 Calculation of Goodwill
∴Goodwill = 13,140 × 2 = Rs 26,280
WN 2 Adjustment of Goodwill
Old Ratio (A, B and C) = 4 : 2 : 2
A died.
∴New Ratio = 2 : 2 or 1 : 1 and
Gaining Ratio = 2 : 2 or 1 : 1
A’s Share of Goodwill
This share of goodwill is to be distributed between B and C in their gaining ratio (i.e. 1: 1)
WN 3 Calculation of A’s Share of Profit
A’s Profit Share = Average Profit for last 3 previous years + 10% of Average Profit (for 5 months)
Average profit for last 3 years
10% of Average Profit = 11,000 × 10% = Rs 1,100
∴A’s Profit Share = Average Profit + 10% of Average Profit
Answer:
Kapoor’s Account |
|||
Dr. |
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Drawings A/c |
5,000 |
Balance b/d |
40,000 |
Interest on Drawings A/c |
100 |
Interest on Capital A/c |
300 |
Balance c/d |
38,200 |
Profit and Loss Adjustment A/c |
3,000 |
|
|
|
|
|
|
|
|
|
43,300 |
|
43,300 |
|
|
|
|
Working Notes
WN1 Calculation of Interest on Capita of Kapoor till date of his death
WN2Calculation of Share of Profit of Kapoor till date of his death
WN3Calculation of Interest on Drawings
Page No 5.92:
Question 53:
Kapoor’s Account |
|||
Dr. |
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Drawings A/c |
5,000 |
Balance b/d |
40,000 |
Interest on Drawings A/c |
100 |
Interest on Capital A/c |
300 |
Balance c/d |
38,200 |
Profit and Loss Adjustment A/c |
3,000 |
|
|
|
|
|
|
|
|
|
43,300 |
|
43,300 |
|
|
|
|
Working Notes
WN1 Calculation of Interest on Capita of Kapoor till date of his death
WN2Calculation of Share of Profit of Kapoor till date of his death
WN3Calculation of Interest on Drawings
Answer:
C’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Drawings A/c |
4,500 |
Balance b/d |
15,000 |
|
|
Interest on Capital A/c |
1,350 |
|
|
Profit and Loss Suspense A/c |
2,187 |
|
|
A’s Capital A/c (Goodwill) |
3,500 |
C’s Executor’s A/c |
19,870 |
B’s Capital A/c (Goodwill) |
2,333 |
|
24,370 |
|
24,370 |
|
|
|
|
C’s Executor’s Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance c/d |
19,870 |
C’s Capital A/c |
19,870 |
|
|
|
|
|
19,870 |
|
19,870 |
|
|
|
|
Journal |
||||
Particulars |
L.F. |
Debit Particulars Rs |
Credit Amount Rs |
|
Interest on Capital A/c |
Dr. |
|
1,350 |
|
To C’s Capital A/c |
|
|
1,350 |
|
(Interest on capital allowed) |
|
|
|
|
|
|
|
|
|
Profit and Loss Suspense A/c |
Dr. |
|
2,187 |
|
To C’s Capital A/c |
|
|
2,187 |
|
(Profit transferred to C’s Capital Account) |
|
|
|
|
|
|
|
|
|
A’s Capital A/c |
Dr. |
|
3,500 |
|
B’s Capital A/c |
Dr. |
|
2,333 |
|
To C’s Capital A/c |
|
|
5,833 |
|
(C’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
C’s Capital A/c |
Dr. |
|
19,870 |
|
To C’s Executor’s A/c |
|
|
19,870 |
|
(Amount due to C after all adjustments transferred to his Executor’s Account ) |
|
|
|
Working Notes:
WN 1 Calculation of Interest on Capital
C’s Capital Balance = Rs 15,000
∴Interest on Capital (for 9 months)
WN 2 Calculation of C’s Share of Profit
WN 3 Calculation of Goodwill
Goodwill = Average Profit × No. of years purchase
= 17,500 × 2 = Rs 35,000
WN 4 Adjustment of Goodwill
Old Ratio (A, B and C) = 3 : 2 : 1
C died.
∴New Ratio (A and B) = 3 : 2 and
Gaining Ratio = 3 : 2
This share of goodwill is to be distributed between A and B in their gaining ratio (i.e. 3 : 2)
Page No 5.92:
Question 54:
C’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Drawings A/c |
4,500 |
Balance b/d |
15,000 |
|
|
Interest on Capital A/c |
1,350 |
|
|
Profit and Loss Suspense A/c |
2,187 |
|
|
A’s Capital A/c (Goodwill) |
3,500 |
C’s Executor’s A/c |
19,870 |
B’s Capital A/c (Goodwill) |
2,333 |
|
24,370 |
|
24,370 |
|
|
|
|
C’s Executor’s Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance c/d |
19,870 |
C’s Capital A/c |
19,870 |
|
|
|
|
|
19,870 |
|
19,870 |
|
|
|
|
Journal |
||||
Particulars |
L.F. |
Debit Particulars Rs |
Credit Amount Rs |
|
Interest on Capital A/c |
Dr. |
|
1,350 |
|
To C’s Capital A/c |
|
|
1,350 |
|
(Interest on capital allowed) |
|
|
|
|
|
|
|
|
|
Profit and Loss Suspense A/c |
Dr. |
|
2,187 |
|
To C’s Capital A/c |
|
|
2,187 |
|
(Profit transferred to C’s Capital Account) |
|
|
|
|
|
|
|
|
|
A’s Capital A/c |
Dr. |
|
3,500 |
|
B’s Capital A/c |
Dr. |
|
2,333 |
|
To C’s Capital A/c |
|
|
5,833 |
|
(C’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
C’s Capital A/c |
Dr. |
|
19,870 |
|
To C’s Executor’s A/c |
|
|
19,870 |
|
(Amount due to C after all adjustments transferred to his Executor’s Account ) |
|
|
|
Working Notes:
WN 1 Calculation of Interest on Capital
C’s Capital Balance = Rs 15,000
∴Interest on Capital (for 9 months)
WN 2 Calculation of C’s Share of Profit
WN 3 Calculation of Goodwill
Goodwill = Average Profit × No. of years purchase
= 17,500 × 2 = Rs 35,000
WN 4 Adjustment of Goodwill
Old Ratio (A, B and C) = 3 : 2 : 1
C died.
∴New Ratio (A and B) = 3 : 2 and
Gaining Ratio = 3 : 2
This share of goodwill is to be distributed between A and B in their gaining ratio (i.e. 3 : 2)
Answer:
Kavitaâs Capital A/c |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount (Rs) |
Particulars |
Amount (Rs) |
||
|
|
|
|
||
Kavitaâs Executorâs A/c |
1,32,100 |
Capital |
70,000 |
||
|
|
Interest on Capital |
2,100 |
||
|
|
Leenaâs Capital A/c* |
10,000 |
||
|
|
Monicaâs Capital A/c* |
30,000 |
||
|
|
Share of Reserve |
12,000 |
||
|
|
Profit Share** |
8,000 |
||
|
|
|
|
||
|
1,32,100 |
|
1,32,100 |
||
|
|
|
|
Working Note:
*Calculation of Goodwill
On the basis of 2 yrs purchase of average 3 years profit
** Sales in the year 2011-12 = 20,00,000
Profit for year 2011-12 = 2,00,000 = 10% of Sales.
Therefore, Profit for the Period 1 Apr â 30th Sep = 10% of Sales of the same period
Share of Profit to be divided = 10% of Rs 4,00,000 = Rs 40,000
Kavitaâs Share of Profit = 1/5th of Rs 40,000 = Rs 8,000
Page No 5.92:
Question 55:
Kavitaâs Capital A/c |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount (Rs) |
Particulars |
Amount (Rs) |
||
|
|
|
|
||
Kavitaâs Executorâs A/c |
1,32,100 |
Capital |
70,000 |
||
|
|
Interest on Capital |
2,100 |
||
|
|
Leenaâs Capital A/c* |
10,000 |
||
|
|
Monicaâs Capital A/c* |
30,000 |
||
|
|
Share of Reserve |
12,000 |
||
|
|
Profit Share** |
8,000 |
||
|
|
|
|
||
|
1,32,100 |
|
1,32,100 |
||
|
|
|
|
Working Note:
*Calculation of Goodwill
On the basis of 2 yrs purchase of average 3 years profit
** Sales in the year 2011-12 = 20,00,000
Profit for year 2011-12 = 2,00,000 = 10% of Sales.
Therefore, Profit for the Period 1 Apr â 30th Sep = 10% of Sales of the same period
Share of Profit to be divided = 10% of Rs 4,00,000 = Rs 40,000
Kavitaâs Share of Profit = 1/5th of Rs 40,000 = Rs 8,000
Answer:
Partners’ Capital Accounts |
|||||||||
Dr. |
|
Cr. |
|||||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
||
A’s Capital A/c |
|
2,800 |
2,800 |
Balance b/d |
10,000 |
6,000 |
4,000 |
||
|
|
|
|
Joint Life Policy |
5,000 |
2,500 |
2,500 |
||
A’s Executor’s A/c |
20,600 |
|
|
B’s Capital A/c (Goodwill) |
2,800 |
|
|
||
Balance c/d |
|
5,700 |
3,700 |
C’s Capital A/c (Goodwill) |
2,800 |
|
|
||
|
20,600 |
8,500 |
6,500 |
|
20,600 |
8,500 |
6,500 |
||
|
|
|
|
|
|
|
|
A’s Executor’s Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
A’s Loan A/c |
3,000 |
A’s Capital A/c |
20,600 |
Cash A/c |
17,600 |
|
|
|
20,600 |
|
20,600 |
|
|
|
|
Balance Sheet |
||||
as on June 01, 2012 (after A’s death) |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Sundry Creditors |
4,000 |
Sundry Debtors |
4,500 |
|
Loan |
6,600 |
Stock in Trade |
5,500 |
|
Capital A/cs: |
|
Building |
10,000 |
|
B |
5,700 |
|
|
|
C |
3,700 |
9,400 |
|
|
|
20,000 |
|
20,000 |
|
|
|
|
|
Working Notes:
WN 1 Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
∴Goodwill = Average Profit × Number of Years’ Purchase
= 5,600 × 2 = 11,200
WN 2 Adjustment of Goodwill
Old Ratio (A, B and C) =
A died.
∴New Ratio (B and C) = 1 : 1 and
Gaining Ratio = 1 : 1
A’s Share in Goodwill =
This share of goodwill is to be distributed between B and C in their gaining ratio (i.e. 1 : 1).
WN 3
Cash Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
1,000 |
A’s Executor’s A/c |
17,600 |
Insurance Co. (JLP) |
10,000 |
|
|
Loan A/c |
6,600 |
|
|
|
17,600 |
|
17,600 |
|
|
|
|
Page No 5.93:
Question 56:
Partners’ Capital Accounts |
|||||||||
Dr. |
|
Cr. |
|||||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
||
A’s Capital A/c |
|
2,800 |
2,800 |
Balance b/d |
10,000 |
6,000 |
4,000 |
||
|
|
|
|
Joint Life Policy |
5,000 |
2,500 |
2,500 |
||
A’s Executor’s A/c |
20,600 |
|
|
B’s Capital A/c (Goodwill) |
2,800 |
|
|
||
Balance c/d |
|
5,700 |
3,700 |
C’s Capital A/c (Goodwill) |
2,800 |
|
|
||
|
20,600 |
8,500 |
6,500 |
|
20,600 |
8,500 |
6,500 |
||
|
|
|
|
|
|
|
|
A’s Executor’s Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
A’s Loan A/c |
3,000 |
A’s Capital A/c |
20,600 |
Cash A/c |
17,600 |
|
|
|
20,600 |
|
20,600 |
|
|
|
|
Balance Sheet |
||||
as on June 01, 2012 (after A’s death) |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Sundry Creditors |
4,000 |
Sundry Debtors |
4,500 |
|
Loan |
6,600 |
Stock in Trade |
5,500 |
|
Capital A/cs: |
|
Building |
10,000 |
|
B |
5,700 |
|
|
|
C |
3,700 |
9,400 |
|
|
|
20,000 |
|
20,000 |
|
|
|
|
|
Working Notes:
WN 1 Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
∴Goodwill = Average Profit × Number of Years’ Purchase
= 5,600 × 2 = 11,200
WN 2 Adjustment of Goodwill
Old Ratio (A, B and C) =
A died.
∴New Ratio (B and C) = 1 : 1 and
Gaining Ratio = 1 : 1
A’s Share in Goodwill =
This share of goodwill is to be distributed between B and C in their gaining ratio (i.e. 1 : 1).
WN 3
Cash Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Balance b/d |
1,000 |
A’s Executor’s A/c |
17,600 |
Insurance Co. (JLP) |
10,000 |
|
|
Loan A/c |
6,600 |
|
|
|
17,600 |
|
17,600 |
|
|
|
|
Answer:
Chetanâs Capital A/c |
||||
Dr. |
Cr. |
|||
Particulars |
Amount (Rs) |
Particulars |
Amount (Rs) |
|
|
|
|
|
|
Chetanâs Executorâs A/c |
1,79,500 |
Capital |
1,25,000 |
|
|
|
Interest on Capital |
3,750 |
|
|
|
Babitaâs Share Capital A/c* |
16,000 |
|
|
|
Davidâs Share Capital A/c* |
8,000 |
|
|
|
Share of Reserve |
12,000 |
|
|
|
Profit Share** |
15,000 |
|
|
|
|
|
|
|
1,79,750 |
|
1,79,500 |
|
|
|
|
|
Working Note: *
**Sales in the year 2011-12 = 4,00,000
Profit for year 2011-12 = 2,00,000 = 50% of Sales.
Therefore, Profit for the Period Apr 01 to 30th Sep = 50% of Sales of the same period
Share of Profit to be divided = 50% of Rs 1,20,000 = Rs 60,000
Chetanâs Share of Profit = 1/4th of Rs 60,000 = Rs 15,000
Page No 5.93:
Question 57:
Chetanâs Capital A/c |
||||
Dr. |
Cr. |
|||
Particulars |
Amount (Rs) |
Particulars |
Amount (Rs) |
|
|
|
|
|
|
Chetanâs Executorâs A/c |
1,79,500 |
Capital |
1,25,000 |
|
|
|
Interest on Capital |
3,750 |
|
|
|
Babitaâs Share Capital A/c* |
16,000 |
|
|
|
Davidâs Share Capital A/c* |
8,000 |
|
|
|
Share of Reserve |
12,000 |
|
|
|
Profit Share** |
15,000 |
|
|
|
|
|
|
|
1,79,750 |
|
1,79,500 |
|
|
|
|
|
Working Note: *
**Sales in the year 2011-12 = 4,00,000
Profit for year 2011-12 = 2,00,000 = 50% of Sales.
Therefore, Profit for the Period Apr 01 to 30th Sep = 50% of Sales of the same period
Share of Profit to be divided = 50% of Rs 1,20,000 = Rs 60,000
Chetanâs Share of Profit = 1/4th of Rs 60,000 = Rs 15,000
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
General Reserve A/c |
Dr. |
|
10,000 |
|
To A’s Capital A/c |
|
|
|
6,000 |
To B’s Capital |
|
|
|
2,000 |
To C’s Capital A/c |
|
|
|
2,000 |
(General reserve distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
Land A/c |
Dr. |
|
1,00,000 |
|
To Revaluation A/c |
|
|
|
1,00,000 |
(Increase in value of Land transferred to Revaluation Account ) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
68,000 |
|
To Plant and Machinery A/c |
|
|
|
68,000 |
(Decrease in value of Plant and Machinery transferred to Revaluation Account )
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
32,000 |
|
To A’s Capital A/c |
|
|
|
19,200 |
To B’s Capital A/c |
|
|
|
6,400 |
To C’s Capital A/c |
|
|
|
6,400 |
(Revaluation profit distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
A’s Capital A/c |
Dr. |
|
36,000 |
|
C’s Capital A/c |
Dr. |
|
12,000 |
|
To B’s Capital A/c |
|
|
|
48,000 |
(B’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
B’s Capital A/c |
Dr. |
|
10,000 |
|
To B’s Drawings A/c |
|
|
|
10,000 |
(B’s drawing charged from his capital account) |
|
|
|
|
|
|
|
|
|
Profit and Loss Suspense A/c |
Dr. |
|
4,000 |
|
To B’s Capital A/c |
|
|
|
4,000 |
(B’s share of profit transferred to his capital account) |
|
|
|
|
|
|
|
|
|
B’s Capital A/c |
Dr. |
|
4,63,200 |
|
To B’s Executor’s A/c |
|
|
|
4,63,200 |
(Amount due to B after all adjustments transferred to his Executor’s Account)
|
|
|
|
|
|
|
|
|
|
Values involved are:
- Charity
- Fulfilling responsibility towards environment
WN 1 Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
∴Goodwill = Average Profit × Number of Years’ Purchase
= 1,20,000 × 2 = Rs 2,40,000
WN 2 Adjustment of Goodwill
Old Ratio (A, B and C) = 3 : 1 : 1
B died.
∴New Ratio (A and C) = 3 : 1 and
Gaining Ratio = 3 : 1
B’s Share in Goodwill =
This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 3 : 1).
WN 3 Calculation of B’s Share of Profit
WN 4
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Plan and Machinery |
68,000 |
Land |
1,00,000 |
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
19,200 |
|
|
|
B’s Capital A/c |
6,400 |
|
|
|
C’s Capital A/c |
6,400 |
32,000 |
|
|
|
1,00,000 |
|
1,00,000 |
|
|
|
|
|
WN 5
B’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Drawings A/c |
10,000 |
Balance b/d |
4,12,800 |
B’s Executor’s A/c |
4,63,200 |
General Reserve |
2,000 |
|
|
Profit and Loss Suspense A/c |
4,000 |
|
|
A’s Capital A/c |
36,000 |
|
|
C’s Capital A/c |
12,000 |
|
|
Revaluation A/c (Profit) |
6,400 |
|
|
|
|
|
4,73,200 |
|
4,73,200 |
|
|
|
|
Page No 5.94:
Question 58:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
General Reserve A/c |
Dr. |
|
10,000 |
|
To A’s Capital A/c |
|
|
|
6,000 |
To B’s Capital |
|
|
|
2,000 |
To C’s Capital A/c |
|
|
|
2,000 |
(General reserve distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
Land A/c |
Dr. |
|
1,00,000 |
|
To Revaluation A/c |
|
|
|
1,00,000 |
(Increase in value of Land transferred to Revaluation Account ) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
68,000 |
|
To Plant and Machinery A/c |
|
|
|
68,000 |
(Decrease in value of Plant and Machinery transferred to Revaluation Account )
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
32,000 |
|
To A’s Capital A/c |
|
|
|
19,200 |
To B’s Capital A/c |
|
|
|
6,400 |
To C’s Capital A/c |
|
|
|
6,400 |
(Revaluation profit distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
A’s Capital A/c |
Dr. |
|
36,000 |
|
C’s Capital A/c |
Dr. |
|
12,000 |
|
To B’s Capital A/c |
|
|
|
48,000 |
(B’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
B’s Capital A/c |
Dr. |
|
10,000 |
|
To B’s Drawings A/c |
|
|
|
10,000 |
(B’s drawing charged from his capital account) |
|
|
|
|
|
|
|
|
|
Profit and Loss Suspense A/c |
Dr. |
|
4,000 |
|
To B’s Capital A/c |
|
|
|
4,000 |
(B’s share of profit transferred to his capital account) |
|
|
|
|
|
|
|
|
|
B’s Capital A/c |
Dr. |
|
4,63,200 |
|
To B’s Executor’s A/c |
|
|
|
4,63,200 |
(Amount due to B after all adjustments transferred to his Executor’s Account)
|
|
|
|
|
|
|
|
|
|
Values involved are:
- Charity
- Fulfilling responsibility towards environment
WN 1 Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
∴Goodwill = Average Profit × Number of Years’ Purchase
= 1,20,000 × 2 = Rs 2,40,000
WN 2 Adjustment of Goodwill
Old Ratio (A, B and C) = 3 : 1 : 1
B died.
∴New Ratio (A and C) = 3 : 1 and
Gaining Ratio = 3 : 1
B’s Share in Goodwill =
This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 3 : 1).
WN 3 Calculation of B’s Share of Profit
WN 4
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Plan and Machinery |
68,000 |
Land |
1,00,000 |
|
Profit transferred to: |
|
|
|
|
A’s Capital A/c |
19,200 |
|
|
|
B’s Capital A/c |
6,400 |
|
|
|
C’s Capital A/c |
6,400 |
32,000 |
|
|
|
1,00,000 |
|
1,00,000 |
|
|
|
|
|
WN 5
B’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Drawings A/c |
10,000 |
Balance b/d |
4,12,800 |
B’s Executor’s A/c |
4,63,200 |
General Reserve |
2,000 |
|
|
Profit and Loss Suspense A/c |
4,000 |
|
|
A’s Capital A/c |
36,000 |
|
|
C’s Capital A/c |
12,000 |
|
|
Revaluation A/c (Profit) |
6,400 |
|
|
|
|
|
4,73,200 |
|
4,73,200 |
|
|
|
|
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Revaluation A/c |
Dr. |
|
10,000 |
|
To Machinery A/c |
|
|
10,000 |
|
(Decrease in value of Machinery transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Patents A/c |
Dr. |
|
10,000 |
|
Leasehold A/c |
Dr. |
|
25,000 |
|
To Revaluation A/c |
|
|
35,000 |
|
(Increase in value Patents and Leasehold transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
25,000 |
|
To R’s Capital A/c |
|
|
12,500 |
|
To S’s Capital A/c |
|
|
7,500 |
|
To T’s Capital A/c |
|
|
5,000 |
|
(Revaluation profit distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
R’ Capital A/c |
Dr. |
|
12,500 |
|
S’s Capital A/c |
Dr. |
|
7,500 |
|
T’s Capital A/c |
Dr. |
|
5,000 |
|
To Goodwill A/c |
|
|
25,000 |
|
(Goodwill written off among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
R’s Capital A/c |
Dr. |
|
21,875 |
|
S’s Capital A/c |
Dr. |
|
13,125 |
|
To T’s Capital A/c |
|
|
35,000 |
|
(T’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
Profit and Loss Suspense A/c |
Dr. |
|
5,000 |
|
To T’s Capital A/c |
|
|
5,000 |
|
(T’s share of profit transferred to his capital account) |
|
|
|
|
|
|
|
|
|
Workmen’s Compensation Reserve A/c |
Dr. |
|
30,000 |
|
To R’s Capital A/c |
|
|
15,000 |
|
To S’s Capital A/c |
|
|
9,000 |
|
To T’s Capital A/c |
|
|
6,000 |
|
(Workmen’s Compensation Reserve distributed among partners in their old ratio ) |
|
|
|
|
|
|
|
|
|
T’s Capital A/c |
Dr. |
|
1,21,000 |
|
To T’s Executors A/c |
|
|
1,21,000 |
|
(Amount due to T after all adjustments transferred to his Executor’s Account) |
|
|
|
|
|
|
|
|
|
T’s Executor’s A/c |
Dr. |
|
21,000 |
|
To Bank A/c |
|
|
21,000 |
|
(Amount paid to T’s Executor) |
|
|
|
|
|
|
|
|
T’s Executor’s Account |
|||||
Dr. |
|
Cr. |
|||
Date |
Particulars |
Amount Rs |
Date |
Particulars |
Amount Rs |
2012 |
|
|
2012 |
|
|
May 01 |
Cash A/c |
21,000 |
May 01 |
T’s Capital A/c |
1,21,000 |
Oct. 31 |
Cash A/c (25,000 + 5,000) |
30,000 |
Oct. 31 |
Interest (1,00,000 ×10% for 6 months) |
5,000 |
Dec. 31 |
Balance c/d |
76,250 |
Dec. 31 |
Interest (75,000 ×10% for 2 months) |
1,250 |
|
|
1,27,250 |
|
|
1,27,250 |
2013 |
|
|
2013 |
|
|
May 01 |
Cash A/c (25,000 + 1,250 + 2,500) |
28,750 |
Jan. 01 |
Balance b/d |
76,250 |
Oct. 31 |
Cash A/c (25,000 + 2,500) |
27,500 |
May 01 |
Interest (75,000 × 10% for 4 months) |
2,500 |
Dec. 31 |
Balance c/d |
25,417 |
Oct. 31 |
Interest (50,000 × 10% for 6 months) |
2,500 |
|
|
|
Dec. 31 |
Interest (25,000 × 10% for 2 months) |
417 |
|
|
81,667 |
|
|
81,667 |
2014 |
|
|
2014 |
|
|
May 01 |
Cash A/c (25,000 + 417 + 833) |
26,250 |
Jan. 01 |
Balance b/d |
25,417 |
|
|
|
May 01 |
Interest (25,000 × 10% for 4 months) |
833 |
|
|
26,250 |
|
|
26,250 |
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
∴Goodwill = Average Profit × Number of Years’ Purchase
= 70,000 × 2.5 = Rs 1,75,000
WN 2 Adjustment of Goodwill
Old Ratio (R, S and T) = 5 : 3 : 2
T died.
∴New Ratio (R and S) = 5 : 3 and
Gaining Ratio = 5 : 3
T’s Share in Goodwill =
This share of goodwill is to be distributed between R and S in their gaining ratio (i.e. 5 : 3).
WN 3 Calculation of T’s Share of Profit
Profit for 2011 = Rs 75,000
WN 4
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Machinery |
10,000 |
Patents |
10,000 |
|
Profit transferred to: |
|
Leasehold |
25,000 |
|
R’s Capital A/c |
12,500 |
|
|
|
S’s Capital A/c |
7,500 |
|
|
|
T’s Capital A/c |
5,000 |
25,000 |
|
|
|
35,000 |
|
35,000 |
|
|
|
|
|
WN 5
T’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Goodwill |
5,000 |
Balance b/d |
75,000 |
T’s Executor’s A/c |
1,21,000 |
Workmen’s Compensation Reserve |
6,000 |
|
|
Profit and Loss Suspense A/c |
5,000 |
|
|
R’s Capital A/c |
21,875 |
|
|
S’s Capital A/c |
13,125 |
|
|
Revaluation A/c (Profit) |
5,000 |
|
1,26,000 |
|
1,26,000 |
|
|
|
|
Page No 5.94:
Question 59:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Revaluation A/c |
Dr. |
|
10,000 |
|
To Machinery A/c |
|
|
10,000 |
|
(Decrease in value of Machinery transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Patents A/c |
Dr. |
|
10,000 |
|
Leasehold A/c |
Dr. |
|
25,000 |
|
To Revaluation A/c |
|
|
35,000 |
|
(Increase in value Patents and Leasehold transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
25,000 |
|
To R’s Capital A/c |
|
|
12,500 |
|
To S’s Capital A/c |
|
|
7,500 |
|
To T’s Capital A/c |
|
|
5,000 |
|
(Revaluation profit distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
R’ Capital A/c |
Dr. |
|
12,500 |
|
S’s Capital A/c |
Dr. |
|
7,500 |
|
T’s Capital A/c |
Dr. |
|
5,000 |
|
To Goodwill A/c |
|
|
25,000 |
|
(Goodwill written off among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
R’s Capital A/c |
Dr. |
|
21,875 |
|
S’s Capital A/c |
Dr. |
|
13,125 |
|
To T’s Capital A/c |
|
|
35,000 |
|
(T’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
Profit and Loss Suspense A/c |
Dr. |
|
5,000 |
|
To T’s Capital A/c |
|
|
5,000 |
|
(T’s share of profit transferred to his capital account) |
|
|
|
|
|
|
|
|
|
Workmen’s Compensation Reserve A/c |
Dr. |
|
30,000 |
|
To R’s Capital A/c |
|
|
15,000 |
|
To S’s Capital A/c |
|
|
9,000 |
|
To T’s Capital A/c |
|
|
6,000 |
|
(Workmen’s Compensation Reserve distributed among partners in their old ratio ) |
|
|
|
|
|
|
|
|
|
T’s Capital A/c |
Dr. |
|
1,21,000 |
|
To T’s Executors A/c |
|
|
1,21,000 |
|
(Amount due to T after all adjustments transferred to his Executor’s Account) |
|
|
|
|
|
|
|
|
|
T’s Executor’s A/c |
Dr. |
|
21,000 |
|
To Bank A/c |
|
|
21,000 |
|
(Amount paid to T’s Executor) |
|
|
|
|
|
|
|
|
T’s Executor’s Account |
|||||
Dr. |
|
Cr. |
|||
Date |
Particulars |
Amount Rs |
Date |
Particulars |
Amount Rs |
2012 |
|
|
2012 |
|
|
May 01 |
Cash A/c |
21,000 |
May 01 |
T’s Capital A/c |
1,21,000 |
Oct. 31 |
Cash A/c (25,000 + 5,000) |
30,000 |
Oct. 31 |
Interest (1,00,000 ×10% for 6 months) |
5,000 |
Dec. 31 |
Balance c/d |
76,250 |
Dec. 31 |
Interest (75,000 ×10% for 2 months) |
1,250 |
|
|
1,27,250 |
|
|
1,27,250 |
2013 |
|
|
2013 |
|
|
May 01 |
Cash A/c (25,000 + 1,250 + 2,500) |
28,750 |
Jan. 01 |
Balance b/d |
76,250 |
Oct. 31 |
Cash A/c (25,000 + 2,500) |
27,500 |
May 01 |
Interest (75,000 × 10% for 4 months) |
2,500 |
Dec. 31 |
Balance c/d |
25,417 |
Oct. 31 |
Interest (50,000 × 10% for 6 months) |
2,500 |
|
|
|
Dec. 31 |
Interest (25,000 × 10% for 2 months) |
417 |
|
|
81,667 |
|
|
81,667 |
2014 |
|
|
2014 |
|
|
May 01 |
Cash A/c (25,000 + 417 + 833) |
26,250 |
Jan. 01 |
Balance b/d |
25,417 |
|
|
|
May 01 |
Interest (25,000 × 10% for 4 months) |
833 |
|
|
26,250 |
|
|
26,250 |
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
∴Goodwill = Average Profit × Number of Years’ Purchase
= 70,000 × 2.5 = Rs 1,75,000
WN 2 Adjustment of Goodwill
Old Ratio (R, S and T) = 5 : 3 : 2
T died.
∴New Ratio (R and S) = 5 : 3 and
Gaining Ratio = 5 : 3
T’s Share in Goodwill =
This share of goodwill is to be distributed between R and S in their gaining ratio (i.e. 5 : 3).
WN 3 Calculation of T’s Share of Profit
Profit for 2011 = Rs 75,000
WN 4
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Machinery |
10,000 |
Patents |
10,000 |
|
Profit transferred to: |
|
Leasehold |
25,000 |
|
R’s Capital A/c |
12,500 |
|
|
|
S’s Capital A/c |
7,500 |
|
|
|
T’s Capital A/c |
5,000 |
25,000 |
|
|
|
35,000 |
|
35,000 |
|
|
|
|
|
WN 5
T’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Goodwill |
5,000 |
Balance b/d |
75,000 |
T’s Executor’s A/c |
1,21,000 |
Workmen’s Compensation Reserve |
6,000 |
|
|
Profit and Loss Suspense A/c |
5,000 |
|
|
R’s Capital A/c |
21,875 |
|
|
S’s Capital A/c |
13,125 |
|
|
Revaluation A/c (Profit) |
5,000 |
|
1,26,000 |
|
1,26,000 |
|
|
|
|
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
General Reserve A/c |
Dr. |
|
45,000 |
|
To Akhil’s Capital A/c |
|
|
15,000 |
|
To Nikhil’s Capital A/c |
|
|
15,000 |
|
To Sunil’s Capital A/c |
|
|
15,000 |
|
(General Reserve distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
Akhil’s Capital A/c |
Dr. |
|
35,000 |
|
Nikhil’s Capital A/c |
Dr. |
|
35,000 |
|
To Sunil’s Capital A/c |
|
|
70,000 |
|
(Sunil’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
Interest on Capital A/c |
Dr. |
|
1,600 |
|
To Sunil’s Capital A/c |
|
|
1,600 |
|
(Interest allowed on Sunil’s Capital) |
|
|
|
|
|
|
|
|
|
Profit and Loss Suspense A/c |
Dr. |
|
20,000 |
|
To Sunil’s Capital A/c |
|
|
20,000 |
|
(Sunil’s profit share transferred to his capital account) |
|
|
|
|
|
|
|
|
|
Sunil’s Capital A/c |
Dr. |
|
1,86,600 |
|
To Sunil’s Executor’s A/c |
|
|
1,86,600 |
|
(Amount due to Sunil after all adjustments transferred to his Executor’s Account) |
|
|
|
|
|
|
|
|
|
Sunil’s Executor’s A/c |
Dr. |
|
50,000 |
|
To Bank A/c |
|
|
50,000 |
|
(Amount paid to Sunil’s Executor) |
|
|
|
|
|
|
|
|
Sunil’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
|
Balance b/d |
80,000 |
|
|
Interest on Capital A/c |
1,600 |
|
|
General Reserve |
15,000 |
|
|
Profit and Loss Suspense A/c |
20,000 |
|
|
Akhil’s Capital A/c (Goodwill) |
35,000 |
Sunil’s Executor’s A/c |
1,86,600 |
Nikhil’s Capital A/c (Goodwill) |
35,000 |
|
1,86,600 |
|
1,86,600 |
|
|
|
|
Sunil’s Executor’s Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Bank A/c |
50,000 |
Sunil’s Capital A/c |
1,86,600 |
Balance c/d |
1,36,600 |
|
|
|
1,86,600 |
|
1,86,600 |
|
|
|
|
Working Notes:
WN 1 Calculation of Sunil’s Share of Profit
Profit for 2013-14 = Rs 1,80,000
WN 2 Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
∴Goodwill = Average Profit × Number of Years’ Purchase
= 70,000 × 3 = Rs 2,10,000
WN 3 Adjustment of Goodwill
Old Ratio = 1 : 1 : 1
Sunil died.
∴New Ratio = 1 : 1 and
Gaining Ratio = 1 : 1
Sunil’s Share in Goodwill =
This share of goodwill is to be distributed between Akhil and Nikhil in their gaining ratio (i.e. 1 : 1).
WN 4 Calculation of Interest on Sunil’s Capital
Sunil’s Capital Balance = Rs 80,000
∴Interest on Capital (for 4 months)
Page No 5.95:
Question 60:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
General Reserve A/c |
Dr. |
|
45,000 |
|
To Akhil’s Capital A/c |
|
|
15,000 |
|
To Nikhil’s Capital A/c |
|
|
15,000 |
|
To Sunil’s Capital A/c |
|
|
15,000 |
|
(General Reserve distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
Akhil’s Capital A/c |
Dr. |
|
35,000 |
|
Nikhil’s Capital A/c |
Dr. |
|
35,000 |
|
To Sunil’s Capital A/c |
|
|
70,000 |
|
(Sunil’s share of goodwill adjusted) |
|
|
|
|
|
|
|
|
|
Interest on Capital A/c |
Dr. |
|
1,600 |
|
To Sunil’s Capital A/c |
|
|
1,600 |
|
(Interest allowed on Sunil’s Capital) |
|
|
|
|
|
|
|
|
|
Profit and Loss Suspense A/c |
Dr. |
|
20,000 |
|
To Sunil’s Capital A/c |
|
|
20,000 |
|
(Sunil’s profit share transferred to his capital account) |
|
|
|
|
|
|
|
|
|
Sunil’s Capital A/c |
Dr. |
|
1,86,600 |
|
To Sunil’s Executor’s A/c |
|
|
1,86,600 |
|
(Amount due to Sunil after all adjustments transferred to his Executor’s Account) |
|
|
|
|
|
|
|
|
|
Sunil’s Executor’s A/c |
Dr. |
|
50,000 |
|
To Bank A/c |
|
|
50,000 |
|
(Amount paid to Sunil’s Executor) |
|
|
|
|
|
|
|
|
Sunil’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
|
Balance b/d |
80,000 |
|
|
Interest on Capital A/c |
1,600 |
|
|
General Reserve |
15,000 |
|
|
Profit and Loss Suspense A/c |
20,000 |
|
|
Akhil’s Capital A/c (Goodwill) |
35,000 |
Sunil’s Executor’s A/c |
1,86,600 |
Nikhil’s Capital A/c (Goodwill) |
35,000 |
|
1,86,600 |
|
1,86,600 |
|
|
|
|
Sunil’s Executor’s Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Bank A/c |
50,000 |
Sunil’s Capital A/c |
1,86,600 |
Balance c/d |
1,36,600 |
|
|
|
1,86,600 |
|
1,86,600 |
|
|
|
|
Working Notes:
WN 1 Calculation of Sunil’s Share of Profit
Profit for 2013-14 = Rs 1,80,000
WN 2 Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
∴Goodwill = Average Profit × Number of Years’ Purchase
= 70,000 × 3 = Rs 2,10,000
WN 3 Adjustment of Goodwill
Old Ratio = 1 : 1 : 1
Sunil died.
∴New Ratio = 1 : 1 and
Gaining Ratio = 1 : 1
Sunil’s Share in Goodwill =
This share of goodwill is to be distributed between Akhil and Nikhil in their gaining ratio (i.e. 1 : 1).
WN 4 Calculation of Interest on Sunil’s Capital
Sunil’s Capital Balance = Rs 80,000
∴Interest on Capital (for 4 months)
Answer:
(i) Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
∴Goodwill = Average Profit × Number of Years’ Purchase
= 30,000 × 3 = Rs 90,000
Old Ratio (B, C and D) = 5 : 3 : 2
B Died.
New Ratio (C and D) = 3 : 2
B’s Share in Goodwill =
This share of goodwill is to be distributed between C and D in their gaining ratio (i.e. 3 : 2).
(ii) Calculation of B’s Share of Profit or Loss
Loss for the Year (2008) = Rs 70,000
(iii)
B’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Profit and Loss A/c |
35,000 |
Balance b/d |
40,000 |
Profit and Loss Suspense A/c |
8,750 |
General Reserve |
35,000 |
|
|
C’s Capital A/c (Goodwill) |
27,000 |
B’s Executor’s A/c |
76,250 |
D’s Capital A/c (Goodwill) |
18,000 |
|
1,20,000 |
|
1,20,000 |
|
|
|
|
Page No 5.95:
Question 61:
(i) Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
∴Goodwill = Average Profit × Number of Years’ Purchase
= 30,000 × 3 = Rs 90,000
Old Ratio (B, C and D) = 5 : 3 : 2
B Died.
New Ratio (C and D) = 3 : 2
B’s Share in Goodwill =
This share of goodwill is to be distributed between C and D in their gaining ratio (i.e. 3 : 2).
(ii) Calculation of B’s Share of Profit or Loss
Loss for the Year (2008) = Rs 70,000
(iii)
B’s Capital Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Profit and Loss A/c |
35,000 |
Balance b/d |
40,000 |
Profit and Loss Suspense A/c |
8,750 |
General Reserve |
35,000 |
|
|
C’s Capital A/c (Goodwill) |
27,000 |
B’s Executor’s A/c |
76,250 |
D’s Capital A/c (Goodwill) |
18,000 |
|
1,20,000 |
|
1,20,000 |
|
|
|
|
Answer:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Workmen’s Compensation Reserve |
Dr. |
|
6,000 |
|
To X’s Capital A/c |
|
|
3,000 |
|
To Y’s Capital A/c |
|
|
2,000 |
|
To Z’s Capital A/c |
|
|
1,000 |
|
(Workmen’s Compesation Reserve distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
General Reserve A/c |
Dr. |
|
6,000 |
|
To X’s Capital A/c |
|
|
3,000 |
|
To Y’s Capital A/c |
|
|
2,000 |
|
To Z’s Capital A/c |
|
|
1,000 |
|
(General Reserve distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
3,000 |
|
Y’s Capital A/c |
Dr. |
|
2,000 |
|
Z’s Capital A/c |
Dr. |
|
1,000 |
|
To Advertisement Suspense A/c |
|
|
6,000 |
|
(Advertisement suspense written off among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
4,500 |
|
Y’s Capital A/c |
Dr. |
|
3,000 |
|
To Z’s Capital A/c |
|
|
7,500 |
|
(Z’s share of goodwill adjusted ) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
3,600 |
|
To Sundry debtors A/c |
Dr. |
|
|
1,000 |
To Furniture A/c |
|
|
500 |
|
To Plant and Machinery A/c |
|
|
1,500 |
|
To Bills Receivable A/c |
|
|
600 |
|
(Decrease in value of Assets transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Stock A/c |
Dr. |
|
1,000 |
|
Building A/c |
Dr. |
|
5,000 |
|
To Revaluation A/c |
|
|
6,000 |
|
(Increase in value of Assets transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
2,400 |
|
To X’ Capital A/c |
|
|
1,200 |
|
To Y’s Capital A/c |
|
|
800 |
|
To Z’s Capital A/c |
|
|
400 |
|
(Revaluation profit distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
Profit and Loss Suspense A/c |
Dr. |
|
1,333 |
|
To Z’s Capital A/c |
|
|
1,333 |
|
(Z’s share of profit transferred his capital account) |
|
|
|
|
|
|
|
|
|
Z’s Capital A/c |
Dr. |
|
22,233 |
|
To Z’s Executor’s A/c |
|
|
22,233 |
|
(Amount due to Z transferred to his Executor’s Account) |
|
|
|
|
|
|
|
|
|
Z’s Executor’s A/c |
Dr. |
|
12,333 |
|
To Bank A/c |
|
|
12,333 |
|
(Amount paid to Z’s Executor) |
|
|
|
|
|
|
|
|
Z’s Executor’s Account |
|||||
Dr. |
|
Cr. |
|||
Date |
Particulars |
Amount Rs |
Date |
Particulars |
Amount Rs |
2012 |
|
|
2012 |
|
|
April 30 |
Bank A/c |
12,233 |
April 30 |
Z’s Capital A/c |
22,233 |
Dec. 31 |
Balance c/d |
10,667 |
Dec. 31 |
Interest (10,000 × 10% for 8 months) |
667 |
|
|
22,900 |
|
|
22,900 |
2013 |
|
|
2013 |
|
|
April 30 |
Bank A/c (5,000 + 667 + 333) |
6,000 |
Jan. 01 |
Balance b/d |
10,667 |
|
|
|
April 30 |
Interest (10,000 × 10% for 4 months ) |
333 |
|
Balance c/d |
5,333 |
Dec. 31 |
Interest (5,000 × 10% for 8 months) |
333 |
|
|
11,333 |
|
|
11,333 |
2014 |
|
|
2014 |
|
|
April 30 |
Bank A/c (5,000 + 333 + 167) |
5,500 |
April 01 |
Balance b/d |
5,333 |
|
|
|
April 30 |
Interest (5,000 × 10% for 4months) |
167 |
|
|
5,500 |
|
|
5,500 |
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
∴Goodwill = Average Profit × Number of Years’ Purchase
= 15,000 × 3 = Rs 45,000
WN 2 Adjustment of Goodwill
Old Ratio = 3 : 2 : 1
Z died.
∴New Ratio (X and Y) = 3 : 1 and
Gaining Ratio = 3 : 2
Z’s Share in Goodwill =
This share of goodwill is to be distributed between X and Y in their gaining ratio (i.e. 3 : 1).
WN 3 Calculation Z’s Share of Profit
Profit for Previous Year = Rs 24,000
∴Z’s Profit Share
WN 4
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Sundry Debtors |
1,000 |
Stock |
1,000 |
|
Furniture |
500 |
Building |
5,000 |
|
Plant and Machinery |
1,500 |
|
|
|
Bills Receivable |
600 |
|
|
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
1,200 |
|
|
|
Y’s Capital A/c |
800 |
|
|
|
Z’s Capital A/c |
400 |
2,400 |
|
|
|
6,000 |
|
6,000 |
|
|
|
|
|
Page No 5.96:
Question 62:
Journal |
||||
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
Workmen’s Compensation Reserve |
Dr. |
|
6,000 |
|
To X’s Capital A/c |
|
|
3,000 |
|
To Y’s Capital A/c |
|
|
2,000 |
|
To Z’s Capital A/c |
|
|
1,000 |
|
(Workmen’s Compesation Reserve distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
General Reserve A/c |
Dr. |
|
6,000 |
|
To X’s Capital A/c |
|
|
3,000 |
|
To Y’s Capital A/c |
|
|
2,000 |
|
To Z’s Capital A/c |
|
|
1,000 |
|
(General Reserve distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
3,000 |
|
Y’s Capital A/c |
Dr. |
|
2,000 |
|
Z’s Capital A/c |
Dr. |
|
1,000 |
|
To Advertisement Suspense A/c |
|
|
6,000 |
|
(Advertisement suspense written off among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
X’s Capital A/c |
Dr. |
|
4,500 |
|
Y’s Capital A/c |
Dr. |
|
3,000 |
|
To Z’s Capital A/c |
|
|
7,500 |
|
(Z’s share of goodwill adjusted ) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
3,600 |
|
To Sundry debtors A/c |
Dr. |
|
|
1,000 |
To Furniture A/c |
|
|
500 |
|
To Plant and Machinery A/c |
|
|
1,500 |
|
To Bills Receivable A/c |
|
|
600 |
|
(Decrease in value of Assets transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Stock A/c |
Dr. |
|
1,000 |
|
Building A/c |
Dr. |
|
5,000 |
|
To Revaluation A/c |
|
|
6,000 |
|
(Increase in value of Assets transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
2,400 |
|
To X’ Capital A/c |
|
|
1,200 |
|
To Y’s Capital A/c |
|
|
800 |
|
To Z’s Capital A/c |
|
|
400 |
|
(Revaluation profit distributed among partners in their old ratio) |
|
|
|
|
|
|
|
|
|
Profit and Loss Suspense A/c |
Dr. |
|
1,333 |
|
To Z’s Capital A/c |
|
|
1,333 |
|
(Z’s share of profit transferred his capital account) |
|
|
|
|
|
|
|
|
|
Z’s Capital A/c |
Dr. |
|
22,233 |
|
To Z’s Executor’s A/c |
|
|
22,233 |
|
(Amount due to Z transferred to his Executor’s Account) |
|
|
|
|
|
|
|
|
|
Z’s Executor’s A/c |
Dr. |
|
12,333 |
|
To Bank A/c |
|
|
12,333 |
|
(Amount paid to Z’s Executor) |
|
|
|
|
|
|
|
|
Z’s Executor’s Account |
|||||
Dr. |
|
Cr. |
|||
Date |
Particulars |
Amount Rs |
Date |
Particulars |
Amount Rs |
2012 |
|
|
2012 |
|
|
April 30 |
Bank A/c |
12,233 |
April 30 |
Z’s Capital A/c |
22,233 |
Dec. 31 |
Balance c/d |
10,667 |
Dec. 31 |
Interest (10,000 × 10% for 8 months) |
667 |
|
|
22,900 |
|
|
22,900 |
2013 |
|
|
2013 |
|
|
April 30 |
Bank A/c (5,000 + 667 + 333) |
6,000 |
Jan. 01 |
Balance b/d |
10,667 |
|
|
|
April 30 |
Interest (10,000 × 10% for 4 months ) |
333 |
|
Balance c/d |
5,333 |
Dec. 31 |
Interest (5,000 × 10% for 8 months) |
333 |
|
|
11,333 |
|
|
11,333 |
2014 |
|
|
2014 |
|
|
April 30 |
Bank A/c (5,000 + 333 + 167) |
5,500 |
April 01 |
Balance b/d |
5,333 |
|
|
|
April 30 |
Interest (5,000 × 10% for 4months) |
167 |
|
|
5,500 |
|
|
5,500 |
|
|
|
|
|
|
Working Notes:
WN 1 Calculation of Goodwill
Goodwill = Average Profit × Number of Year’s Purchase
∴Goodwill = Average Profit × Number of Years’ Purchase
= 15,000 × 3 = Rs 45,000
WN 2 Adjustment of Goodwill
Old Ratio = 3 : 2 : 1
Z died.
∴New Ratio (X and Y) = 3 : 1 and
Gaining Ratio = 3 : 2
Z’s Share in Goodwill =
This share of goodwill is to be distributed between X and Y in their gaining ratio (i.e. 3 : 1).
WN 3 Calculation Z’s Share of Profit
Profit for Previous Year = Rs 24,000
∴Z’s Profit Share
WN 4
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Sundry Debtors |
1,000 |
Stock |
1,000 |
|
Furniture |
500 |
Building |
5,000 |
|
Plant and Machinery |
1,500 |
|
|
|
Bills Receivable |
600 |
|
|
|
Profit transferred to: |
|
|
|
|
X’s Capital A/c |
1,200 |
|
|
|
Y’s Capital A/c |
800 |
|
|
|
Z’s Capital A/c |
400 |
2,400 |
|
|
|
6,000 |
|
6,000 |
|
|
|
|
|
Answer:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Provision for Doubtful Debts (25,000 × 5%) |
1,250 |
Furniture and Fittings (75,000 × 5%) |
3,750 |
|
Plant and Machinery (120,000 × 10%) |
12,000 |
Stock (32,000 × 10%) |
3,200 |
|
|
|
Prepaid Advertisement Expenses |
2,100 |
|
|
|
Loss transferred to: |
|
|
|
|
X’s Capital A/c |
2,100 |
|
|
|
Y’s Capital A/c |
1,400 |
|
|
|
Z’s Capital A/c |
700 |
4,200 |
|
13,250 |
|
13,250 |
|
|
|
|
|
Partner’s Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Z’s Current A/c |
|
|
5,000 |
Balance b/d |
1,20,000 |
80,000 |
40,000 |
Revaluation A/c (Loss) |
2,100 |
1,400 |
700 |
X’s Current A/c |
8,000 |
|
|
Z’s Capital A/c (Goodwill) |
3,000 |
2,000 |
|
Y’s Current A/c |
|
2,500 |
|
Z’s Executor’s A/c |
|
|
44,300 |
Reserve |
15,000 |
10,000 |
5,000 |
|
|
|
|
X’s Capital A/c (Goodwill) |
|
|
3,000 |
Balance c/d |
1,37,900 |
89,100 |
|
Y’s Capital A/c (Goodwill) |
|
|
2,000 |
|
1,43,000 |
92,500 |
50,000 |
|
1,43,000 |
92,500 |
50,000 |
|
|
|
|
|
|
|
|
Balance sheet as on March 31, 2014 (after Z’s Death) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Capital A/cs: |
|
Plant and Machinery (1,20,000 – 12,000) |
1,08,000 |
||
X |
1,37,900 |
|
Furniture and Fittings (75,000 + 3,750) |
78,750 |
|
Y |
89,100 |
2,27,000 |
Investments |
20,000 |
|
Z’s Loan |
44,300 |
Stock in Trade (32,000 + 3,200) |
35,200 |
||
Bills Payable |
17,000 |
Sundry Debtors |
25,000 |
|
|
Sundry Creditors |
20,000 |
Less: Provision for Doubtful Debts |
(1,250) |
23,750 |
|
|
|
Bills Receivable |
11,000 |
||
|
|
Cash in Hand |
18,500 |
||
|
|
Cash at Bank |
11,000 |
||
|
|
Prepaid Advertisement Expenses |
2,100 |
||
|
3,08,300 |
|
3,08,300 |
||
|
|
|
|
Working Notes:
Adjustment of Goodwill
Old Ratio (X, Y and Z) = 3 : 2 : 1
Z died.
∴New Ratio (X and Y) = 3 : 2 and
Gaining Ratio = 3 : 2
Goodwill of the firm = Rs 30,000
Z’s Share in Goodwill =
This share of goodwill is to be distributed between X and Y in their gaining ratio (i.e. 3 : 2).
Page No 5.96:
Question 63:
Revaluation Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Provision for Doubtful Debts (25,000 × 5%) |
1,250 |
Furniture and Fittings (75,000 × 5%) |
3,750 |
|
Plant and Machinery (120,000 × 10%) |
12,000 |
Stock (32,000 × 10%) |
3,200 |
|
|
|
Prepaid Advertisement Expenses |
2,100 |
|
|
|
Loss transferred to: |
|
|
|
|
X’s Capital A/c |
2,100 |
|
|
|
Y’s Capital A/c |
1,400 |
|
|
|
Z’s Capital A/c |
700 |
4,200 |
|
13,250 |
|
13,250 |
|
|
|
|
|
Partner’s Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
X |
Y |
Z |
Particulars |
X |
Y |
Z |
Z’s Current A/c |
|
|
5,000 |
Balance b/d |
1,20,000 |
80,000 |
40,000 |
Revaluation A/c (Loss) |
2,100 |
1,400 |
700 |
X’s Current A/c |
8,000 |
|
|
Z’s Capital A/c (Goodwill) |
3,000 |
2,000 |
|
Y’s Current A/c |
|
2,500 |
|
Z’s Executor’s A/c |
|
|
44,300 |
Reserve |
15,000 |
10,000 |
5,000 |
|
|
|
|
X’s Capital A/c (Goodwill) |
|
|
3,000 |
Balance c/d |
1,37,900 |
89,100 |
|
Y’s Capital A/c (Goodwill) |
|
|
2,000 |
|
1,43,000 |
92,500 |
50,000 |
|
1,43,000 |
92,500 |
50,000 |
|
|
|
|
|
|
|
|
Balance sheet as on March 31, 2014 (after Z’s Death) |
|||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
Capital A/cs: |
|
Plant and Machinery (1,20,000 – 12,000) |
1,08,000 |
||
X |
1,37,900 |
|
Furniture and Fittings (75,000 + 3,750) |
78,750 |
|
Y |
89,100 |
2,27,000 |
Investments |
20,000 |
|
Z’s Loan |
44,300 |
Stock in Trade (32,000 + 3,200) |
35,200 |
||
Bills Payable |
17,000 |
Sundry Debtors |
25,000 |
|
|
Sundry Creditors |
20,000 |
Less: Provision for Doubtful Debts |
(1,250) |
23,750 |
|
|
|
Bills Receivable |
11,000 |
||
|
|
Cash in Hand |
18,500 |
||
|
|
Cash at Bank |
11,000 |
||
|
|
Prepaid Advertisement Expenses |
2,100 |
||
|
3,08,300 |
|
3,08,300 |
||
|
|
|
|
Working Notes:
Adjustment of Goodwill
Old Ratio (X, Y and Z) = 3 : 2 : 1
Z died.
∴New Ratio (X and Y) = 3 : 2 and
Gaining Ratio = 3 : 2
Goodwill of the firm = Rs 30,000
Z’s Share in Goodwill =
This share of goodwill is to be distributed between X and Y in their gaining ratio (i.e. 3 : 2).
Answer:
Rohit’s Capital Account |
|||
Dr. |
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Rohit’s Loan A/c |
30,000 |
Balance b/d |
1,50,000 |
Rohit’s Executor’s A/c |
2,70,750 |
General Reserve A/c |
30,000 |
|
|
Sadhna’s Capital A/c (Goodwill) |
24,000 |
|
|
Mohit’s Capital A/c (Goodwill) |
48,000 |
|
|
Profit and Loss Suspense (profit) |
43,750 |
|
|
Interest on Capital A/c |
5,000 |
|
3,00,750 |
|
3,00,750 |
|
|
|
|
Working Notes
(1) Calculation of Rohit’s Share of Goodwill
Goodwill of Firm = Average profits × 2 years
= 72,000 × 2 = 1,44,000
(2)
(3) Calculation Of Rohit’s Share of Profit
Sales for last year = Rs 6,00,000
Profit for last year = Rs 1,50,000
Sales from April 01 to Sept 01, 2012 = Rs 3,50,000
Values involved in the given scenario
(1) Sympathy and helping poor girl child
(2) Fulfilling Social Responsibility
View NCERT Solutions for all chapters of Class 15