12th | Ts grewal 2021-2022 Question 17 to 20 | Death of a partner

Page No 7.31:


Question 17: Ajay, Bhawna and Shreya were partners sharing profits in the ratio of 2:2:1. On 1st July, 2020 Shreya died. The books of accounts are closed on 31st March every year. Sales for the year 2019-20 ` 5,00,000 and that from 1st April to 30th June, 2020 were ` 1,40,000. Rate of profit during the past three years had been 10% on sales. Since Shreya’s legal representative was her only son, who is specially abled, it was decided that the profit for the purpose of settling Shreya’s account is to be calculated as 20% on sales.

Calculate Shreya’s share of profits till the date of her death and pass necessary Journal entry for the same.

(CBSE 2018 C, Modified)

 

Answer:

 

Date

Particulars

 

L.F.

(Dr.) `

(Cr.) `

2020

31st July

Shreya’s Capital A/c

  To Profit and Loss Suspense A/c

(Being loss transferred)

Dr.

 

5,600

 

5,600

Ajay, Bhawna and Shreya were partners sharing profits in the ratio of 2:2:1

On 1st July, 2020 Shreya died

Shreya’s share of Profit On sale from 1st April, 2020 to 30th June, 2020 for 3 Month is to be calculated as 20% on sales

Sales from 1st April to 30th June, 2020 were `1,40,000 for 3 Month

Profit from 1st April to 30th June, 2020 (for 3 Month) were `1,40,000×20÷100=28,000

Shreya’s share of Profit =`28,000×1÷5=5,600

 

Page No 7.31:


Question 18: Raman, Param and Karan were partners sharing profits and losses in the ratio of 3:2:1. Param died on 31st December, 2020. Accounts of the firm are closed on 31st March every year. Sales for the year ended 31st March, 2020 was ` 12,00,000 and sales for the nine months ended 31st December, 2020 was ` 6,00,000.

Loss for the year ended 31st March, 2020 was ` 90,000. Calculate deceased partner’s share of profit/loss from the beginning of the accounting year up to 31st December, 2020.

 

Answer:

Date

Particulars

 

L.F.

(Dr.) `

(Cr.) `

2020

31st Dec.

Param’s Capital A/c

  To Profit and Loss Suspense A/c

(Being loss transferred)

Dr.

 

15,000

 

15,000

Working Notes:

Sales for the year ended 31st March, 2020 was ` 12,00,000

Loss for the year ended 31st March, 2020 was ` 90,000

Percentage of Loss for the year ended 31st March, 2020 was 90,000 × 100 ÷ 12,00,000 = 7.5 %

Sales for the nine months ended 31st December, 2020 was ` 6,00,000.

Param’s share of Loss for the nine months ended 31st December, 2020 was ` 6,00,000 × 7.5 ÷ 100 = 15,000

 

Page No 7.31:


Question 19: Akhil, Bikram and Charu were partners sharing profits and losses in the ratio of 3:2:1. Bikram died on 30th September, 2020. Loss from the beginning of the accounting year till the date of death was estimated at ` 3,60,000. Akhil and Charu decided to share future profits in the ratio of 3:2 w.e.f. 1st October, 2020.

Pass the necessary Journal entry to record Bhuwan’s share of profit/loss up to the date of death.

 

Answer:

Date

Particulars

 

L.F.

(Dr.) `

(Cr.) `

2020

30st Sep.

Bikram’s Capital A/c (WN-1)

  To Profit and Loss Suspense A/c

(Being loss transferred)

Dr.

 

1,20,000

 

1,20,000

30st Sep.

Profit and Loss Suspense A/c (WN-2)

To Akhil’s Capital A/c

To Charu’s Capital A/c

(Being loss transferred)

 

 

1,20,000

 

36,000

84,000

 

Or (Alternative Journal Entry)

 

 

 

 

30st Sep.

Bikram’s Capital A/c (WN-1)

  To Akhil’s Capital A/c (WN-2)

  To Charu’s Capital A/c (WN-2)

(Being loss transferred)

Dr.

 

1,20,000

 

36,000

84,000

 

Working notes:

WN-1

Loss from the beginning of the accounting year till the date of death was estimated at ` 3,60,000

Bikram’s Share of Loss till the beginning of the accounting year till the date of death ` 3,60,000 × 2/6 = 1,20,000

WN-2

Old share of Akhil is 3/6 and Charu is 1/6

Akhil and Charu New share future profits in the ratio of 3:2 w.e.f. 1st October, 2020.

Akhil = 3/6 - 3/5= 15-18/30=-3/30 (Gain)

Charu = 1/6 - 2/5= 5-12/30= -7/30 (Gain)

Gaining ratio of Akhil and Charu is 3:7

Akhinl = 1,20,000 × 3/10 = 36,000

Charu = 1,20,000 × 7/10 = 84,000

 

Page No 7.32:

Question 20:


X, Y and Z were partners in a firm sharing profit in 3 : 2 : 1. The firm closes its books on 31st March every year. Y died on 30th June, 2021. On Y's death goodwill of the firm was valued at  ` 60,000. Y's share in the profit of the firm till the date of his death was to be calculated on the basis of previous year's profit which was  ` 1,50,000.
Pass necessary Journal entries for goodwill and Y's share of profit at the time of his death.

 

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

(`)

Credit

Amount

(`)

2021

 

 

 

 

June 30

X’s Capital A/c

Dr.

 

15,000

 

 

Z’s Capital A/c

Dr.

 

5,000

 

 

    To Y’s Capital A/c

 

 

 

20,000

 

(Y’s share of goodwill adjusted through X and Y’s Capital Account in gaining ratio, i.e. 3 : 1)

 

 

 

 

 

 

 

 

 

 

June 30

Profit and Loss Suspense A/c

Dr.

 

12,500

 

 

   To Y’s Capital A/c

 

 

 

12,500

 

(Y’s profit share till his death debited to P&L Suspense A/c)

 

 

 

 

 

 

 

 

 

 

Working Notes:
WN 1: Calculation of Y's Share of Goodwill
Goodwill of the Firm= ` 60,000

Y's Share of Goodwill = 60,000 × 2/6 = ` 20,000

20,000 will be debited to X's & Z's Capital A/c in gaining ratio of 3 : 1

X will pay = 20,000 × 3/4 = ` 15,000

Z will pay = 20,000 × 1/4 = ` 5,000 

WN 2: Calculation of Y's Share of Profit
Previous Year's Profit = ` 1,50,000

Y's share of Profit (till death) = Previous Year's Profit × Y's Profit Share × 3 months (April 01, 2021 till June 30, 2021)

Y's share of Profit (till death) = 1,50,000 × 2/6 × 3/12= ` 12,500