Page No 7.35:
Question
29: Shirish, Harit and Asha were partners in a firm sharing profits in
the ratio of 5:4:1. Shirish died on 30th
June, 2018. On this date, their Balance Sheet was follows:
Balance sheet of Shirish, Harish, Asha as
at 31st March, 2018
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Assets
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`
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Liabilities
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`
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Capital A/cs:
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Plant and Machinery
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5,60,000
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Shirish
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1,00,000
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Stock
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90,000
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Harit
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2,00,000
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Debtors
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10,000
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Asha
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3,00,000
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6,00,000
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Cash
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40,000
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Profits for the year
2017-18
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80,000
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Bills Payable
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20,000
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7,00,000
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7,00,000
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According to the Partnership Deed, in
addition to deceased partner’s capital, his executor is entitled to:
(i) Share in
profits in the year of death on the basis of average of last two years’ profit. Profit for the year 2016-17 was 60,000.
(ii) Goodwill of the firm was to be valued
at 2 years’ purchase of average of last two years’ profits.
Prepare Shirish’s
Capital Account to be presented to his executor. (CBSE 2019)
Answer:
Shirish’s
Capital Account
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Particulars
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Dr. `
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Particulars
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Cr. `
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To Sadhu’s Executors A/c
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2,18,750
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By Balance b/d
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1,00,000
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By P&L Suspense A/c
(WN-1)
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8,750
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By Manish’s Capital A/c
(WN-2)
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56,000
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By Asha’s Capital A/c (WN-2)
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14,000
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By P&L Appropriation
A/c(WN-3)
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40,000
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2,18,750
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2,18,750
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Working
notes:
WN-1
Calculation of Sadhu’s share of Profit
Average Profit
of last two years= 80,000+60,000/2=70,000
Shirish’s Share of Profit = 70,000×5×3/10×12 = ` 8,750
WN-2
Calculation of goodwill
The average profits of the last two years
were ` 70,000
Goodwill of the Firm = ` 70,000×2=1,40,000
Share of Shirish
is in Goodwill = 1,40,000 × 5/10 = 70,000
Goodwill Share of Shirish
is in Goodwill will be compensated by Harish and Asha in 4:1
Harish = 70,000 × 4/5 = 56,000
Asha = 70,000 × 1/5 = 14,000
WN-3
Calculation of Sadhu’s share of undistributed Profits for the year 2017-18
Shirish’s Share of Profit = 80,000×5/10 = ` 40,000
Page No 7.35:
Question 30:
Virad, Vishad
and Roma were partners in a firm sharing profits in the ratio of 5 : 3 : 2 respectively. On 31st March, 2013, their Balance
Sheet was as under:
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Liabilities |
` |
Assets |
` |
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Capital
A/cs: |
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Buildings |
2,00,000 |
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Virad |
3,00,000 |
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Machinery |
3,00,000 |
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Vishad |
2,50,000 |
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Patents |
1,10,000 |
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Roma |
1,50,000 |
7,00,000 |
Stock |
1,00,000 |
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Reserve
Fund |
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60,000 |
Debtors |
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80,000 |
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Creditors |
1,10,000 |
Cash |
80,000 |
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8,70,000 |
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8,70,000 |
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Virad died on 1st
October, 2013. It was agreed between his executors and the remaining partners
that:
(i) Goodwill of the firm be valued
at 212 years purchase of average profits for the last three years.
The average profits were
` 1,50,000.
(ii) Interest on capital be provided at 10% p.a.
(iii) Profits for the 2013-14 be taken as having accrued at the same rate as
that of the previous year which was ` 1,50,000.
Prepare Virad's Capital Account to be presented to
his Executors as on 1st October, 2013.
Answer:
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Virad’s Capital Account |
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Dr. |
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Cr. |
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Particulars |
Amount (`) |
Particulars |
Amount (`) |
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Balance b/d |
3,00,000 |
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Executor’s A/c |
5,70,000 |
Vishad’s Capital A/c |
1,12,500 |
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Roma’s Capital
A/c |
75,000 |
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Profit and Loss
Suspense A/c |
37,500 |
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Reserve Fund |
30,000 |
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Interest on
Capital |
15,000 |
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5,70,000 |
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5,70,000 |
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Calculation
of Gaining Ratio of Vishad and Roma:
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Vishad |
Vishad |
Roma |
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OLD
RATION |
5 : |
3 : |
2 |
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NEW
RATIO |
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3 : |
2 |
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Vishad’s |
=3/10-3/10 |
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=3/10 |
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Roma’s |
=2/5-2/10 |
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=2/10 |
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Gaining ratio=3:s2
WN1: Calculation of Virad’s Share of
Goodwill:
Goodwill= Average profit × no. of purchases years’
Goodwill= 1,50,000×2 1/2 =3,75,000
Virad’s Share of Goodwill = 3,75,000×5/10=1,87,500
Vishal will give=1,87,500×3/5=1,12,500
Roma will give=1,87,500×2/5 =75,000
WN2: Calculation of Profit share of Virad:
Profit for the yeat= 1,50,000
Virad’s Share of profit = 1,50,000×6/12×5/10=37,500
WN3: Calculation of Interest on Virad ‘s Capital:
Virad’s capital=3,00,000
Virad’s Share of profit = 3,00,000×6/12×5/10=15,000
WN4: Virad’s share of Reserve fund:
Virad’s Share of profit = 60,000×5/10=30,000
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Chapter-6: Retirement of a partner | 2021-2022
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