Question 6:
Keshv, Nirmal, and Pankaj are
partners sharing profits in the ratio of 5: 3: 2. Pankaj died and
his share is taken by Keshv. Calculate
new profit-sharing ratio of Keshv and
Nirmal.
Answer:
Old
Ratio (Keshv, Nirmal, and Pankaj)
= 5: 3: 2
Pankaj died from the firm.
His profit share = 210
Pankaj’s share is taken by Keshv in
entirety
New Ratio = Old Ratio + Share acquired from Pankaj
Keshv 's New Share: 5/10+2/10=7/10
Nirmal
's New Share: 3/10+0=310
∴ New Profit Ratio (Keshv
and Nirmal) = 7: 3
Question 7:
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 (`) |
Credit (`) |
|
|
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
Question 8:
A, B and C were partners
sharing profits in the ratio of 3 : 2 : 1. The firm
closes its books on 31st March every year. B died on 30th June, 2020. On his
death, Goodwill of the firm was valued at ` 6,00,000. B's share in
profit or loss till the date of death was to be calculated on the basis of
previous year's profit which was ` 15,00,000 (Loss). Pass necessary Journal
entries for goodwill and his share of loss.
Answer:
|
In the books of the A, B and C Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
2020 |
|
|
|
|
|
|
June 30 |
A’s
Capital A/c (2,00,000 × 3/4) |
Dr. |
|
1,50,000 |
|
|
|
C’s
Capital A/c (2,00,000 × 1/4) |
Dr. |
|
50,000 |
|
|
|
To B’s Capital A/c (WN1) |
|
|
|
2,00,000 |
|
|
(Being
B’s share of goodwill adjusted in gaining ratio 3 : 1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
B’s
Capital A/c (WN2) |
Dr. |
|
1,25,000 |
|
|
|
To Profit & Loss Suspense A/c |
|
|
|
1,25,000 |
|
|
(Being
B’s Share of loss debited to his Capital) |
|
|
|
|
Working
Notes:
1. Calculation of B’s Share of Goodwill
|
Goodwill |
= |
` 6,00,000 |
|
B’s Share of Goodwill |
= |
`
(6,00,000
× 2/6) = `
2,00,000 |
2. Calculation of B’s Share of Loss till the date of his death i.e.
30th June, 2020
|
Previous
year’s loss |
= |
` 15,00,000 |
|
B’s share of loss till the date of death |
= |
Previous
year’s loss × B’s Share of Loss × Months till the date of his death/12 |
|
|
= |
` (15,00,000 × 2/6
× 3/12) |
|
|
= |
`
1,25,000 |
Question 9:
P, R and S
are in partnership sharing profits 4/8, 3/8 and 1/8 respectively. It is
provided in the Partnership Deed that on the death of any partner his share of
goodwill is to be valued at one-half of the net profit credited to his account
during the last four completed years.
R died on 1st January, 2021. The firm's profits for the last four
years ended 31st December, were as:
2017 − ` 1,20,000; 2018 − ` 80,000; 2019 − ` 40,000; 2020 − ` 80,000.
(a) Determine the amount that should be credited to R in respect of
his share of Goodwill.
(b) Pass Journal entry without raising Goodwill Account for its adjustment.
Answer:
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
=1,20,000+80,000+80,000+4,000×3/8
=3,20,000×3/8=1,20,000
(b)
|
Journal |
||||
|
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
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 = ` 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)
p’s Share of Goodwill = 60,000×4/5=48,000
S’s
share of Goodwill =60,000 ×1/5=12,000
Question
10: Dinkar, Navita and Vani were partners sharing profits and losses in
the ratio of 3 :2:1. Navita
died on 30th June, 2017. Her share of profit for the intervening period was
based on the sales during that period, which were ` 6,00,000. The rate of profit during the past four years had
been 10% on sales. The firm closes its books on 31st March every year.
Calculate Navita’s
share of profit. (CBSE 2019)
Answer:
Sales during that period of the firm from 1st
April, 2017 to 30th June, 2017 ` 6,00,000
The rate of profit during the past four
years had been 10% on sales
Profit of the firm from 1st
April, 2017 to 30th June, 2017 is ` 6,00,000 × 10/100 = ` 60,000
Share of Profit is ` 60,000 × 2/6 =
` 20,000
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