# 12th | Ts grewal 2022-2023 Question 6 to 10 | Death of A Partner

#### Question 6:

Keshv, Nirmaland 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.

Old Ratio (Keshv, Nirmaland 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.

 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.

 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.

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)

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

Click on Below link for more questions Of Volume-1 of 12th