Page 124 - MA12
P. 124
M.30 Management Accounting (Section B)—ISC XII
3. (a)
Dr. KARAM’S CAPITAL ACCOUNT Cr.
Particulars ` Particulars `
To Karam’s Executors’ A/c (Balancing Figure) 3,65,000 By Balance b/d 1,20,000
By Profit and Loss Suspense A/c (WN 1) 4,000
By Interest on Karam’s Loan A/c 1,000*
By Karam’s Loan A/c 1,00,000
By Priya’s Capital A/c (Goodwill) (WN 2) 90,000
By Anna’s Capital A/c (Goodwill) (WN 2) 30,000
By Priya’s Capital A/c (` 20,000 × 3/4 )(WN 3) 15,000
By Anna’s Capital A/c (` 20,000 × 1/4 )(WN 3) 5,000
3,65,000 3,65,000
*` 1,00,000 × 5/100 × 73/365 = ` 1,000.
Working Notes:
Calculations will be made from 1st April, 2020 to 12th June, 2020, i.e., for 73 days.
1. Karam’s share of profit till the date of his death:
` 30,000 + ` 70,000 + ` 80,000
Average Profit of last three years = = ` 60,000
3
Karam’s share of profit = ` 60,000 ¥ 73 ¥ 2 = ` 4,000.
2. Karam’s share of Goodwill: 365 6
Total of Profit of last three years = ` 30,000 + ` 70,000 + ` 80,000 = ` 1,80,000
Firm’s Goodwill = Total Profit × No. of years’ purchase = ` 1,80,000 × 2 = ` 3,60,000
2
Karam’s Share of Goodwill = ` 3,60,000 × = ` 1,20,000, which is contributed by Priya and Anna in their
Gaining Ratio of 3 : 1. Thus, 6
3
Priya’s contribution = ` 1,20,000 × = ` 90,000; and
4
1
Anna’s contribution = ` 1,20,000 × = ` 30,000.
4
3. Adjustment of General Reserve and Advertisement Expenditure:
`
General Reserve 1,80,000
Less: Advertisement Suspense A/c 1,20,000
Net Effect 60,000
2
Karam’s share in net effect of General Reserve & Advertisement Expenditure = ` 60,000 × = ` 20,000,
which is contributed by Priya and Anna in their Gaining Ratio, i.e., 3 : 1. 6
(b)
Dr. REVALUATION ACCOUNT Cr.
Particulars ` Particulars `
To Workmen Compensation Claim A/c 12,000 By Provision for Doubtful Debts A/c 2,000
To Investments A/c (WN 1) 30,000 By Loss transferred to:
Lokesh’s Capital A/c 20,000
Mansoor’s Capital A/c 12,000
Nihal’s Capital A/c 8,000 40,000
42,000 42,000