Page 360 - MA-12

Model Test Papers M.51

Working Notes:
Calculations will be made from 1st April, 2019 to 12th June, 2019, 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
73 2
Karam’s share of profit = ` 60,000 ¥ ¥ = ` 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

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars Lokesh Mansoor Nihal Particulars Lokesh Mansoor Nihal
` ` ` ` ` `
To Profit and Loss A/c 10,000 6,000 4,000 By Balance b/d 1,40,000 80,000 50,000
To Revaluation A/c (Loss) 20,000 12,000 8,000 By Lokesh’s Capital A/c ... 21,857 ...
To Goodwill A/c 20,000 12,000 8,000 (WN 2)
To Mansoor’s Capital A/c 21,857 ... 8,743 By Nihal’s Capital A/c (WN 2) ... 8,743 ...
To Bank A/c ... 20,600 ... By Bank A/c ... ... 4,286
To Mansoor’s Loan A/c ... 60,000 ... (Balancing Figure)
To Bank A/c (Bal. Fig.) 4,286 ... ...
To Balance c/d (WN 3) 63,857 ... 25,543
1,40,000 1,10,600 54,286 1,40,000 1,10,600 54,286