Page 174 - DEBKVOL-1

7.16 Double Entry Book Keeping—CBSE XII

2. From the following information, estimate share of the deceased partner in profits from the accounting date
till the date of death:
Sales for the year 2017—` 4,00,000; Profit for the year 2017—` 80,000; Date of death 1.4.2018; Sales from
1.1.2018 to 31.3.2018—` 70,000; Share of deceased partner—2/5.
[Ans.: % of Profit to Sales—20%; Profit for the relevant period—` 14,000;
Share of the deceased partner—` 5,600.]
3. X, Y and Z were partners in a firm. Z died on 31st May, 2018. His share of profit from the closure of the last
accounting year till the date of death was to be calculated on the basis of the average of three completed
years of profits before death. Profits for the years ended 31st March, 2016, 2017 and 2018 were ` 18,000;
` 19,000 and ` 17,000 respectively.
Calculate Z’s share of profit till his death and pass necessary Journal entry for the same when:
(i) profit-sharing ratio of remaining partners does not change, and
(ii) profit-sharing ratio of remaining partners changes, new ratio being 3 : 2.
[Ans.: (i) Dr. Profit and Loss Suspense A/c and Cr. Z’s Capital A/c—` 1,000;
(ii) Dr. X’s Capital A/c—` 800; Y’s Capital A/c—` 200; Cr. Z’s Capital A/c—` 1,000.]
4. The Balance Sheet of A, B and C, who were sharing profit in the ratio of 3 : 3 : 4, as on 31st March, 2018
was as follows:
Liabilities ` Assets `
Bills Payable 5,000 Cash 16,000
Loan 12,000 Bank 50,000
General Reserve 10,000 Stock 44,000
Capitals A/cs: Furniture 47,000
A 60,000 Land and Building 60,000
B 60,000 A’s Loan 10,000
C 80,000 2,00,000
2,27,000 2,27,000
A died on 30th June, 2018. The Partnership Deed provided for the following on the death of a partner:
(i) Goodwill of the firm be valued at two years’ purchase of average profit for the last three years.
(ii) Share of profit or loss till the date of death was to be calculated on the basis of sales. Sales for the
year ended 31st March, 2018 amounted to ` 4,00,000 and that from 1st April to 30th June, 2018 to
` 1,50,000. The profit for the year ended 31st March, 2018 was ` 1,00,000.
(iii) Interest on Capital was to be provided @ 6% p.a.
(iv) The average profit of the last three years was ` 42,000.
(v) According to A’s will, the executors should donate his share to a ‘‘Home meant for Physically Challenged
Children’’.
Prepare A’s Capital Account to be rendered to his executors.
[Ans.: A’s Executors’ A/c—` 90,350; A’s Share of Profit—` 11,250; A’s Share of Goodwill—` 25,200.]
5. Anil, Bhanu and Chandu were partners in a firm sharing profits in the ratio of 5 : 3 : 2. On 31st March, 2018,
their Balance Sheet was as under:
Liabilities ` Assets `
Creditors 91,000 Buildings 2,00,000
Bank Overdraft 1,00,000 Machinery 30,000
Reserve Fund 6,000 Stock 10,000
Capital A/cs: Patents 11,000
Anil 30,000 Debtors 8,000
Bhanu 25,000 Cash 8,000
Chandu 15,000 70,000
2,67,000 2,67,000