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Model Test Papers M.117

BALANCE SHEET as at 1st April, 2018
Liabilities ` Assets `
X’s Capital 4,30,000 Machinery 2,60,000
Y’s Capital 1,50,000 Furniture (` 1,80,000 + ` 60,000) 2,40,000
Bank Loan 1,20,000 Stock (` 1,00,000 – ` 20,000) 80,000
Creditors 10,000 Debtors 80,000
Employees’ Provident Fund 10,000 Bank 60,000
7,20,000 7,20,000

Working Notes:
1. Calculation of Gain/(Sacrifice) of Partners:
Sacrifice = Old share – New share
X = 5/8 – 3/8 = 2/8 (i.e., sacrifice)
Y = 3/8 – 5/8 = (2/8) (i.e., a gain)
2. Valuation and Adjustment of Goodwill:
Super Profit = Average Profit – Normal Profit
= ` 2,00,000 – ` 1,20,000 = ` 80,000
Goodwill = Super Profit × No. of Years’ Purchase
= ` 80,000 × 4 = ` 3,20,000
X’s Share of Goodwill = 2/8 of ` 3,20,000 = ` 80,000, which is contributed by Y.
16. JOURNAL OF YOUNG INDIA LTD.
Date Particulars L.F. Dr. (`) Cr. (`)

Bank A/c (1,10,000 × ` 3) ...Dr. 3,30,000
To Equity Shares Application A/c 3,30,000
(Being the application money received for 1,10,000 shares)
Equity Shares Application A/c ...Dr. 3,30,000
To Equity Share Capital A/c (50,000 × ` 3) 1,50,000
To Equity Shares Allotment A/c (10,000 × ` 2 + 30,000 × ` 2) 80,000
To Equity Shares First and Final Call A/c 70,000
To Bank A/c (10,000 × ` 3) 30,000
(Being the application money adjusted)
Equity Shares Allotment A/c (50,000 × ` 2) ...Dr. 1,00,000
To Equity Share Capital A/c 1,00,000
(Being the allotment money due)
Bank A/c ...Dr. 20,000
To Equity Shares Allotment A/c 20,000
(Being the allotment money duly received)
Equity Shares First and Final Call A/c ...Dr. 2,50,000
To Equity Share Capital A/c 2,50,000
(Being the call money due)
Bank A/c ...Dr. 1,79,100
To Equity Shares First and Final Call A/c (WN 2) 1,79,100
(Being the call money received except on 300 shares)