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Model Test Papers M.177

JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
2017
April 1 A’s Capital A/c ...Dr. ?
B’s Capital A/c ...Dr. ?
C’s Capital A/c ...Dr. ?
D’s Capital A/c ...Dr. ?
To ? ?
(Being the existing goodwill written off)
A’s Capital A/c ...Dr. ?
B’s Capital A/c ...Dr. ?
To C’s Capital A/c ?
To D’s Capital A/c ?
(Being the adjustment for goodwill made on retirement of D and change
in profit-sharing ratio)
2018
March 31 Profit and Loss Appropriation A/c ...Dr. 6,00,000
To A’s Capital A/c 3,00,000
To B’s Capital A/c 2,00,000
To C’s Capital A/c 1,00,000
(Being the amount of profit after D’s retirement distributed
among A, B and C)
(4)
12. A, B and C are partners in a firm sharing profits in the ratio of 3 : 2 : 1. Their Balance
Sheet as at 31st March, 2018 stood as follows:
Liabilities ` Assets `

Creditors 1,40,000 Cash in Hand 42,500
Employees’ Provident Fund 1,20,000 Cash at Bank 2,14,500
Workmen Compensation Reserve 1,20,000 Debtors 1,20,000
Capital A/cs: Bills Receivable 43,000
A 2,00,000 Stock 17,500
B 1,20,000 Investments 1,32,500
C 80,000 Building 2,10,000
7,80,000 7,80,000

B died on 30th June, 2018 and as per the Partnership Deed his executors are entitled to:
(i) Amount standing to the credit of his Capital Account and interest thereon
@ 10% per annum.
(ii) Share of profits for the intervening period will be based on the sales during
that period and average of three years’ profits earned in the past. Sales for
the period were ` 12,00,000. The rate of profit during past three years had been
10% on sales.
(iii) Goodwill according to share of profit to be calculated by taking twice the amount
of profits of the last three years less 20%. The profits of the previous 3 years were:
1st Year: ` 82,000; 2nd Year: ` 90,000; 3rd Year: ` 98,000.
Investments were sold at par and executors were paid out in full for the marriage of
B’s daughter. Prepare B’s Capital Account and his Executors’ Account. (4)