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Model Test Papers M.189

Dr. B’S EXECUTORS’ ACCOUNT Cr.
Particulars ` Particulars `
To Bank A/c 3,47,000 By B’s Capital A/c 3,47,000
Working Notes:
10 2
1. B’s Share of Profit till the date of his Death = ` 12,00,000 × ¥ = ` 40,000.
100 6
2. Adjustment of B’s Share of Goodwill:
Total Profit of previous 3 Years = ` 82,000 + ` 90,000 + ` 98,000 = ` 2,70,000
Firm’s Goodwill = (` 2,70,000 × 2) – (20% of ` 5,40,000) = ` 4,32,000
2
B’s Share of Goodwill = ` 4,32,000 × = ` 1,44,000, which is contributed by A and C in
6
their gaining ratio, i.e., 3 : 1.
JOURNAL

Date Particulars L.F. Dr. (`) Cr. (`)
2018 A’s Capital A/c ...Dr. 1,08,000
June 30 C’s Capital A/c ...Dr. 36,000
To B’s Capital A/c 1,44,000
(Being the B’s share of goodwill adjusted by debiting gaining
partners in gaining ratio, i.e., 3 : 1)
13. (a) JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
Y’s Current A/c ...Dr. 9,000
To X’s Current A/c 8,000
To Z’s Current A/c 1,000
(Being the required adjustment due to wrong distribution of profits)
Working Notes:
1. STATEMENT SHOWING ADJUSTMENT TO BE MADE
Particulars X Y Z
` ` `
I. Amount Already Credited by way of Share of Profits, now written Back:
31st March, 2017 (` 33,000) 11,000 11,000 11,000
31st March, 2018 (` 45,000) 15,000 15,000 15,000
Total (Dr.) 26,000 26,000 26,000
II. Amount which should have been Credited:
Salary: 31st March, 2017 ... ... 5,000
31st March, 2018 ... ... 5,000
Interest on Capital: 31st March, 2017 2,500 1,250 1,250
31st March, 2018 2,500 1,250 1,250
Share of Profit: 31st March, 2017(WN 2) 11,500 5,750 5,750

31st March, 2018(WN 3) 17,500 8,750 8,750

(Cr.) 34,000 17,000 27,000
III. Difference (I – II) 8,000 9,000 1,000
Cr. Dr. Cr.