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M.270 An Aid to Accountancy—CBSE XII

Working Notes:
1. Robert’s Share in Gain (Profit) on Revaluation: `
Gain in Value of Land 25,000
Loss in Value of Stock (8,000)
Loss due to Provision for Doubtful Debts (5,000)
Net Gain 12,000
Robert’s Share in Gain (Profit) on Revaluation = ` 12,000 × 1/6 = ` 2,000.
2. Robert’s Share of Goodwill:
Goodwill = Average Profit × Number of Years’ Purchase
`
`
Ê ` 45,000 + 90,000 + 1,35,000ˆ
= Á Ë 3 ˜ ¯ × 2 = ` 1,80,000
Robert’s Share of Goodwill = ` 1,80,000 × 1/6 = ` 30,000.
It is to be contributed by Ram and Rahim in their Gaining Ratio, i.e., 2 : 3.
3. Robert’s Share of Profit till date of death:
Average Profit = ` 90,000
Profit for 6 months till date of death = ` 45,000
Robert’s Share of Profit = ` 45,000 × 1/6 = ` 7,500.
16.
Dr. REVALUATION ACCOUNT Cr.
Particulars ` Particulars `
To Machinery A/c 2,000 By Building A/c 5,000
To Provision for Doubtful Debts A/c 3,000 By Bad Debts Recovered A/c (WN 1) 3,500
To Cash A/c 3,500
8,500 8,500
Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars A B C Particulars A B C
` ` ` ` ` `
To Goodwill A/c 6,667 3,333 ... By Balance b/d 50,000 32,000 ...
To Partners’ Current A/cs 2,000 8,000 ... By Cash A/c ... ... 30,000
(Balancing Figure) By General Reserve A/c 4,000 2,000 ...
To Balance c/d (WN 3) 60,000 30,000 30,000 By Workmen Compensation
Reserve A/c 6,667 3,333 ...
By Premium for
Goodwill A/c 8,000 4,000 ...
68,667 41,333 30,000 68,667 41,333 30,000

BALANCE SHEET OF A, B AND C as at 1st April, 2018
Liabilities ` Assets `
Sundry Creditors 20,000 Cash (` 2,000 + ` 30,000 + ` 12,000 – ` 3,500) 40,500
Bills Payable 19,000 Sundry Debtors 50,000
A’s Current A/c 2,000 Less: Provision for Doubtful Debts 3,000 47,000
B’s Current A/c 8,000 Stock 10,000
Capital A/cs: Machinery 23,000
A 60,000 Building 45,000
B 30,000 Bills Receivable (X) 3,500
C 30,000 1,20,000
1,69,000 1,69,000