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Model Test Papers M.297

Working Notes:
1. Calculation of Gain/(Sacrifice) of each Partner:
18 – 10 2 3 12 – 15
A = 3/5 – 2/6 = = 8/30; B = – = = –3/30 (Sacrifice)
30 5 6 30
A is the only gaining partner. Thus, he will compensate not only the deceased partner C but also the sacrificing
partner B.
2. Valuation of Goodwill:
` 45,000 + 90,000 + 1,35,000` `
Average Profit = = ` 90,000
3
Goodwill = Average Profit × No. of Years’ Purchase
= ` 90,000 × 2 = ` 1,80,000.
3. Adjustment of Goodwill:
For A’s Gained Share = 8/30 of ` 1,80,000 = ` 48,000;
For B’s Sacrifice = 3/30 of ` 1,80,000 = ` 18,000;
For C’s Sacrifice = 1/6 of ` 1,80,000 = ` 30,000.
16.
Dr. REVALUATION ACCOUNT Cr.
Particulars ` Particulars `
To Investments A/c 6,000 By Accrued Income A/c 4,500
To Provision for Doubtful Debts A/c 600 By Loss transferred to Current A/cs:
To Outstanding Rent A/c 15,000 X 10,260
Y 6,840 17,100
21,600 21,600
Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars X (`) Y (`) Z (`) Particulars X (`) Y (`) Z (`)
To Balance c/d 1,80,000 90,000 60,000 By Balance b/d 1,80,000 90,000 ...
By Bank A/c ... ... 60,000
1,80,000 90,000 60,000 1,80,000 90,000 60,000
Dr. PARTNERS’ CURRENT ACCOUNTS Cr.
Particulars X (`) Y (`) Z (`) Particulars X (`) Y (`) Z (`)
To Goodwill A/c 18,000 12,000 ... By Balance b/d 30,000 6,000 ...
To Bank A/c 12,600 5,400 ... By Premium for
To Investments A/c 18,000 ... ... Goodwill A/c 25,200 10,800 ...
To Revaluation A/c (Loss) 10,260 6,840 ... By General Reserve A/c 21,600 14,400 ...
To Balance c/d 17,940 6,960 ...
76,800 31,200 ... 76,800 31,200 ...

BALANCE SHEET as at 1st April, 2018
Liabilities ` Assets `
Creditors 45,000 Cash at Bank 93,000
Outstanding Rent 15,000 Debtors 60,000
Current A/cs: Less: Provision for Doubtful Debts 3,000 57,000
X 17,940 Patents 44,400
Y 6,960 24,900 Fixed Assets 2,16,000
Capital A/cs: Accrued Income 4,500
X 1,80,000
Y 90,000
Z 60,000 3,30,000
4,14,900 4,14,900