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Model Test Papers M.41

(ii) Share in Profit proportionate to his amount outstanding to total capital
employed
` 1,00,000
= × ` 80,000 = ` 16,000
` 5,00,000 *
*Capital Employed = Capitals of X and Y + Amount Due to Z
= ` 2,40,000 + ` 1,60,000 + ` 1,00,000 = ` 5,00,000.
Z should exercise option (ii) as amount under Option (ii) is greater than option
(i). Thus, Total amount payable to Z = ` 1,00,000 + ` 16,000 = ` 1,16,000.
(b)
Dr. QURESHI’S CAPITAL ACCOUNT Cr.
Particulars ` Particulars `
To Qureshi’s Loan A/c 1,00,000 By Balance b/d 1,00,000
To Interest on Qureshi’s Loan A/c (WN 3) 4,000 By Reserve Fund A/c (` 2,00,000 × 1/4) 50,000
To Qureshi’s Executors’ A/c (Balancing Figure) 68,875 By Profit and Loss Suspense A/c (WN 1) 2,625
By Pooja’s Capital A/c (WN 2) 13,500
By Ross’s Capital A/c (WN 2) 6,750
1,72,875 1,72,875
Working Notes:
1. Calculation of Qureshi’s Share of Profit till the date of death:
` 45,000 +` 48,000 + ` 33,000
Average Profit = = ` 42,000
3
Qureshi’s Share of Profit till the date of death = ` 42,000 ¥ 1 ¥ 3 = ` 2,625.
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2. Adjustment of Goodwill:
(i) Total Profit of Last two Years = ` 48,000 + ` 33,000 = ` 81,000

1
(ii) Qureshi’s Share of Goodwill = ` 81,000 × = ` 20,250, which will be contributed by Pooja and Ross in
their Gaining Ratio of 2 : 1. Thus, 4
2 1
Pooja’s Contribution = ` 20,250 × = ` 13,500; Ross’s Contribution = ` 20,250 × = ` 6,750.
3 3
6 3
3. Interest on Qureshi’s Loan = ` 1,00,000 × ¥ = ` 1,500 or ` 4,000, whichever is more.
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15.
Dr. REALISATION ACCOUNT Cr.
Particulars ` Particulars `
To Sundry Assets —Transfer: By Creditors 1,00,000
Furniture 3,70,000 By Investment Fluctuation Reserve A/c 45,000
Stock 55,000 By X’s Capital A/c (Investments) 1,25,000
Investments 1,50,000 5,75,000 By Bank A/c (Stock and Furniture) 4,15,000
To Bank A/c: By Y’s Capital A/c (Old Furniture) 30,000
Creditors 1,00,000 By Loss transferred to:
Compensation to Employees 80,000 X’s Capital A/c 30,000
Realisation Expenses 10,000 1,90,000 Y’s Capital A/c 18,000
To X’s Capital A/c (Remuneration) 10,000 Z’s Capital A/c 12,000 60,000
7,75,000 7,75,000