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Model Test Papers M.465

(c) Share in profits up to the date of death on the basis of average profit for the past
four years.
Profits for the past 4 years ending 31st March, were: ` 1,50,000; ` 1,70,000;
` 1,90,000 and ` 1,30,000.
(d) Interest on capital @ 12% p.a.
Prepare Jaipaul’s Capital Account to calculate the amount payable to his executors.
(4)
12. X and Y are partners sharing profits in the ratio of 7 : 5. Their respective fixed capitals
are ` 10,00,000 and ` 7,00,000. The Partnership Deed provided for the following:
(i) Interest on Capital @ 12% p.a.
(ii) X’s salary ` 6,000 per month and Y’s salary ` 84,000 per year.
Profit for the year ended 31st March, 2018 was ` 6,00,000 which was distributed
equally, without providing for the above.
Pass the necessary adjustment entry. (4)
13. (a) A business has earned average profit of ` 2,00,000 during the last few years and
the normal rate of return in similar business is 10%. Find the value of goodwill by
(i) Capitalisation of Super Profit Method.
(ii) Super Profit Method if the goodwill is valued at 3 years’ purchase of super profits.
The assets of the business were ` 20,00,000 and its external liabilities ` 3,60,000.
(b) X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted
Z as a new partner and agreed to new profit-sharing ratio as 3 : 3 : 2. At the time
of admission of Z, Investments appeared at ` 40,000. Half of the Investments to be
taken by X and Y in their profit-sharing ratio at book value. Remaining Investments
were valued at 30,000. Pass the necessary Journal entries. (6)
14. From the following Receipts and Payments Account of Oldman Sports Club for the
year ended 31st March, 2018 and additional information, prepare an Income and
Expenditure Account of the Club for the year ended 31st March, 2018:

Dr. RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March, 2018 Cr.
Receipts ` Payments `
To Balance b/d: By Salary (including ` 1,000 for 2016–17) 11,000
Cash 400 By Billiards Table 8,000
Bank 3,600 4,000 By Office Expenses (including ` 1,000 for 2018–19) 4,400
To Subscriptions 11,000 By Stationery 700
To Life Membership Fee 8,000 By Tournament Expenses 16,000
To Tournament Fund 15,000 By Furniture 5,000
To Donation 40,000 By Sports Equipments 6,000
To Locker Rent 2,000 By 8% Fixed Deposit 10,000
To Sale of Old Sports Material (Costing ` 5,000) 3,000 By Balance c/d:
To Sale of Old Newspapers 2,000 Cash 9,300
To Legacy 20,000 Bank 40,000 49,300
To Entrance Fee 5,000
To Interest on Fixed Deposit 400
1,10,400 1,10,400