Page 496 - AAAXII

Model Test Papers M.475

Rich’s Capital A/c ...Dr. 5,00,000
Poor’s Capital A/c ...Dr. 5,00,000
To Wealthy’s Capital A/c 10,00,000
(Being the deficiency of Wealthy’s guaranteed profit borne by
Rich and Poor equally)

Working Note:
Calculation of New Profit-sharing Ratio:
Let the total share of profit be 1
1 4
Wealthy’s Share = ; Remaining Share = , which is shared by Rich and Poor in their Old Profit-Sharing Rato, i.e., 3 : 2.
5 5
3 4 12 2 4 8
Rich’s New Share = ¥ = ; Poor’s New Share = ¥ =
5 5 25 5 5 25
12 8 1 12 8 5
Hence, New Profit-sharing Ratio among Rich, Poor and Wealthy = : : = : : or 12 : 8 : 5.
25 25 5 25 25 25
9. Calculation of amount of Medicines to be debited to the Income and Expenditure Account
for the year ended 31st March, 2018:
Particulars `

Amount paid to Creditors for Medicines 20,00,000
Add: Opening Stock of Medicines (1st April, 2017) 2,47,000
Closing Creditors for Medicines (31st March, 2018) 19,37,000 21,84,000
41,84,000
Less: Closing Stock of Medicines (31st March, 2018) 3,69,000
Opening Creditors for Medicines (1st April, 2017) 17,85,000 21,54,000
Amount of Medicines to be debited to Income and Expenditure Account 20,30,000

AN EXTRACT OF INCOME AND EXPENDITURE ACCOUNT
Dr. for the year ended 31st March, 2018 Cr.
Expenditure ` Income `
To Medicines 20,30,000
Alternative Method: Amount of medicines to be debited to Income and Expenditure
Account can be determined by preparing the following two accounts:

Dr. CREDITORS FOR MEDICINES ACCOUNT Cr.
Particulars ` Particulars `
To Bank A/c (Payment made during the year) 20,00,000 By Balance b/d (Opening Creditors) 17,85,000
To Balance c/d (Closing Creditors) 19,37,000 By Stock of Medicines A/c (Bal. Fig.) (Purchase) 21,52,000
39,37,000 39,37,000

Dr. STOCK OF MEDICINES ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d (Opening Stock 1st April, 2017) 2,47,000 By Income and Expenditure A/c (Bal. Fig.) 20,30,000
To Creditors for Medicines A/c 21,52,000 By Balance c/d (Closing Stock 31st March, 2018) 3,69,000
23,99,000 23,99,000