Page 498 - AAAXII

Model Test Papers M.477

3. Calculation of Jaipaul’s Share of Goodwill:
(a) Average Profit (WN 2) = ` 1,60,000.
(b) Value of Goodwill = ` 1,60,000 × 3 = ` 4,80,000.
(c) Jaipaul’s Share of Goodwill = ` 4,80,000 × 2/5 = ` 1,92,000, which will be contributed by Jassal and Jyoti
in their gaining ratio, i.e., 2 : 1.
12. JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
Y’s Current A/c ...Dr. 32,000
To X’s Current A/c 32,000
(Being the adjustment entry recorded due to omission of interest
on capital and salary to partners)
Working Note: TABLE SHOWING THE ADJUSTMENT TO BE MADE
Particulars X’s Current A/c Y’s Current A/c Firm
Dr. (`) Cr. (`) Dr. (`) Cr. (`) Dr. (`) Cr. (`)
Share of Profit already Credited, now taken back 3,00,000 ... 3,00,000 ... ... 6,00,000
Amount which should have been credited:
(i) Interest on Capital @ 12% ... 1,20,000 ... 84,000 2,04,000 ...
(ii) Salary of Partners ... 72,000 ... 84,000 1,56,000 ...
(iii) Share of Profit ` 2,40,000* in the ratio of 7 : 5 ... 1,40,000 ... 1,00,000 2,40,000 ...

3,00,000 3,32,000 3,00,000 2,68,000 6,00,000 6,00,000

Net Effect Cr.—` 32,000 Dr.—` 32,000 NIL

*` 6,00,000 – ` 2,04,000 – ` 1,56,000 = ` 2,40,000.
13. (a) (i) Goodwill (Capitalisation of Super Profit)
100 100
= Super Profit × = ` 36,000 × = ` 3,60,000.
Normal Rate of Return 10
(ii) Goodwill (Super Profit Method) = Super Profit × No. of Years’ Purchase
= ` 36,000 × 3 = ` 1,08,000.
Working Note:
Average Profit (given) = ` 2,00,000
Normal Profit = Capital Employed* × Normal Rate of Return/100
10
= ` 16,40,000 × = ` 1,64,000
100
Super Profit = Average Profit – Normal Profit
= ` 2,00,000 – ` 1,64,000 = ` 36,000.
*Capital Employed = Assets – External Liabilities = ` 20,00,000 – ` 3,60,000 = ` 16,40,000.
(b) JOURNAL

Date Particulars L.F. Dr. (`) Cr. (`)
X’s Capital A/c ...Dr. 12,000
Y’s Capital A/c ...Dr. 8,000
To Investments A/c 20,000
(Being half of the Investments taken over by old partners)