Answer:
(i) Adjusting Journal Entry
Walking Note Adjustment Table Date Particulars LF Amt (Dr) Amt (Cr) P's Current A/c Dr 1,000 To R's Current A/c 1,000 (Being the interest on capital wrongly provided, now adjusted)
(ii) Goodwill is 3 times average super profit. \[3\times \text{Average super profit}\,\text{= }Rs.\,18,000\] \[\therefore \] Average super profit = Rs. 6,000 Capital Invested = Total Assets - Outside Liabilities Capital Invested = 15,00,000 - 12,00,000 = Rs. 3,00,000 Normal Profit \[=\text{Capital invested}\times \frac{\text{Rate}}{100}\] Normal Profit \[=30,00,000\times \frac{10}{100}=Rs.\,30,000\] Super profit = Average Profit - Normal Profit 6,000 = Average Profit - 30,000 \[\therefore \] Average Profit = Rs. 36,000 Average Profit \[=\frac{\text{Actual}\,\,\text{Profit}\,\,\text{in}\,\,\text{last}\,\,\text{3}\,\,\text{year}}{\text{Number}\,\text{of}\,\text{Years}}\] \[36,000=\frac{\text{Actural}\,\,\text{Profits}\,\,\text{in}\,\,\text{last}\,\,\text{3}\,\text{year}}{\text{3}}=Rs.\,1,08,000\] \[\therefore \] Actual Profit in last 3 years = Rs. 1,08,000 Particulars P (Rs.) Q (Rs.) R (Rs.) Total A. Amount already Recorded Interest on Capital @ 10% 5,000 10,000 15,000 30,000 Share of Profit (36,000 - 30.000) in Ratio of 1 : 1 : 1 2,000 2,000 2,000 6,000 7,000 12,000 17,000 36,000 B. Amount which should have been Recorded Interest on Capital @ 12% 6,000 12,000 18,000 36,000 Net Effect (A - B) 1,000 (Dr) Nil 1,000 (Cr) Nil
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