Liabilities | Amt (Rs.) | Assets | Amt (Rs.) | |
Sundry Creditors | 40,000 | Plant and Machinery | 2,00,000 | |
Reserve Fund | 64,000 | Stock | 80,000 | |
Capital A/cs | Sundry Debtors | 1,20,000 | ||
Amit | 2,00,000 | Cash at Bank | 1,00,000 | |
Rahul | 1,00,000 | Cash in Hand | 4,000 | |
Ankit | 1,00,000 | 4,00,000 | ||
5,04,000 | 5,04,000 |
(i) Amount standing to the credit of the partner's capital account. |
(ii) Interest on capital @ 5% per annum. |
(iii) Share of goodwill on the basis of twice the average of the past three years' profits. |
(iv) Share of profits from the closing of the last financial year to the date of death on the basis of the last year's profits. |
(v) Ankit's share of goodwill will be adjusted to the accounts of Amit and Rahul who will maintain a profit sharing ratio of 2 : 1 in the new firm. They decide not to raise any goodwill account. |
Answer:
Dr Ankit?s Capital Account Cr
Working Notes 1. Calculation of Gaining Ratio Gaining Ratio = New Share-Old Share Amit?s\[\,=\frac{2}{3}-\frac{2}{4}=\frac{8-6}{12}=\frac{2}{12};\] Rahul?s \[=\frac{1}{3}-\frac{1}{4}=\frac{4-3}{12}=\frac{1}{12};\] Gaining Ratio = 2 : 1 2. Value of Goodwill \[=\,Average\,\Pr ofid\times Number\,of\,Years'Purchase\] Average Profit \[=\frac{1,60,000+1,80,000+2,00,000}{3}=Rs.\,1,80,000;\] Goodwill\[\,=\,1,80,000\times 2\,=\,Rs.\,3,60,000\] 3. Calculation of Ankit?s Share in Goodwill\[(3,60,000\times 1/4)\]= Rs. 90,000 Amit?s Contribution for Ankit?s Goodwill\[=\,90,000\times 2/3\]= Rs. 60,000 Rahul?s Contribution for Ankit?s Goodwill\[=\,90,000\times 1/3\]= Rs. 30,000 4. Calculation of Ankit's Share in Profit \[2,00,000\times \frac{1}{4}\times \frac{3}{12}=Rs.\,12,500\] 5. Calculation of Reserve Fund \[64,000\times \frac{1}{4}=Rs.\,16,000\] 6. Calculation of Interest on Capital \[1,00,000\times \frac{5}{100}\times \frac{3}{12}=\,Rs.\,1,250\] Particulars Amt (Rs.) Particulars Amt (Rs.) To Ankit?s Executor?s A/c 2,19,750 By Balance b/d 1,00,000 (Balancing Figure) By Reserve Fund 16,000 By Interest on Capital A/c 1,250 By Amit?s Capital A/c (Goodwill) 60,000 By Rahul?s Capital A/c (Goodwill) 30,000 By Profit and Loss Suspense A/c 12,500 2,19,750 2,19,750
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