Question 57 Chapter 6 of Class 12 Part – 1 Usha Publication

Question 57 Chapter 6 of Class 12 Part – 1 Usha Publication

57. (Journal Entries/Deceased Partner's Executor A/c) A, B and Care partners sharing profits and loss in the ratio of 3:2 1 respectively. On 31st December, 2017 their balance sheet was as under :

Liabilities	Rs.	Assets	Rs.
Creditors	19,860	Cash in hand	1,210
General reserve	3,000	Stock	10,750
Capital A/c		Debtors	10,750
A	10,000	Investments	10,430
B	6,000	Buildings	8,000
C	4,000
	42,860		42,860

B died on 28th Feb, 2018 and according to partnership agreement his legal representative is entitled to be paid out as follows:

1. The capital to his credit at the time of his death and interest up to the time of death @ 6 % p.a.
2. His appropriate share in general reserve.
3. His share of profit for the period based on the figure of the profit of the previous year.
4. Goodwill according to his share of profit to be calculated by taking twice the amount of average profit of the last three years. The profits for three years were 2015 Rs. 7,800, 2016 Rs. 9,000 and 2017 Rs. 9,600.
   Is legal representative was paid off by selling the investments for Rs. 16,020.
   Pass journal entries and write B's executor's account

The solution of Question 57 Chapter 6 of Class 12 Part – 1 Usha Publication: -

We are providing a solution of Question 57 Chapter 6 of Class 12 Part – 1 Usha Publication in two formats. one is in Video format and another is in article format. Check out both formats as follows:

1. Check out the Solution of this question in Video Format:-

The video consists solution of question number 57 Chapter no. 6 class 12 of Usha publication. To check the direct solution of question no. 57 from the flowing video by using time stamps of the video.

?si=s8Md9tL3lKy6CVZo

2. Check out the Solution of this question in Article Format:-

1.) interest in on capital	=	6	x	2	x	6,000
		100		12
	=	Rs 60

2.) B’s share of the profit	Rs
Previous year profits	9,600
Profit of the firm for 2 months	1,600
B’s share of the profit [(1600X2)/6]= Rs. 533 (app)

3.) B’s share of the profit on sale of investment :	Rs
Realized	16,020
Book value	10,430
Profit	5,590

B’s share of the profit [(5,590 X 2)/6]= Rs. 1863 (app.)

4.) B’s share of goodwill :	Rs
Three years profit (7800+9000+9600)	26,400
Average profit (26,400/3)	8,800
Twice the average profit (8,800X 2)	17,600

B’s share of goodwill [(17600 X2 )/6]= 5,867 (app.)

B's Capital A/c

Particulars		Amount	Particulars		Amount
To cash A/c		15,323	By B’s capital A/c		6,000
			By general reserve		1,000
			By Revaluation A/c (Int.)		60
			By profit & loss Suspense A/c		533
			By A’s capital A/c		4,400
			By B’s capital A/c		1,467
			By Revaluation A/c		1,863
		15,323			15,323

Journal

Date	Particulars		L.F.	Debit	Credit
1.	Revaluation A/c	Dr.		60
	To B’s capital A/c				60
	(Being interest on Capital provided to B)
2.	General Reserve A/c	Dr.		3,000
	To A’s capital A/c				1,500
	To B’s capital A/c				1,000
	To C’s capital A/c				500
	(Being General Reserve transferred to the capital A/c in old profit sharing ratio)
3.	Profit & loss suspense A/c	Dr.		533
	To B’s capital A/c				533
	(Being the profit for the Interim period transferred to B’s Capital Account)
4.	A’s capital A/c	Dr.		4,400
	C’s capital A/c	Dr.		1,467
	To B’s capital A/c				5,867
	(Being adjustment of goodwill made through capital A/cs)
5.	Cash A/c	Dr.		16,020
	To Investment A/c				10,430
	To Revaluation A/c				5,590
	(Being Investment sold on profit)
6.	Revaluation A/c	Dr.		5,590
	To A’s capital A/c				2,795
	To B’s capital A/c				1,863
	To C’s capital A/c				932
	(Being profit on revaluation A/c transferred to the capital A/c in old profit sharing ratio)