Loading Tutorstips...
✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Question 83 Chapter 6 of +2-A
83. X, Y and Z were partners in a firm sharing profits in the ratio of 2: 2: 1. On 31st March 2018, their Balance Sheet was as follows:
| Liabilities | Amount | Assets | Amount | |
| Trade Creditors | 1,20,000 | Cash at Bank | 1,80,000 | |
| Bills Payable | 80,000 | Stock | 1,40,000 | |
| General Reserve | 60,000 | Sundry Debtors | 80,000 | |
| Capital A/cs: | Building | 3,00,000 | ||
| X | 7,00,000 | Advance to Y | 7,00,000 | |
| Y | 7,00,000 | Profit and Loss A/c | 3,20,000 | |
| Z | 60,000 | 14,60,000 | ||
| 17,20,000 | 17,20,000 |
Y died on 30th June 2018. The Partnership Deed provided for the following on the death of a partner:
i Goodwill of the business was to be calculated on the basis of 2 times the average profit of the past 5 years. Profits for the years ended 31st March, 2018, 31st March, 2017, 31st March, 2016, 31st March, 2015 and 31st March, 2014 were 3,20,000 Loss; 1,00,000; 1,60,000; 2,20,000 and 4,40,000 respectively.
ii Y's share of profit or loss from 1st April 2018 till his death was to be calculated on the basis of the profit or loss for the year ended 31st March 2018. You are required to calculate the following:
a Goodwill of the firm and Y's share of goodwill at the time of his death.
b Y's share in the profit or loss of the firm till the date of his death.
c Prepare Y's Capital Account at the time of his death to be presented to his executors.
Y’s Capital Account
| Particular |
Amount | Particular | Amount | ||
|---|---|---|---|---|---|
| Profit & Loss A/c | 1,28,000 | Balance b/d | 7,00,000 | ||
| Profit & Loss Suspense Share of Loss | 32,000 | General Reserve | 24,000 | ||
| Advance to Y | 7,00,000 | X’s Capital A/c | 64,000 | ||
| Z’s Capital A/c | 32,000 | ||||
| 8,20,000 | 8,20,000 | ||||
Working Notes:
Calculation of Share in General Reserve
| Reserve | = | 60,000 | X | 2 |
| 5 | ||||
| = | Rs 24,000 |
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "Q.No.83 | Chapter 6 – Retirement/Death of a Partner | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
You can take our custom-built interactive practice quiz directly on this page to test your understanding of "Q.No.83 | Chapter 6 – Retirement/Death of a Partner | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1" instantly.
