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Question 57 Chapter 6 of +2-Part- 1
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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:
- The capital to his credit at the time of his death and interest up to the time of death @ 6 % p.a.
- His appropriate share in general reserve.
- His share of profit for the period based on the figure of the profit of the previous year.
- 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 +2 Part-1: –
| 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.)
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| 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 |
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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) | |||||
Comment if you have any questions.
End of Solution
Check Out the Solution of all questions of this chapter:
The solution to all questions of Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner) Class 12 Usha Publication – 2024 is shown as follows, click on the image of the question to get the solution.
Question 33 Chapter 6 of +2 Part- 1 – USHA Publication
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Question 39 Chapter 6 of +2 Part- 1 – USHA Publication
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Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum
Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)
Chapter No. 2 – Partnership Accounts – I (Introduction)
Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
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Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 1 Class 12 by Unimax Publication
- Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
- Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
- Chapter No. 3 – Partnership Accounts – II (Goodwill)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Check out Part 2 of both books.
In Class 12th the accountancy has 2 books i.e. Part 1 and Part 2. The Books related to the Part 1 are shown above. but If you want to know more about Part 2, you can check it out from the following links. We have provided the links to both books i.e. Accountancy Part 2 by Usha Publication and Advanced Accountancy Part 2 by Unimax Publication.
1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
2. Advanced Accountancy Part 2 Class 12 by Unimax Publication
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