# Question 61 Chapter 6 of +2 Part-1 – USHA Publication 12 Class Part – 1

Q-61. - CH-6 - Usha +2 Book 2018 - Solution

Question 61 Chapter 6 of +2-Part-1

61. (Revaluation A/c/Capital A/c Executor A/c/B/S) The balance sheet of A , B & C is given at 31-3-2017 :

 Liabilities Rs. Assets Rs. Capital A/c Cash at bank 17,000 A 25,000 Debtors                     30,000 B 30,000 Less : provision          2,000 28,000 C 15,000 Stock 12,000 Reserve 9,000 Equipment 15,000 Creditors 21,000 Building 50,000 Bank Loan 30,000 Goodwill 12,000 Salary due 10,000 Advertisement suspense 8,000 1,40,000 1,40,000

C died on 31-8-17. As per the deed the goodwill is to valued two times of average profits. The profits for last three years are following for the purpose of goodwill,
2016-17 Profit Rs. 30,000 (after loss on sale of building Rs. 10,000)
2015-16 Loss Rs. 9,000
2014-15 Profit Rs. 20,000 (after profit on sale of plant Rs.3,000)
Debtors are valued Rs. 26,000 ;Stock Rs. 11,000;
Profits of C are to be calculated on the basis of average profits of last three years.
C was paid Rs. 10,000 immediately and the balance was paid after six months with 12% interest. Prepare C’s executorr’s account and balance sheet as un 31-8-2017.

## The solution of Question 61 Chapter 6 of +2 Part-1: –

 Revaluation A/c Particulars Amount Particulars Amount To debtors A/c 2,000 To stock A/c 1,000 By loss on revaluation A 1,000 B 1,000 C 1,000 3,000 3,000 3,000
 Partners’ Capital Account Particulars A B C Particulars A B C To revaluation A/c 1,000 1,000 1,000 By Balance b/d 25000 30,000 15,000 To goodwill A/c 4,000 4,000 4,000 By Reserve A/c 3,000 3,000 3,000 To adv. Suspense A/c 2,000 2,000 2,000 By A’s capital A/c 5,333 To c’s capital A/c 5,333 5,334 By B’s capital A/c 5,334 To c’s executors A/c 23,889 By P & L suspense A/c 2,222 To Balance c/d 15,667 20,666 – 28,000 33,000 30,889 28,000 33,000 30,889

Working Notes :

Calculation of profit to C

 Years Profit 2016-17 Profit 30,000+10,000 40,000 2015-16 Loss (-,9000) 2014-15 Profit 20,000-3,000 17,000 48,000
 Average profit = 48,000 3 = 16,000

C’s share in profit = 16,000 X (5/12) X (1/3) = 2,222

Calculation of the Goodwill

Average Profit = 16,000
Goodwill = Average profit X No. of Year’s purchase = 16000 X 3 = 32,000
C’s share = 32,000 X 1/3 = 10,667

 Journal Date Particulars L.F. Debit Credit a) A’s capital A/c Dr. 5,333 B’s capital A/c Dr. 5,334 To C’s capital A/c 10,667 (Being goodwill adjusted )
 C’s executors A/c Date Particulars Amount Particulars Amount 31-8-17 To cash A/c 10,000 By C’s capital A/c 23,889 28-2-18 To stock A/c 14,722 By interest A/c 833 24,722 24,722

 Balance Sheet Liabilities Amount Assets Amount Capital A/c Cash at bank 7,000 A 15,667 Debtors 30,000 B 20,666 Less Provision 4,000 26,000 C’s executor 13,889 Stock 11,000 Creditors 21,000 Equipment 15,000 BANK Loan 30,000 Building 50,000 Salary due 10,000 P & L Suspense A/c 2,222 1,11,222 1,11,222

Comment if you have any questions.

Also, Check out the solved question of previous Chapters: –