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Question 68 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 68 Chapter 6 of +2-A
Question No.68 Chapter No.6 - T.S. Grewal +2 Book 2019-Solution

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Question 68 Chapter 6 of +2-A

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68. On 31st March 2014, the Balance Sheet of Pooja, Qureshi and Ross, who were partners in a firm was as under:

Liabilities Amount AssetsAmount
Sundry Creditors 2,50,000Building 2,60,000
Reserve Fund 2,00,000Investment1,10,000
Capital A/c  Qureshi’s Loan1,00,000
Pooja1,50,000 Debtors1,50,000
Qireahi1,00,000 Stock1,20,000
Ross1,00,0003,50,000Cash 60,000
  8,00,000 8,00,000

Qureshi died on 1st July 2014. The profit-sharing ratio of the partners was 2 : 1: 1. On the death of a partner, the partnership deed provided for the following:
i His share in the profits of the firm till the date of his death will be calculated on the basis of average profits of the last three completed years.
ii Goodwill of the firm will be calculated on the basis of the total profit for the last two years.
iii Interest on loan given by the firm to a partner will be charged at the rate of 6% p.a. or 4,000, whichever is more.
iv Profits for the last three years were 45,000; 48,000 and 33,000.
Prepare Qureshi’s Capital Account to be rendered to his executors

 

 

The solution of Question 68 Chapter 6 of +2-A: –

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Qureshi’s Capital A/c
Particular
AmountParticularAmount
To Drawings A/c1,04,000By Balance b/d1,00,000
To  Executor’s A/c68,875By Pooja’s Capital A/c WN113,500
  By Ross’s Capital A/c WN16,750
   By Profit & Loss Suspense A/c WN2 2,625
   By Reserve Fund A/c 2,00,000 × 1/4 50,000
  1,72,875  1,72,875

 

 

Working Notes:

Calculation of Qureshi’s Share of Goodwill

Goodwill = 48,000 + 33,000 = 81,000
Qureshi’s Share of Goodwill = 81,000 × 1/4 = 20,250
Gaining Ratio = Pooja : Ross = 2 : 1

Amount debited to Pooja’s Capital A/c=20,250X2
3
     
 =Rs 13,500

  

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Amount debited to Ross’s Capital A/c=20,250X1
3
     
 =Rs 6,750  

 

Calculation of Qureshi’’s Share of Loss till the date of his death

Average Profit of the last three years = 45,000 + 48,000 + 33,000/3 = 42,000
Qureshi’s share of loss till the date of death = Previous year’s loss × Qureshi’s Share of Loss × Months till the date of his death/12

 =42,000X1X3
412
       
 =Rs 2,625    

 


Calculation of Amount due on account of Loan given to Qureshi

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Loan given to Qureshi by a firm = 1,00,000

Amount of interest till 1st July, 2014=1,00,000X6X3
10012
       
 =Rs 1,500    

Adjustment of Goodwill

 

Total Amount due to firm on 1st July=Loan amount+Amount of Interest
     
 =1,00,000+4,000
 =Rs 1,04,000  

 

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

  • Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
  • Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
  • Chapter No. 3 – Goodwill: Nature and Valuation
  • Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
  • Chapter No. 5 – Admission of a Partner
  • Chapter No. 6 – Retirement/Death of a Partner
  • Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

  • Chapter No. 1 – Financial Statements of a Company
  • Chapter No. 2 – Financial Statement Analysis 
  • Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
  • Chapter No. 4 – Accounting Ratios
  • Chapter No. 5 – Cash Flow Statement

 

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Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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