# Question 71 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question No.71 Chapter No.6 - T.S. Grewal +2 Book 2019-Solution

Question 71 Chapter 6 of +2-A

71. Virad, Vishad and Roma were partners in a firm sharing profits in the ratio of 5 : 3 : 2 respectively. On 31st March, 2013, their Balance Sheet was as under:

 Liabilities Amount Assets Amount Capital A/cs: Buildings 2,00,000 Virad 3,00,000 Machinery 3,00,000 Vishad 2,50,000 Patents 1,10,000 Roma 1,50,000 7,00,000 Stock 1,00,000 Reserve Fund 60,000 Debtors 80,000 Creditors 1,10,000 Cash 80,000 8,70,000 8,70,000

Virat died on 1st October 2013. It was agreed between his executors and the remaining partners that:
i Goodwill of the firm be valued at 212 years purchase of average profits for the last three years. The average profits were 1,50,000.
ii Interest on capital be provided at 10% p.a. iii Profits for 2013-14 be taken as having accrued at the same rate as that of the previous y

## The solution of Question 71 Chapter 6 of +2-A: –

 A’s Capital Account Particular Amount Particular Amount To Executor’s A/c 5,70,000 By Balance b/d 3,00,000 By Vishad’s Capital A/c 1,12,500 By Roma’s Capital A/c 75,000 By Profit and Loss Suspense A/c 37,500 By Reserve Fund 30,000 By Interest on Capital 15,000 5,70,000 5,70,000

Working Notes:

Calculation of Gaining Ratio of Vishad and Roma:

New Ratio Vishad and Roma = 3:2
Gaining Ratio = New Ratio – Old Ratio

 Vishad’s Share = 3 – 3 5 10 = 3 10

 Roma ’s Share = 2 – 2 5 10 = 2 10

Hence, gaining ratio is 3 : 2

Calculation of Virad’s Share of Goodwill:

Goodwill of the firm = Average Profit X Number of year’s purchased

 Goodwill of Firm = 1,50,000 X 2 1 2 = Rs3,75,000

 Share of goodwill of Virad = 3,75,000 X 5 10 = Rs 1,87,500

 Vishad will give = 1,87,500 X 3 5 = Rs 1,12,500

 Roma will give = 1,87,500 X 2 5 = Rs 75,000

Calculation of Profit share of Virad:

Profit for the year = Rs 1,50,000

 Virad’s Share of Profit = 1,50,000 X 5 X 6 10 12 = Rs 37,500

Calculation of Interest on Virad ‘s Capital:

 Interest on capital = 3,00,000 X 10 X 6 100 12 = Rs 15,000

 Share of Reseve Fund = 60,000 X 5 10 = Rs 30,000

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)

• 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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