Question 75 Chapter 6 of +2-A
75. Sunny, Honey and Rupesh were partners in a firm. On 31st March 2014, their Balance Sheet was as follows:
| Liabilities | Amount | Assets | Amount | |
| Creditors | 10,000 | Plant and Machinery | 40,000 | |
| General Reserve | 30,000 | Furniture | 15,000 | |
| Capital A/cs: | Investments | 20,000 | ||
| Sunny | 30,000 | Debtors | 20,000 | |
| Honey | 30,000 | Stock | 20,000 | |
| Rupesh | 20,000 | 80,000 | Cash | 25,000 |
| 1,20,000 | 1,20,000 |
Honey died on 31st December, 2014. The Partnership Deed provided that the representatives of the deceased partner shall be entitled to:
a Balance in the Capital Account of the deceased partner.
b Interest on Capital @ 6% per annum up to the date of his death.
c His share in the undistributed profits or losses as per the Balance Sheet.
d His share in the profits of the firm till the date of his death, calculated on the basis of the rate of net profit on sales of the previous year.
The rate of net profit on sales of the previous year was 20%. Sales of the firm during the year till 31st December 2014 was 6,00,000. Prepare Honey’s Capital Account to be presented to his executors.
The solution of Question 75 Chapter 6 of +2-A: –
| Honey’s Capital A/c |
|||||
| Particular |
Amount | Particular | Amount | ||
| To Executor’s A/c | 81,350 | By Balance b/d | 30,000 | ||
| By Interest on Capital A/c | 1,350 | ||||
| By General Reserve | 10,000 | ||||
| By Profit and Loss Suspense A/c | 40,000 | ||||
| 81,350 | 81,350 | ||||
Working Notes:
Calculation of Interest on Honey’s Capital
| Interest on capital | = | 30,000 | X | 6 | X | 9 |
| 100 | 12 | |||||
| = | Rs 1,350 |
Calculation of Honey’s share in profits
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| Profit | = | Sale | X | Rate of Profit |
| 100 |
| = | 6,00,000 | X | 20 | |
| 100 | ||||
| = | Rs 1,20,000 |
| Honey’s share in profits | = | 1,20,000 | X | 1 |
| 3 | ||||
| = | Rs 40,000 |
Calculation of Honey’s Share in General Reserve
| Honey’s share in profits | = | 30,000 | X | 1 |
| 3 | ||||
| = | Rs 10,000 |
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. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
