Question 59 Chapter 6 of Class 12 Part – 1 Usha Publication
59. (Journal Entries/Executor’s Ale) R, S , T were partners sharing profits and losses in the ratio of 5:3:2 respectively. On 31st December 2017 their balance sheet stood as :
| Liabilities | Rs. | Assets | Rs. |
| Sundry Creditors | 55,000 | Goodwill | 5,000 |
| Reserve fund | 30,000 | Leasehold | 1,00,000 |
| Capital A/c | Patents | 30,000 | |
| R | 1,50,000 | Machinery | 1,50,000 |
| S | 1,25,000 | Stock | 50,000 |
| T | 75,000 | Debtors | 40,000 |
| Cash at bank | 40,000 | ||
| 4,35,000 | 4,35,000 |
T died on 1st May 2018. It was agreed that :
- Goodwill valued at 2 ½ years purchase of last four years profits which were 2015- Rs. 5,000: 2015- Rs. 60,000: 2016- Rs. 80,000 and 2017- Rs. 75,000.
- Machinery be valued at Rs. 1,40,000 ;Patents be valued at Rs. 40,000 ; Leasehold be valued at RS. 1,25,000 on 1st May 218.
- For the purpose of calculating T’s share in the profits of 2018, should be taken to have served on the same sales as in 2017.
- A sum of Rs. 21,000 to be paid immediately to the executors of T and the balance to be paid in four equal half yearly installments together with interest at 10% per annum.
Pass the necessary journal entries to rent the above transactions and T’s executors
The solution of Question 59 Chapter 6 of Class 12 Part – 1 Usha Publication: –
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| Journal |
|||||
| Date | Particulars |
L.F. | Debit | Credit | |
| a) | R’s capital A/c | Dr. | 12,500 | ||
| S’s capital A/c | Dr. | 7,500 | |||
| T’s capital A/c | Dr. | 5,000 | |||
| To goodwill A/c | 25,000 | ||||
| (Being old goodwill written off ) | |||||
| b) | R’s capital A/c | Dr. | 21,875 | ||
| S’s capital A/c | Dr. | 13,125 | |||
| To T’s capital A/c | 35,000 | ||||
| (Being goodwill adjusted ) | |||||
| c) | Revaluation A/c | Dr. | 10,000 | ||
| To Machinery A/c | 10,000 | ||||
| (Being machinery revalued ) | |||||
| d) | Patents A/c | Dr. | 10,000 | ||
| Lease hold A/c | Dr. | 25,000 | |||
| To Revaluation A/c | 35,000 | ||||
| (Being assets revalued ) | |||||
| e) | Revaluation A/c | Dr. | 25,000 | ||
| To R’s capital A/c | 12,500 | ||||
| To S’s capital A/c | 7,500 | ||||
| To T’s capital A/c | 5,000 | ||||
| (Being profit on revaluation distributed ) | |||||
| f) | Reserve Fund A/c | Dr. | 30,000 | ||
| To R’s capital A/c | 15,000 | ||||
| To S’s capital A/c | 9,000 | ||||
| To T’s capital A/c | 6,000 | ||||
| (Being reserve distributed ) | |||||
| T’s capital A/c | Dr. | 1,21,000 | |||
| To Bank A/c | 21,000 | ||||
| To executors loan A/c | 1,00,000 | ||||
| (Being cheque paid to T’s Capital) | |||||
T’s Capital A/c |
|||||
| Particulars |
Amount | Particulars | Amount | ||
| To goodwill A/c | 5,000 | By balance b/d | 75,000 | ||
| To T’s Executor A/c | 1,21,000 | By reserve A/c | 6,000 | ||
| By profit & loss suspense A/c | 5,000 | ||||
| By revaluation A/c | 5,000 | ||||
| By R’s capital A/c | 21,875 | ||||
| By S’s capital A/c | 13,125 | ||||
| 1,26,000 | 1,26,000 | ||||
Working notes :
| Calculation of goodwill | = | 65000+60000+80000+75000 | x | 2.5 |
| 4 | ||||
| = | Rs 1,75,000 |
T’s share of profit for current year
Profit for 2017 ( being same for 2018 )= Rs. 75,000
Profit of frim for 4 months = 75,000 X 4/12 = Rs. 25,000
T’s share in profit = 25,000 X 2/10 = Rs. 5,000
Value of goodwill at 2 year’s purchase = 2 X 7,000 = Rs. 14,000
| White’s share in goodwill | = | 1 | x | 14,000 |
| 4 | ||||
| = | Rs 3,500 |
Calculation of share of profit of white till date of death
Profit average = Rs. 7,000
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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)
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