Accountancy

X, Y and Z were partners in a firm sharing profits and losses in the 5: 4: 3. Their Balance Sheet on 31st March, 2020 was as follows:

LiabilitiesAmount(Rs.)AssetsAmount(Rs.)Creditors2,00,000Building2,00,000Employees' Provident Fund1,50,000Machinery3,00,000General Reserve36,000Furniture1,10,000Investment Fluctuation Reserve14,000Investment (Market value Rs. 86,000)1,00,000Capital A/c :Debtors80,000  X - 3,00,000Cash at Bank1,90,000  Y - 2,50,000 Advertisement Suspense 1,20,000  Z - 1,50,0007,00,000  11,00,000 11,00,000  X died on 1st October, 2020 and Y and Z decide to share future profits…

Continue ReadingX, Y and Z were partners in a firm sharing profits and losses in the 5: 4: 3. Their Balance Sheet on 31st March, 2020 was as follows:

The Balance Sheet of X, Y and Z as at 31st March, 2020 was:

LiabilitiesAmount(Rs.)AssetsAmount(Rs.)Bills Payable2,000Cash at Bank5,800Employees' Provident Fund5,000Bills Receivable800Workmen Compensation Reserve6,000Stock9,000General Reserve6,000Sundry Debtors16,000Loans7,100Furniture2,000Capital A/c :Plant and Machinery6,500X - 22,750Building30,000Y - 15,250Advertising Suspense6,000Z - 12,00050,000  76,100 76,100 The profit-sharing ratio was 3: 2: 1. Z died on 31st July,…

Continue ReadingThe Balance Sheet of X, Y and Z as at 31st March, 2020 was:

Kavita, Leena and Monica are partners in firm sharing profits in the ratio of 1: 1: 3 respectively. Their Capital Accounts showed the following balances on 31st March, 2012: Kavita Rs. 70,000; Leena Rs. 65,000 and Monica Rs. 2,10,000. Firm closes its accounts every year on 31st March. Kavita died on 30th September, 2012. In the event of death of any partner, the Partnership Deed provides for the following: (a) Interest on capital will be calculated at the rate of 6% p.a. (b) The deceased partner’s share in the goodwill of the firm will be calculated on the basis of 2 years’ purchase of the average profit of last three years. The profits of the firm for the last three years were Rs. 90,000; Rs. 1,00,000 and Rs. 1,10,000 respectively. (c) Her share in the Reserve Fund of the firm will be paid. The Reserve Fund of the firm was Rs. 60,000 at the time of Kavita’s death. (d) Her share of profit till the date of death will be calculated on the basis of sales. It is also specified that the sales during the year 2011-12 were Rs. 20,00,000. The sales from 1st April, 2012 to 30th September, 2012 were Rs. 4,00,000. The profit of the firm for the year ending 31st March, 2012 was Rs. 2,00,000. Prepare Kavita’s Capital Account to be presented to his legal representative.

SOLUTION

Continue ReadingKavita, Leena and Monica are partners in firm sharing profits in the ratio of 1: 1: 3 respectively. Their Capital Accounts showed the following balances on 31st March, 2012: Kavita Rs. 70,000; Leena Rs. 65,000 and Monica Rs. 2,10,000. Firm closes its accounts every year on 31st March. Kavita died on 30th September, 2012. In the event of death of any partner, the Partnership Deed provides for the following: (a) Interest on capital will be calculated at the rate of 6% p.a. (b) The deceased partner’s share in the goodwill of the firm will be calculated on the basis of 2 years’ purchase of the average profit of last three years. The profits of the firm for the last three years were Rs. 90,000; Rs. 1,00,000 and Rs. 1,10,000 respectively. (c) Her share in the Reserve Fund of the firm will be paid. The Reserve Fund of the firm was Rs. 60,000 at the time of Kavita’s death. (d) Her share of profit till the date of death will be calculated on the basis of sales. It is also specified that the sales during the year 2011-12 were Rs. 20,00,000. The sales from 1st April, 2012 to 30th September, 2012 were Rs. 4,00,000. The profit of the firm for the year ending 31st March, 2012 was Rs. 2,00,000. Prepare Kavita’s Capital Account to be presented to his legal representative.

R, S and T were partners sharing profits and losses in the ratio of 5: 3: 2 respectively. On 31st March, 2018, their Balance Sheet stood as:

LiabilitiesAmount(Rs)AssetsAmount(Rs)Sundry Creditors40,000Goodwill25,000Bills Payable15,000Leasehold1,00,000Workmen Compensation Reserve30,000Patents30,000Capital A/c :Machinery1,50,000R -1,50,000Stock50,000S - 1,25,000Debtors40,000T - 75,0003,50,000Cash at Bank40,000 4,35,000 4,35,000 T died on 1st August, 2018. It was agreed that:(a) Goodwill be valued at 212 years' purchase of average of…

Continue ReadingR, S and T were partners sharing profits and losses in the ratio of 5: 3: 2 respectively. On 31st March, 2018, their Balance Sheet stood as:

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:

LiabilitiesAmount(Rs.)AssetsAmount(Rs.)Capital A/c :Buildings2,00,000Virad - 3,00,000 Machinery3,00,000Vishad - 2,50,000Patents1,10,000Roma - 1,50,0007,00,000Stock1,00,000Reserve Fund 60,000Debtors80,000Creditors1,10,000Cash80,000 8,70,000 8,70,000 Virad died on 1st October, 2013. It was agreed between his executors and the remaining partners that:(i) Goodwill of the firm…

Continue ReadingVirad, 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:

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

LiabilitiesAmount(Rs.)AssetsAmount(Rs.)Sundry Creditors2,50,000Building2,60,000Reserve Fund2,00,000Investment1,10,000Capital A/c :Qureshi's Loan1,00,000Pooja - 1,50,000Debtors1,50,000Qureshi - 1,00,000Stock1,20,000Ross - 1,00,000 3,50,000Cash60,000 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,…

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

Vikas, Gagan and Momita were partners in a firm sharing profits in the ratio of 2 : 2 : 1. The firm closes its books on 31st March every year. On 30th September, 2014 Momita died. According to the provisions of Partnership Deed the legal representatives of a deceased partner are entitled for the following in the event of his/her death: (a) Capital as per the last Balance Sheet. (b) Interest on capital at 6% per annum till the date of her death. (c) Her share of profit to the date of death calculated on the basis of average profit of last four years. (d) Her share of goodwill to be determined on the basis of three years’ purchase of the average profit of last four years. The profits of last four years were:

Year2010-112011-122012-132013-14Profit (Rs.)30,00050,00040,00060,000 The balance in Momita's Capital Account on 31st March, 2014 was Rs. 60,000 and she had withdrawn Rs. 10,000 till date of her death. Interest on her drawings…

Continue ReadingVikas, Gagan and Momita were partners in a firm sharing profits in the ratio of 2 : 2 : 1. The firm closes its books on 31st March every year. On 30th September, 2014 Momita died. According to the provisions of Partnership Deed the legal representatives of a deceased partner are entitled for the following in the event of his/her death: (a) Capital as per the last Balance Sheet. (b) Interest on capital at 6% per annum till the date of her death. (c) Her share of profit to the date of death calculated on the basis of average profit of last four years. (d) Her share of goodwill to be determined on the basis of three years’ purchase of the average profit of last four years. The profits of last four years were:

X and Y are partners. The Partnership Deed provides inter alia: (a) That the Accounts be balanced on 31st March every year. (b) That the profits be divided as: X one-half, Y one-third and carried to a Reserve one-sixth. (c) That in the event of the death of a partner, his Executors be entitled to be paid: (i) The Capital to his credit till the date of death. (ii) His proportion of profits till the date of death based on the average profits of the last three completed years. (iii) By way of Goodwill, his proportion of the total profits for the three preceding years. (d) BALANCE SHEET as at 31st March, 2021

LiabilitiesAmount(Rs.)AssetsAmount(Rs.)Capital A/c : Sundry Assets21,000 X - 9,000   Y - 6,00015,000 Reserve 3,000 Creditors3,000  21,000 21,000 Profits for three years were: 2019 − Rs. 4,200; 2020 − Rs. 3,900; 2021 − Rs. 4,500.Y died on 1st August, 2021. Prepare necessary accounts. SOLUTION

Continue ReadingX and Y are partners. The Partnership Deed provides inter alia: (a) That the Accounts be balanced on 31st March every year. (b) That the profits be divided as: X one-half, Y one-third and carried to a Reserve one-sixth. (c) That in the event of the death of a partner, his Executors be entitled to be paid: (i) The Capital to his credit till the date of death. (ii) His proportion of profits till the date of death based on the average profits of the last three completed years. (iii) By way of Goodwill, his proportion of the total profits for the three preceding years. (d) BALANCE SHEET as at 31st March, 2021

Iqbal and Kapoor are in partnership sharing profits and losses in 3: 2. Kapoor died three months after the date of the last Balance Sheet. According to the Partnership Deed, the legal heir is entitled to the following: (a) His capital as per the last Balance Sheet. (b) Interest on above capital @ 3% p.a. till the date of death. (c) His share of profits till the date of death calculated on the basis of last year’s profits. His drawings are to bear interest at an average rate of 2% on the Amount irrespective of the period. The net profits for the last three years, after charging insurance premium, were Rs. 20,000; Rs. 25,000 and Rs. 30,000 respectively. Kapoor’s capital as per Balance Sheet was Rs. 40,000 and his drawings till the date of death were Rs. 5,000. Draw Kapoor’s Capital Account to be rendered to his representatives.

SOLUTION

Continue ReadingIqbal and Kapoor are in partnership sharing profits and losses in 3: 2. Kapoor died three months after the date of the last Balance Sheet. According to the Partnership Deed, the legal heir is entitled to the following: (a) His capital as per the last Balance Sheet. (b) Interest on above capital @ 3% p.a. till the date of death. (c) His share of profits till the date of death calculated on the basis of last year’s profits. His drawings are to bear interest at an average rate of 2% on the Amount irrespective of the period. The net profits for the last three years, after charging insurance premium, were Rs. 20,000; Rs. 25,000 and Rs. 30,000 respectively. Kapoor’s capital as per Balance Sheet was Rs. 40,000 and his drawings till the date of death were Rs. 5,000. Draw Kapoor’s Capital Account to be rendered to his representatives.