हिंदी

Vikas, Vishal and Vaibhav were partners in a firm sharing profits in the ratio of 2:2:1. The firm closes its books 31st March every year. On 31-12-2015 Vaibhav died. On that date his Capital account showed a credit balance of Rs. 3, 80,000 and Goodwill of the firm was valued at 1, 20,000. There was a debit balance of Rs. 50,000 in the profit and loss account. - Accountancy

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प्रश्न

Vikas, Vishal and Vaibhav were partners in a firm sharing profits in the ratio of 2:2:1. The firm closes its books 31st March every year. On 31-12-2015 Vaibhav died. On that date his Capital account showed a credit balance of Rs. 3, 80,000 and Goodwill of the firm was valued at 1, 20,000. There was a debit balance of Rs. 50,000 in the profit and loss account. Vaibhav's share of profit in the year of his death was to be calculated on the basis of the average profit of last five years. The average profit of last five years was Rs. 75,000.

Pass necessary journal entries in the books of the firm on Vaibhav's death.

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उत्तर

Journal

Date Particulars L.F. Dr. (Rs.) Cr. (Rs.)
 

Vikas’s Capital A/c                                                                                                                          Dr

Vishal’s Capital A/c                                                                                                                         Dr

            To Vaibhav’s Capital A/c

(Being adjustment of goodwill done in gaining ratio)

 

Vikas’s Capital A/c                                                                                                                           Dr

Vishal’s Capital A/c                                                                                                                          Dr

Vaibhav’s Capital A/c                                                                                                                       Dr

             To Profit and Loss A/c

(Being debit balance in P & L written off among all partners in old ratio)

 

Profit and Loss Suspense A/c                                                                                                            Dr

             To Vaibhav’s Capital A/c

(Being Vaibhav’s share of profit up to date of death dispensed through P&L Suspense A/c)

 

Vaibhav’s Capital A/c                                                                                                                       Dr

              To Vaibhav’s Executor A/c

(Being amount due to Vaibhav transferred to his Executor A/c)

 

12,000

12,000

 

 

 

20,000

20,000

10,000

 

 

 

11,250

 

 

 

4,05,250

 

 

 

 

24,000

 

 

 

 

 

50,000

 

 

 

11,250

 

 

 

4,05,250

 

 

Working Notes:

WN 1: Calculation of Vaibhav’s Share of Goodwill

Vaibhav's Share of Goodwill = Firm's Goodwill x His Profit Share

                                         = 1,20,000 x (1/5)

                                         = 24,000

24,000 will be borne by gaining partners in gaining ratio

Since, nothing is specified; it is assumed that continuing partners gain in their old profit sharing ratio of 2:2

Vikas's gain = 24,000 x (2/4) = 12,000

Vishal's gain = 24,000 x (2/4) = 12,000

 

WN 2 : Calculation of Share of Debit balance in P&L A/c

Vikas's Share = 50,000 x (2/5) = 20,000

Vishal's Share = 50,000 x (2/5) = 20,000

Vaibhav's Share = 50,000 x (1/5) = 10,000

 

WN 3 : Calculation of Share in Profit (earned during the year)

Vaibhav's Share = Average Profits x Number of Months Vaibhav Remained x His Profit Share

                        = 75,000 x (9/12) x (1/5) = 11,250

 

WN 4 : Calculation of Amount transferred to Vaibhav's Executor A/c

Amount due to Vaibhav = Capital + Credit Items - Debit Items

                                   = 3,80,000 + 24,000 - 10,000 + 11,250

                                   = 4,05,250

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2015-2016 (March) Delhi Set 1

वीडियो ट्यूटोरियलVIEW ALL [2]

संबंधित प्रश्न

State any three circumstances other than (i) admission of a new partner; (ii) retirement of a partner and (iii) death of a partner, when need for valuation of goodwill of a firm may arise.


Vivek, Viney and Vijay were partners in a firm sharing profits in the ratio of 2:1:2. The firm closes its books on 31st March every year. On 31-12-2014 Viney died. On that date his capital account showed a debit balance of Rs 10,000 and Goodwill of the firm was valued at Rs 2, 40,000. There was a debit balance of Rs 7,000 in the profit and loss account. Viney's share of profit in the year of his death will be calculated on the basis of average profit of last 5 years which was Rs 90,000.

Pass necessary journal entries in the books of the firm on Viney's death.


For which share of Goodwill a partner is entitled at the time of his retirement?


How does the market situation affect the value of goodwill of a firm?


What is a Goodwill?

 


State 'True' or 'False'
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State 'True' or 'False'
On admission of a partner, the amount of goodwill brought in cash is credited to goodwill account.


Explain the treatment of goodwill at the time of retirement or on the event of death of a partner?


Aparna, Manisha and Sonia are partners sharing profits in the ratio of 3:2:1. Manisha retires and goodwill of the firm is valued at Rs 1,80,000. Aparna and Sonia decided to share future in the ratio of 3:2. Pass necessary Journal entries.


Asin and Shreyas are partners in a firm. They admit Ajay as a new partner with 1/5th share in the profits of the firm. Ajay brings ₹ 5,00,000 as his share of capital. The value of the total assets of the firm was ₹ 15,00,000 and outside liabilities were valued at ₹ 5,00,000 on that date. Give the necessary Journal entry to record goodwill at the time of Ajay's admission. Also show your workings.


X and Y are partners with capitals of ₹ 50,000 each. They admit Z as a partner for 1/4th share in the profits of the firm. Z brings in ₹ 80,000 as his share of capital. The Profit and Loss Account showed a credit balance of ₹ 40,000 as on date of admission of Z.
Give necessary journal entries to record the goodwill.


Mohan and Sohan were partners in a firm sharing profits and losses in the ratio of 3 : 2. They admitted Ram for 1/4th share on 1st April, 2019. It was agreed that goodwill of the firm will be valued at 3 years' purchase of the average profit of last 4 years ended 31st March, were ₹ 50,000 for 2015-16, ₹ 60,000 for 2016-17, ₹ 90,000 for 2017-18 and ₹ 70,000 for 2018-19. Ram did not bring his share of goodwill premium in cash. Record the necessary Journal entries in the books of the firm on Ram's admission when:
(a) Goodwill appears in the books at ₹ 2,02,500.
(b) Goodwill appears in the books at ₹ 2,500.
(c) Goodwill appears in the books at ₹ 2,05,000. 


A and B are partners sharing profits in the ratio of 3 : 2. Their books show goodwill at ₹ 2,000. C is admitted as partner for 1/4th share of profits and brings in ₹ 10,000 as his capital but is not able to bring in cash for his share of goodwill ₹ 3,000. Draft Journal entries.


Anu and Bhagwan were partners in a firm sharing profits in the ratio of 3 : 1. Goodwill appeared in the books at ₹ 4,40,000. Raja was admitted to the partnership. The new profit-sharing ratio among Anu, Bhagwan and Raja was 2 : 2 : 1. Raja brought ₹ 1,00,000 for his capital and necessary cash for his goodwill premium. Goodwill of the firm was valued at ₹ 2,50,000. Record necessary Journal entries in the books of the firm for the above transactions.


A and B are partners sharing profits and losses in the ratio of 2 : 1. They take C as a partner for 1/5th share. Goodwill Account appears in the books at ₹ 15,000. For the purpose of C's admission, goodwill of the firm is valued at ₹ 15,000. C is to pay proportionate amount as premium for goodwill which he pays to A and B privately. Pass necessary entries.


When goodwill is withdrawn by the partner ________ account is credited.


Write a word/phrase/term which can substitute the following statement.

Method under which calculation of goodwill is done on the basis of extra profit earned above the normal profit.


State True or False with reason.

When goodwill is paid privately to the partners, it is not recorded in the books.


Find the Odd one.


Why is a new partner admitted?


What is the super profit method of calculation of goodwill?


Amount brought by a new partner for his share in goodwill is known as _____________.


The amount of goodwill is paid by the new partner:


Madhav, Madhusudan and Mukund were partners in Jaganath Associates. They decided to dissolve the firm on 31st March 2021. Pass necessary journal entries for the following transactions after various assets (other than cash) and third-party liabilities have been transferred to realization account:

  1. Old machine fully written off was sold for ₹ 42,000 while a payment of ₹ 6,000 is made to bank for a bill discounted being dishonoured.
  2. Madhusudan accepted an unrecorded asset of ₹80,000 at ₹75,000 and the balance through cheque, against the payment of his loan to the firm of ₹1,00,000.
  3. Stock of book value of ₹30,000 was taken by Madhav, Madhusudan and Mukund in their profit sharing ratio.
  4. The firm had paid realization expenses amounting to ₹5,000 on behalf of Mukund.
  5. There was a vehicle loan of ₹ 2,00,000 which was paid by surrender of asset to the bank at an agreed value of ₹ 1,40,000 and the shortfall was met from firm’s bank account.

Gini, Bini and Mini were in partnership sharing profits and losses in the ratio of 5:2:2. Their Balance Sheet as at 31st March, 2021 was as follows:

Balance Sheet as at 31st March,2021
Liabilities Amount (₹) Assets Amount (₹)
Sundry Creditors   56,500 Cash   1,17,300
Bank Overdraft   61,500 Debtors 38,000  
Workmen’s Compensation Reserve   32,000 Less: Provision For Doubtful Debts (2,300) 35,700
Capitals:     Inventories   1,34,000
Gini 4,60,000   Machinery   1,00,000
Bini 3,00,000   Furniture   1,80,000
Mini 2,90,000 10,50,000 Building   5,70,000
      Goodwill   63,000
    12,00,000     12,00,000

On 31st March, 2021, Gini retired from the firm. All the partners agreed to revalue the assets and liabilities on the following basis:

  1. Bad debts amounted to ₹ 5,000. A provision for doubtful debts was to be maintained at 10% on debtors.
  2. Partners have decided to write off existing goodwill.
  3. Goodwill of the firm was valued at ₹ 54,000 and be adjusted into the Capital Accounts of Bini and Mini, who will share profits in future in the ratio of 5:4.
  4. The assets and liabilities valued as: Inventories ₹1,30,000; Machinery ₹ 82,000; Furniture ₹1,95,000 and Building ₹ 6,00,000.
  5. Liability of ₹23,000 is to be created on account of Claim for Workmen Compensation.
  6. There was an unrecorded investment in shares of ₹ 25,000. It was decided to pay off Gini by giving her unrecorded investment in full settlement of her part payment of ₹ 28,000 and remaining amount after two months.

Prepare Revaluation Account and Partners’ Capital Accounts as on 31st March, 2021.


When the new partner is admitted goodwill can be treated in how many ways?


What would be the journal entry for revaluation of an increase in the value of a liability?


Harry, Pammy and Sunny are partners sharing profits in the ratio of 3:2:1. Goodwill is appearing in the books at a value of Rs. 60, 000. What is the journal entry for the following case?


If goodwill is not brought in cash by the new partner, it should be debited to his ______ Account.


When the value of goodwill is not specified at the time of admission of a partner is called ______.


Doremon, Shinchan and Nobita are partners sharing profits and losses in the ratio of 3 : 2 : 1. With effect from 1st April, 2022 they agree to share profits equally. For this purpose, goodwill is to be valued at two year’s purchase of the average profit of the last four years which were as follows:

Year ending on 31st March, 2019 ₹ 50,000 (Profit)
Year ending on 31st March, 2020 ₹ 1,20,000 (Profit)
Year ending on 31st March, 2021 ₹ 1,80,000 (Profit)
Year ending on 31st March, 2022 ₹ 70,000 (Loss)

On 1st April, 2021 a Motor Bike costing ₹ 50,000 was purchased and debited to travelling expenses account, on which depreciation is to be charged @ 20% p.a by Straight Line Method. The firm also paid an annual insurance premium of ₹ 20,000 which had already been charged to Profit and Loss Account for all the years.

Journalise the transaction along with the working notes.


Fill in the blank.

______  =  `("Total Profit")/("Number of Years")`


______ means profit which is earned over and above the normal profit.


______ = Average profit x No. of years of purchase


Aman and Vinod are partners in a firm. Their Balance Sheet showed:

Gross Debtors: ₹ 1,52,000

Provision for doubtful debts: ₹ 1,000

On Milin’s admission as a new partner, the assets and liabilities are to be revalued as:

  1. Unaccounted accrued income of ₹ 10,000 to be provided for.
  2. Bills Payable of ₹ 10,000 which were recorded, to be discharged at a rebate of 10%.
  3. Debtors of ₹ 2,000 to be irrecoverable.
  4. Provision for doubtful debts to be provided @ 2% of the debtors.

What is the net effect of revaluation of assets and liabilities?


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