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Monika, Sonika and Mansha Were Partners in Firm Sharing Profits in the Ratio of 2:2:1 Respectively. on 31st, March 2013, Their Balance Sheet as Under:Prepare Sonika'S Capital Account as on 30th June 2013. - Accountancy

Monika, Sonika and Mansha were partners in firm sharing profits in the ratio of 2:2:1 respectively. On 31st, March 2013, their Balance Sheet as under:

Balance Sheet as on March 31, 2013
Liabilities Rs Assets Rs

Capital:

   Monika     1,80,000

   Sonika     1,50,000

   Mansha      90,000

Reserve Fund 

Creditors

 

 

 

4,20,000

1,50,000

2,40,000

Fixed Asset

Stock

Debtors

Cash

 

 

3,60,000

60,000

1,20,000

2,70,000

 

 

 

8,10,000   8,10,000

Sonika died on 30th June 2013. It was agreed between her executors and the remaining partners that:

a. Goodwill of the firm be valued at 3 years' purchase of average profits for the last four years. The average profits were Rs 2,00,000

b. Interest on capital be provided at 12% p.a.

c. Her share in the profits up to the date of death will be calculated on the basis of average profits for the last four years.

Prepare Sonika's Capital Account as on 30th June 2013.

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Solution

Sonika’s Capital Account
Dr.   Cr.
Particulars Rs Particulars Rs

 

To Executor’s A/c

 

 

 

 

 

4,74,500

 

 

 

 

By Balance b/d

By Monika’s Capital A/c

By Mansha’s Capital A/c

By Profit and Loss Suspense A/c

By Reserve Fund A/c

By Interest on Capital A/c

1,50,000

1,60,000

80,000

20,000

60,000

4,500

  4,74,500

 

4,74,500

Calculation of Gaining Ratio of Monika and Mansha:

Monika : Sonika: Mansha

Old Ratio = 2: 2: 1

New Ratio of Monika and Mansha = 2: 1

Gaining Ratio= New Ratio - old Ratio

Monika's Gain = `2/3 - 2/5 = 4/15`

Mansha's Gain = `1/3 - 1/5 = 2/15` 

Gaining Ratio  = 4:2 or 2:1

WN1: Calculation of Sonika’s Share of Goodwill

Goodwill of the firm = Average Profit x Number of year's purchase

Goodwill of the firm = `200000 xx 3 = 600000`

the share of Goodwill of Sonika's = `600000 xx 2/5 = 240000 `

Monika Will give = `240000 xx 2/3 = 160000`

Mansha will give = `240000 xx 1/3 = 80000`

WN 2: Calculation of Profit share of Sonika :

Profit for the year =2,00,000

Sonika'share of Profit = `200000 xx 3/2 xx 2/5 = 20000`

WN3: Calculation Of Interest on Sonika's capital :

Sonika's Capital =1,50,000

Interest on Capital = `150000 xx 3/12 xx 12/100 = 4500`

WN4: Sonika's share of Reserve fund:

A share of Reserve Fund = `150000 xx 2/5 = 60000`

Concept: Preparation of Deceased Partner's Capital Account, Executor's Account
  Is there an error in this question or solution?
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