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.
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`
