Question

10)
Manu, Kavita and Om were partners sharing profits and losses in the ratio of 3:2:1
Kavita died on 30 June 2020 and Manu and Om decided to share future profits in the ratio of
3:2. Her Share of profit for the intervening period was based on the sales during that period,
which were Rs.7,20,000. The rate of profit during the past four years had been 10% on Sales.
The firm closes its books on 31" March every year. Calculate Kavita's Share of Profits and
pass the necessary Journal Entry.​

Answer 1

Answer:

JOURNAL

1. Cash a/c... Dr. 350000

To C's Capital a/c 200000

To Premium for Goodwill a/c 150000

(Being capital and premium for goodwill brought in by C)

2. Premium for Goodwill a/c... Dr. 150000

To A's Capital a/c 110000

To B's Capital a/c 40000

(Being premium for goodwill distributed among the partners in the ratio of 11:4)

3. A's Capital a/c.... Dr. 55000

B's Capital a/c.... Dr. 20000

To Cash a/c 75000

(Being half of the premium for goodwill withdrawn by the partners)

Calculation of sacrificing ratio:

A's sacrifice= 3/5- 2/7= 11/35

B's sacrifice= 2/5- 2/7= 4/35

Sacrificing ratio= 11:4

Working Note:

Distribution of goodwill:

A's share= 150000 * 11/15= 110000

B's share= 150000 * 4/15= 40000

Answer 2

Answer:

The answer is Rs. 24,000.

Explanation:

i) Given,

Rate of profit = 10% of sales

ii) Hence,

Total profit = Sales x Rate of profit

                  = 720000 x 10%

                  = Rs 72000

iii) Kavita's share of profit

= Total profit x (2/6)

= 72000 x (2/6)

= Rs 24,000

iv) Hence, Kavita's share of profit is Rs. 24,000.

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