Question

2020-2021)
0
y at 1:29 PM
Sita, Reeta and Geeta are partners in a firm sharing profits and losses in the ratio of 4 :3 :1.
As per
the terms of Partnership Deed on the death of any partner, her share of Goodwill was
to be valued at 50% of the net profits credited to that Partner's Capital Account during the
last three completed years before her death. Sita died on 29th February, 2012. The profits for
the last five years were: 2007—360,000; 2008–397,000; 2009–31,05,000; 2010–30,000 and
2011 - 84,000.
On the date of Sita's death, Building was found undervalued by 80,000, which was to be
considered. Calculate amount of Sita's share of Goodwill in the firm and record the adjustment
Journal entries of Goodwill and revaluation of Building. The new profit-sharing ratio between
Reeta and Geeta will be equal.
(Delhi 2012 C, Modified)
Solution
HW 1

Answer 1

Answer:

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