Senam Hamnam and Gurunum were partners in a firm sharing profits and losses in the ratio of 5:2:3
The firm closes its books on31 March every year. On 1-7-2019 Harnam died. On his death goodwill of
the firm as valued on the basis of average profits of last four years. The profits of the last four years
His share in the past the firm all the date of his dath nertio The total amount payable w
Ennemieninsterthore transion in the books at the form
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Answer:
Explanation:
Ques: Senam, Hamnam and Gurunum were partners in a firm sharing profits
and losses in the ratio of 5 : 2 : 3. The firm closes its books on 31st March
every year. On 1-7-2019 Hamnam died. On his death goodwill of the firm
was valued on the basis of average profits of last four years. The profits of
the last four years were as follows :
`
2015 – 16 50,000
2016 – 17 80,000
2017 – 18 40,000
2018– 19 1,70,000
His share in the profits of the firm till the date of his death were ` 57,000.
The total amount payable to Hamnam’s executors was ` 3,40,000. It was
paid on 15-7-2019.
Pass necessary journal entries for the above transactions in the
books of the firm.
Solution:
Date Particulars Amount Amount
1.7.2019 Senam's Capital A/c 10625
Gurunum Capital A/c 6375
To Hamnam A/c 17000
P/L Suspense A/c 57000
To Hamnam A/c 57000
( Being Share of profit till date of death )
Hamnam capital A/c 340,000
To Hamnam executors A/c 340000
15.7.2019 Hamnam Executors A/c 340,000
To Bank A/c 340000
(Being due amount paid to Hamnam executors)
Calculation of Goodwill :
Firm 's Goodwill = 50,000 +80000+ 40,000+ 1,70,000/ 4
= 85000
Hamnam's share of goodwill = 85000 * 2/10
= 17,000