X, Y and Z are partners sharing profits in the ratio of 4: 3:2 with capitals (as on
1st April, 2018) X—₹7,20,000; Y— ₹4,50,000 and Z—₹2 2,70,000. Their Partnership
Deed provides that:
(i) Interest on Capital is a charge against profit and is to be paid @ 18% p.a.
(ii) Y and Z are to be given salaries @ 10,000 and 8,000 p.m. which they will
withdraw monthly.
Z has given a loan of 1,50,000 to firm on 1st October, 2018. There was no provision
for interest on loan in Partnership Deed.
X has drawn 80,000 and Y and Z, in addition to their salaries have drawn
50,000 and 30,000 respectively.
Net profit for the year ended 31st March, 2019 is 4,82,400 before the above
adjustments.
Prepare Profit and Loss Appropriation Account and Partners' Capital Accounts
for the year ended on 31st March, 2019.
Answers
Answer:
.
12th
Accountancy
Change in Profit-Sharing Ratio Among the Existing Partners
Accounting Treatment of Revaluation of Assets and Reassement of Liabilities
X and Y are partners in...
ACCOUNTANCY
X and Y are partners in a firm sharing profits in the ratio of 3:2. On 1
st
April, 2018, they admit Z as a new partner for 1/4
th
share in the profits. Z contributes following assets towards his capital and for his share of goodwill:
Stock Rs.60,000, Debtors Rs.80,000, Land Rs.1,00,000, Plant and machinery Rs.40,000. On the date of admission of Z, the goodwill of the firm was valued at Rs.6,00,000.
Pass necessary Journal entries in the books of the firm on Z
′
s admission.
January 17, 2020
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Kanchan Siddiqua
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ANSWER
JOURNAL
1. Stock a/c.... Dr. 60000
Debtors a/c... Dr. 80000
Land a/c.... Dr. 100000
Plant and machinery a/c... Dr. 40000
To Z's Capital a/c 130000
To Premium for goodwill a/c 150000
(Being capital and premium for goodwill brought in by C in the form of assets)
2. Premium for Goodwill a/c.... Dr. 150000
To X's Capital a/c 90000
To Y's Capital a/c 60000
(Being premium for goodwill distributed among partners in the ratio of 3:2)
Working Note:
1. Calculation of Z's share of goodwill:
Z's share of Goodwill= 600000 * 1/4= 150000
Z's share of capital = 280000 - 150000 = 130000
2. Distribution of premium for goodwill:
X's share= 3/5 * 150000= 90000
Y's share= 2/5 * 150000= 60000.......................
Explanation:
Prepare Profit and Loss Appropriation Account and Partners' Capital Accounts
for the year ended on 31st March, 2019.