Arun, varun , karan were partners in a firm sharing profits in the ratio of 4:3:3. ON 31.3.2014 their balance sheet was as follows: - 
Liablities Rs Assets Rs.
Capital :    Cash 8000
Arun  70000 Debtors 13000
Varun  68000 B/R 9000
B/P 12000 Furniture 27000
Karan's Loan 28000 Plant and Machinery 125000
Sundry Creditors  17000 Karan's Capital 13000
       
  195000   195000

On 30.9. 2014 karan died. Adjustments: -
His share of G/w is calculated on the basis of the year purchase of the avg. profits of last 4 years i.e 190000, 170000, 180000, 160000
His share in the profit is calculated on the basis of the year purchase of the avg. profits of last 4 years.
Int 8% on the credit bal if any in his capital
Int of loan @ 12% p.a

Please provide all the necessary accounts.



 

Dear Student,
 
Karan’s Capital Account
Dr.   Cr.
Date Particulars J.F. Amount
(Rs)
Date Particulars J.F. Amount
(Rs)
               
  Balance b/d   13,000   Karan’s Loan A/c   28,000
  Karan’s Executors A/c   2,00,430   Interest on Loan A/c   1,680
          Arun’s Capital A/c   90,000
          Varun’s Capital A/c   67,500
          Profit and Loss Suspense A/c   26,250
               
               
      2,13,430       2,13,430
               


Notes:
Average Profit=190,000+1,70,000+1,80,000+160,0004=Rs. 1,75,000Goodwill=1,75,000×3=Rs. 5,25,000Karan's Goodwill=5,25,000×310=Rs. 1,57,500Profit and Loss Suspene=1,75,000×310×612=Rs.26,250Interest on Loan=28,000×1210×612=Rs.1,680

Regards

  • 2
What are you looking for?