can anyone answer this ?

Dear student
REVALUATION A/C
 
PARTICULAR AMOUNT PARTICULAR AMOUNT
To patient A/C 3,000 By building A/C 5,000
To machinery A/C 2,000    
       
  5,000   5,000

A's capital account
 
Particular amount particular amount
To drawings 40,000 By balance B/D 30,000
To interest on drawings  1,800 By loan A/C 20,000
To goodwill 8,333 By profit and loss suspense A/C 4,167
To A' s executor A/C 25,784 By B 11,250
    By C 7,500
    By interest on capital  1,500
    By reserves 1,500
       
  75,917   75,917
       
       
       
       
       

WORKING NOTE:
1. Profit and loss suspense A/C =20,000×512×612=4,167
2. share of goodwill:
average profit = 19,000+15,000+20,000+18,0004= 18,000goodwill of firm = average profit×no. of years purchase = 18,000×2.5= 45,000A's share = 45,000×512=18,750
3. Gaining ratio: new ratio - old ratio
B = 712-412=312
C = 512-312=212
B:C  = 3:2
4. Interest on capital = 30,000×10100×612=1500


Regards

  • 0
What are you looking for?