02 Jan 2021 6:56 pm
Practical Problems | Q 5 | Page 204
The Balance Sheet of Sohan, Rohan and Mohan who were sharing profits and Losses in the ratio of 3:2:1 as follows.
Balance Sheet as on 31st March 2019.
Mr. Rohan died on 1st October 2019 and the following adjustments were made.
1. Goodwill of the firm is valued at 30,000
2. Land and Building and Machinery were found to be undervalued by 20%
3. Investments are valued at ₹ 60,000
4. Stock to be undervalued by ₹ 5000 and a provision of 10% as debtors were required.
5. Patents were value less
6. Mr. Rohan was entitled to share in profits up to the date of death and it was decided that he may be allowed to retain his drawings as his share of profit. Rohan’s drawings till the date of death was ₹ 25000
Prepare Partners’ capital accounts.
(2) Firm’s goodwill = ₹ 30,000. Distribute among partners in their profit and loss ratio 3 : 2 : 1.
(5) Patents were valueless means it is loss for business.
(6) Rohan’s share in profit is ₹ 25,000 and his drawings is ₹ 25,000. Rohan is allowed to retain his drawings as his share of profit. Means write ₹ 25,000 as drawings on debit side and write ₹ 25,000 as Profit and Loss Suspense A/c on Credit side of Partners’ Capital A/c.