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Accountancy · 2024 · 3 marks
CBSE 2024 · Region 4 · Set 1 · Q19
Aayush and Krish are partners sharing profits and losses equally. They decided to admit Vanish for an equal share in the profits. For this purpose,…
Aayush and Krish are partners sharing profits and losses equally. They decided to admit Vanish for an equal share in the profits. For this purpose, the goodwill of the firm was to be valued at four years purchase of super profits. The balance sheet of the firm on $\displaystyle 31.3.2023$ before admission of Vanish was as follows :
Balance Sheet of Aayush and Knish as on $\displaystyle 31.3.2023$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capitals : | Machinery | $\displaystyle 75{,}000$ | |
| Aayush $\displaystyle 90{,}000$ | Furniture | $\displaystyle 15{,}000$ | |
| Krish $\displaystyle 50{,}000$ | $\displaystyle 1{,}40{,}000$ | Stock | $\displaystyle 30{,}000$ |
| General Reserve | $\displaystyle 20{,}000$ | Debtors | $\displaystyle 20{,}000$ |
| Loan | $\displaystyle 25{,}000$ | Cash | $\displaystyle 50{,}000$ |
| Creditors | $\displaystyle 5{,}000$ | ||
| $\displaystyle 1{,}90{,}000$ | $\displaystyle 1{,}90{,}000$ |
The normal rate of return is $\displaystyle 1$'2.% per annum. Average profit of the firm for the last four years was ₹ $\displaystyle 30$,000. Calculate Vans f's share of Goodwill.
Varun, Tarun, Arum and Barun were partners in a firm sharing profits in the ratio of $\displaystyle 5$:$\displaystyle 3$:$\displaystyle 2$:2. Arun retired on 31st March, 2023. Varun, Tarun and Barun decided to share future profits equally. On Arun's retirement, Goodwill of the firm was valued at ₹ $\displaystyle 9{,}00$,000. Showing your workings clearly, pass the necessary Journal entry for treatment of Goodwill on Arun's retirement without opening goodwill account.
Marking-scheme solution
Capital Employed= Aayush’s Capital+ Krish’s Capital + General Reserve
= ₹$\displaystyle 90{,}000$+₹$\displaystyle 50{,}000$+₹$\displaystyle 20{,}000$
= ₹$\displaystyle 1{,}60{,}000$
Or
Capital Employed= Total Assets- External Liabilities (Loan +Creditors)
= ₹$\displaystyle 1{,}90{,}000$-₹$\displaystyle 25{,}000$-₹$\displaystyle 5{,}000$
=₹$\displaystyle 1{,}60{,}000$
Capital Employed= ₹$\displaystyle 1{,}60{,}000$
Normal Profit= $\displaystyle 12$% of Capital Employed
= $\displaystyle 12$/$\displaystyle 100$ x ₹$\displaystyle 1{,}60{,}000$
= ₹$\displaystyle 19{,}200$
Average Profit = ₹$\displaystyle 30{,}000$
Super Profit = Average Profit - Normal Profit
= ₹$\displaystyle 30{,}000$- ₹$\displaystyle 19{,}200$
= ₹$\displaystyle 10{,}800$
Goodwill= Super Profit x No. of years of purchase
Firm’s Goodwill = ₹$\displaystyle 10{,}800$ x $\displaystyle 4$
=₹ $\displaystyle 43{,}200$
Vansh’s share of Goodwill= ₹$\displaystyle 43{,}200$ x $\displaystyle 1$/$\displaystyle 3$
= ₹$\displaystyle 14{,}400$
Or
Q.(b) Varun, Tarun…………………………………………
Ans.
Books of Varun,Tarun, Arun and Barun
Journal
L.F Debit Credit
Date Particulars Amount Amount
(₹) (₹)
Tarun’s Capital A/c Dr $\displaystyle 75{,}000$
$\displaystyle 2023$ Barun’s Capital A/c. Dr $\displaystyle 1{,}50{,}000$
To Varun’s Capital A/c
$\displaystyle 75{,}000$
March
To Arun’s Capital A/c $\displaystyle 1{,}50{,}000$
$\displaystyle 31$
(Share of goodwill adjusted to capital
accounts of partners in their gaining ratio
$\displaystyle 1$:$\displaystyle 2$)
Working Notes:
Calculation of Gaining Share:-
Gaining Share= New Share- Old Share
Varun’s Gain= $\displaystyle 1$/$\displaystyle 3$-$\displaystyle 5$/$\displaystyle 12$= -$\displaystyle 1$/$\displaystyle 12$ (Sacrifice)
Tarun’s Gain= $\displaystyle 1$/$\displaystyle 3$- $\displaystyle 3$/$\displaystyle 12$= $\displaystyle 1$/$\displaystyle 12$
Barun’s Gain= $\displaystyle 1$/$\displaystyle 3$-$\displaystyle 2$/$\displaystyle 12$= $\displaystyle 2$/$\displaystyle 12$
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CBSE Class 12 Accountancy past-paper question from the 2024 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.