5 Views

Question : Sharma, Verma and Goyal are partners in a firm. On 1st April 2012 the balances in their
Capital Accounts were as follows:
Sharma Rs. 4,00,000; Verma Rs. 4,20,000 and Goyal Rs. 3,70,000. The firm closes its accounts every year on 31st March. Verma died on 30th September 2012. In the event of the death of any partner following are the provisions in the Partnership Deed:
(i) Interest on Capital will be calculated at the rate of $10 \%$ p.a.
(ii) The deceased partner; 's legal representative will be paid Rs. 35,000 for his share of goodwill.
(iii) The firm had a Reserve Fund of Rs. 2,10,000. The deceased partner will be paid his share in the Reserve Fund.
(iv) His share of profit till the date of death will be calculated based on sales. It is also specified that the sales during the year 2011-12 were Rs. $15,00,000$. The sales from 1st April 2012 to 30th September 2012 were Rs. 3,00,000. The profit of the firm for the year ending 31st March 2012 was Rs. 3,00,000.
Question:
Deceased 's partners share of profit will be ____________or profit and loss suspense account will be______________.

Option 1: debited by Rs 20,000

Option 2: credited by Rs 20,000

Option 3: debited by Rs 60,000

Option 4: Credited by Rs 60,000


Team Careers360 1st Jan, 2024
Answer (1)
Team Careers360 13th Jan, 2024

Correct Answer: debited by Rs 20,000


Solution : Answer = debited by Rs 20,000

Verma's capital a/c
By Verma's executor a/c (b/f) 5,66,000 By Bal b/d 4,20,000
By IOC 21,000
($4,20,000 \times \frac{10}{100} \times \frac{6}{12}$)
By Reserve fund 70,000
($2,10,000 \times \frac{1}{3}$)
By Sharma & Goyal capitals a/c 35,000
By P & L suspense a/c 20,000
5,66,000 5,66,000

$\frac{3,00,000}{15,00,000}$×3,00,000= 60,000$\times \frac{1}{3}$= 20,000.
Hence, the correct option is 1.

Related Questions

UPES Integrated LLB Admission...
Apply
Ranked #28 amongst Institutions in India by NIRF | Ranked #9 in India by QS University Rankings 2023
Jindal Global Law School Admi...
Apply
Ranked #1 Law School in India & South Asia by QS- World University Rankings | Merit cum means scholarships
Symbiosis Law School Pune Adm...
Apply
NAAC A++ Accredited | Ranked #5 by NIRF
Nirma University Law Admissio...
Apply
Grade 'A+' accredited by NAAC
Nirma University MBA Admissio...
Apply
Highest CTC 70 LPA | Avg CTC 11.22 LPA | Ranked #55 by NIRF
ISBR Business School PGDM Adm...
Apply
Ranked as Platinum Institute by AICTE for 5 years in a row | Awarded Best Business School of the Year
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books