Page 201 - VIRANSH COACHING CLASSES

Balance Sheet as on 1 July 2019
st
Liabilities Amt ` Amt ` Assets Amt ` Amt `
Capital Account : Plant & Machinery 40,000
Rakesh 29,100 Add : Appreciation 4,000 44,000
Mahesh 19,400 Motor Truck 20,000
Mukesh’s Executor’s 15,250 Less : Depreciation 2,000 18,000
Loan A/c Debtors 16,000
Creditors 8,000 Investment 18,000

Bank Loan 20,000 Less : Reduction 1,000 17,000
Bills Payable 18,000 Bank 14,000
Profit & Loss Suspense A/c 750
1,09,750 1,09,750

Working Note:
1. Valuation of Goodwill
Total Profits = 6,000 + 12,000 + 7,000 + 11,000 + 24,000
= ` 60,000
60,000
Average Profit = = ` 12,000
5
Goodwill = 12,000 × 2 = ` 24,000
1
Mukesh’s Share in Goodwill = 24,000 × = ` 4,000
6
Goodwill is divided and debited to Rakesh and Mahesh’s Capital A/c in the ratio of 3:2
3
Rakesh = 4000 × = ` 2,400
5

2
Mahesh = 4000 × = ` 1,600
5

2. Calculation of Mukesh’s share in profit from 1st April 2019 to 1st July 2019

Total Profit of current year = Average profit of last 2 years profit

12,000 + 24,000 36,000
= 2 = 2 = `18,000

Proportional Profit = 18,000 × 3 = ` 4,500
12
1
Mukesh’s share in profit = 4,500 × = ` 750
6

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