DK Goel Solutions: Change in Profit Sharing Ratio Among the Existing Partners | DK Goel Solutions - Class 12 Accountancy - Commerce PDF Download

Q1: Charu and Divya are partners in a firm. Charu was to get a commission of 10% on the net profits before charging any commission. However, Divya was to get a commission of 10% on the net profits after charging all commissions. Fill in the missing figure in the following Profit and Loss Appropriation Account of the year ended 31st March 2018.
Ans:

Working Notes:
1. Calculation of profit before charging any commission
Charu’scommission @ 10% on the net profits charging any commission = 44,000
Therefore, total profit before charging any commission = Rs. 44,000 x 100 / 10 – Rs. 4,40,000
2. Calculation of Divya’s Commission
Profit after charging Charu’s commission= Rs. 3,96,000 (Rs. 4,40,000 – Rs. 44,000)
Commission of Divya = Rs.  3,96,000 x 10/ 110 = Rs. 36,000

Q2: The total capital of the firm od Saurabh, Mohit and Nikhil was Rs. 1,00,000. The net profits for the last 3 years were: 2013-14 Rs. 40,000; 2014-15 Rs. 46,000 and 2015-16 Rs. 52,000. There was an abnormal loss of Rs. 3,000 in 2014-15. Goodwill of the firm was to be valued at 2 years purchase of the average profits of the last three years. Calculate the goodwill of the firm.
Ans:
Average Profit = Rs. 1,41,000 / 3 = Rs. 47,000
Goodwill = Average Profit x Number of year’s purchase
= Rs. 47,00 x 2 = Rs. 94,000

Q3: X, Y, and Z sharing profits and losses in the ratio 1:2:2, decided to share future profits equally with effect from 1st April 2016. On that date, the Profit and Loss Account showed a credit balance of Rs. 1,20,000. Partners do not want to distriv=bute the profit but prefer to record the change in the profit-sharing ratio by passing an adjustment entry. Yo are required to give the adjusting entry.
Ans:
Old Ration od X, Y, and Z 1/5: 2/5: 2/5
New Ration od X, Y, and Z 1/3: 1/3: 1/3
Sacrifice or Gain:
X= 1/5 – 1/3 = 3-5 / 15 = 2/15 (Gain)
Y= 2/5 – 1/3 = 6-5/ 15 = 1/ 15 (Sacrifice)
Z= 2/5 – 1/3 = 6-5/15 = 1/15 (Sacrifice)

Q4: A, B, C, and D are partners in firm sharing profits and losses in the ratio of 2:2:1:1. They decided to share profits in future in the ratio of 4:3:2:1. For this purpose goodwill of the firm was valued at Rs. 1,80,000. There was also a reserve of Rs. 60,000 in the books of the firm.
Find out the sacrifice and gaining ratio and pass necessary journal entry assuming that partners do not want to distribute the reserve.
Ans:
Old Ratio of A, B, C and D 2:2:1:1
New Ratio of A, B, C and D 4:3:1:1
Sacrifice or Gain:
A= 2/6 – 4/10 = 10-12 / 30 = 2/30 (Gain)
B= 2/6 – 3/10 = 10-9/ 30 = 1/30 (Sacrifice)
C= 1/6 – 2/10 = 5-6/ 30 = 1/30 (SAcrifice)
D= 1/6 – 1/10 = 5-3/ 30 = 2/30 (Sacrifice)