DK Goel Accountancy Class 12 Solutions Chapter 2 Change in Profit Sharing Ratio Among the Existing Partners which is outlined by expert Accountancy teachers from the latest version of DK Goel Accountancy Class 12 textbook solutions. We at BYJU’S provide DK Goel Solutions to assist students to comprehend all the theories in particular. There are numerous concepts in Accountancy, but the concepts of Admission of a partner, Accounting Ratios and Cash Flow Statement (As per AS – 3 Revised) is required.
DK Goel Solutions Class 12 – Chapter 2 – Part A
Question 1
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.
Solution:
| Dr. | Profit and Loss Appropriation Account
For the year ended 31st March 2018 |
Cr. | |
| Particular | ₹ | Particular | ₹ |
| To Charu’s Commission
(₹….x 10 / 100) |
44,000 | ||
| To Divya’s Commission | |||
| To Profit transferred to:
Charu’s Capital A/c Divya’s Capital A/c |
|||
Solution:
| Dr. | Profit and Loss Appropriation Account
For the year ended 31st March 2018 |
Cr. | |
| Particular | ₹ | Particular | ₹ |
| To Charu’s Commission
(₹4,40,00 x 10 / 100) |
44,000 | By Profit & Loss A/c | 4,40,000 |
| To Divya’s Commission
(₹3,96,00 x 10 / 100) |
36,000 | ||
| To Profit transferred to: | |||
| Charu’s Capital A/c 1,80,000
Divya’s Capital A/c 1,80,000 |
3,60,000 | ||
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 = ₹44,000 x 100 / 10 – ₹4,40,000
2. Calculation of Divya’s Commission
Profit after charging Charu’s commission= ₹3,96,000 (₹4,40,000 – ₹44,000)
Commission of Divya = ₹ 3,96,000 x 10/ 110 = ₹36,000
Question 2
The total capital of the firm od Saurabh, Mohit and Nikhil was ₹1,00,000. The net profits for the last 3 years were: 2013-14 ₹40,000; 2014-15 ₹46,000 and 2015-16 ₹52,000. There was an abnormal loss of ₹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.
Solution:
| Total Profits of last years | ₹ |
| 2013- 14 | 40,000 |
| 2014-15 (₹46,000 + Abnormal Loss ₹ 3,000) | 49,000 |
| 2015-16 | 52,000 |
Average Profit = ₹1,41,000 / 3 = ₹47,000
Goodwill = Average Profit x Number of year’s purchase
= ₹47,00 x 2 = ₹94,000
Question 3
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 ₹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.
Solution:
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)
| Date | Particular | L.F | Dr. (₹) | Cr. (₹) | |
| 2016
April 1 |
X’s Capital A/c (2/15 of 1,20,000) | Dr. | 16,000 | ||
| To Y’s Capital A/c (1/5 of 1,20,000) | 8,000 | ||||
| To Z’s Capital A/c (1/5 of 1,20,000)
(Adjustment for Profit and Loss Account balance on change in profit sharing ratio.) |
8,000 |
Question 4
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 ₹1,80,000. There was also a reserve of ₹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.
Solution:
| Value of Goodwill | ₹ 1,80,000 |
| Reserve | ₹ 60,000 |
| 2,40,000 |
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)
| Date | Particular | L.F | Dr. (₹) | Cr. (₹) | |
| A’s Capital A/c (2/30 of 2,40,000) | Dr. | 16,000 | |||
| C’s Capital A/c (1/30 of 2,40,000) | Dr. | 8,000 | |||
| To B’s Capital A/c (1/30 of 2,40,000) | 8,000 | ||||
| To D’s Capital A/c (2/30 of 2,40,000)
(Adjustment for Goodwill and reserve on change in profit sharing ratio.) |
16,000 |
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| DK Goel Accountancy Solutions Class 12 – Part A (Chapter wise) | ||
| Chapter 1 Accounting for Partnership Firms – Fundamentals | Chapter 3 Admission of a partner | |
| Chapter 4 Retirement or Death of a Partner | Chapter 5 Dissolution of a Partnership Firm | |
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