Question

Banwari, Girdhari and Murari are partners in a firm sharing profits and losses in the ratio of $4:5:6$. On 31st March, 2014, Girdhari retired. On that date the capitals of Banwari, Girdhari and Murari before the necessary adjustments stood at $Rs.2,00,000,Rs.1,00,000$ and $Rs.50,000$ respectively. On Girdhari's retirement, goodwill of the firm was valued at $Rs.1,14,000$. Revaluation of assets and re-assessment of liabilities resulted in a profit of $Rs.6,000$. General Reserve stood in the books of the firm at $Rs.30,000$.

The amount payable to Girdhari was transferred to his loan account. Banwari and Murari agreed to pay Girdhari two yearly instalments of $Rs.75,000$ each including interest $@10\%$ p.a. on the outstanding balance during the first two years and the balance including interest in the third year. The firm closes its books on 31st March every year.

Prepare Girdhari's loan account till it is finally paid showing the working notes clearly.

Answer 1

Girdhari’s Capital A/c

Particulars	Amt.		Particulars	Amt.
			By Balance b/d	1,00,000
			By Banwari A/c (Goodwill)	15,200
			By Murari A/c (Goodwill)	22,800
			By Revaluation A/c (Profit)	2,000
			By General Reserve A/c	10,000
To Girdhari’s Loan A/c	1,50,000
	1,50,000			1,50,000

Girdhari’s Loan A/c

Date	Particulars	Amt.	Date	Particulars	Amt.
31.3.14	To Balance c/d	1,50,000	31.3.14	By Girdhari’s Capital A/c	1,50,000
		1,50,000			1,50,000
31.3.15	To Bank A/c (60,000 + 15,000)	75,000	01.4.14	By Balance b/d	1,50,000
31.3.15	To Balance c/d	90,000	01.04.15	By Interest A/c (1,50,000 X 10%)	15,000
		1,65,000			1,65,000
31.3.16	To Bank A/c (66,000 +9,000)	75,000	01.4.15	By Balance b/d	90,000
31.3.16	To Balance c/d	24,000	31.3.16	By Interest A/c (90,000 X 10%)	9,000
		82,500			82,500
31.3.17	To Bank A/c	26,400	01.4.17	By Balance b/d	24,000
			31.3.18	By Interest A/c (24,000 X 10%)	2,400
		26,400			26,400

Working Note:

Girdhari's share in goodwill = 1,40,000 X 5/15 = 38,000

Banwari = 38,000 X 4/10 = 15,200

Murari = 38,000 X 6/10 = 22,800