Mahendra, Surendra and Narendra were partners sharing profits and losses in the ratio of 5 : 3 : 2 respectively. Their Balance Sheet as on 31st March 2019 was as follows:Balance Sheet as on 31st March 2019LiabilitiesAmount (₹)AssetsAmount (₹)Capital…
Q.5 Mahendra, Surendra and Narendra were partners sharing profits and losses in the ratio of 5 : 3 : 2 respectively. Their Balance Sheet as on 31st March 2019 was as follows:
Balance Sheet as on 31st March 2019
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capital Account: | Stock | 17,000 | |
| Mahendra | 23,000 | Furniture | 18,000 |
| Surendra | 15,000 | Land and Building | 16,000 |
| Narendra | 12,000 | Bank | 37,000 |
| Bills Payable | 2,000 | ||
| Creditors | 8,000 | ||
| Bank Loan | 12,000 | ||
| General Reserve | 16,000 | ||
| 88,000 | 88,000 |
Mr. Narendra died on 30th June 2019 and the following adjustments were agreed as per deed:
- Stock, furniture, land and building are to be revalued at ₹ 16,700, ₹ 16,200 and ₹ 30,100 respectively.
- Narendra’s share in goodwill is to be valued from firm’s goodwill which was valued at 3 times of the average profit of last four years. Profit of the last four years: I year – ₹ 30,000; II year – ₹ 25,000; III year – ₹ 25,000; IV year – ₹ 40,000.
- His profit up to the death is to be calculated on the basis of profit of last year.
- Narendra was entitled to get a salary of ₹ 1,200 per month.
- Interest on capital at 10% p.a. to be allowed.
- Narendra’s drawing up to the date of his death was ₹ 900 per month.
Prepare: (A) Narendra’s Capital Account showing amount payable to his executor. (B) Give working notes for: (i) Share of goodwill due to Narendra (ii) Share of profit due to Narendra.
OR
(A) From the following information find out the current ratio: (4)
- Total assets = ₹ 22,000
- Fixed assets = ₹ 10,000
- Capital employed = ₹ 20,000
(B) Calculate the net profit ratio from the following data: (4)
- Sales = ₹ 76,000
- Cost of goods sold = ₹ 52,000
- Indirect expenses = ₹ 12,000