Question : A, B and C were carrying on business with the following assets with effect from 1st April, 2018 : Furniture Rs.18,000; Machine Rs.72,000; Cash Rs.10,000; Debtors Rs.20,000. Their profit-sharing ratio was 5:3:2. Capital is also shared in the same ratio. B died on 30th September, 2018. His son claimed his father's interest in the firm.
The following was the settlement:
(1) Allow his capital to his credit on the date of death.
(2) Give 5% p.a. interest on his capital.
(3) He had been drawing @ Rs. 600 per month which he withdrew at the beginning of each month. He be allowed to retain these drawings as a part of his share of profit.
(4) Interest @ 6% p.a. be charged on his drawings.
(5) Goodwill was evaluated twice the average of profits which were Rs.21,000.
Question:
B's share of profit will be___________.
Option 1: Debited profit and loss suspense account Rs 3,150
Option 2: Credited profit and loss suspense account Rs 2,150
Option 3: Debited profit and loss account by Rs 3,600
Option 4: Credited profit and loss account by Rs 3,600
Correct Answer: Debited profit and loss suspense account Rs 3,150
Solution : Answer = profit and loss suspense account debited by Rs 3150
| B's capital a/c | |||
| To Drawings(600×6) | 3,600 | By bal c/d | 36,000 |
| To Int on drawings | 63 | By Int on capital | 1,000 |
| To B's executors a/c(b/f) | 49,087 | By Profit & loss suspense | 3,150 |
| (21,000×6/12×3/11) | |||
| A's capital | 9,000 | ||
| B's capital | 3,600 | ||
| 52,750 | 52,750 | ||
Hence, the correct option is 1.
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