Ajay, Salil and Ravi were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Ajay died on 20th February 2023. The Balance Sheet of the firm on that date was as follows:
Ajay, Salil and Ravi were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Ajay died on 20th February 2023. The Balance Sheet of the firm on that date was as follows:
| Liabilities | ₹ | Assets | ₹ |
| Creditors
General Reserve Loan by Ajay Capital A/cs: Ajay Salil Ravi |
19,000 20,000 7,000 12,000 16,000 10,000 |
Machinery
Furniture Stock Debtors Cash Profit & Loss A/c |
41,000 6,000 9,000 15,000 3,000 10,000 |
| 84,000 | 84,000 |
According to the Partnership Deed, on the death of a partner, the executor of the deceased partner will be entitled to:
(i) Balance in Capital Account.
(ii) His share in profit/Loss on revaluation of assets and reassessment of liabilitites which were as follows:
(a) Machinery is to be revalued at ₹ 45,000 and furniture at ₹ 7,000.
(b) A provision of 10% was to be created for Doubtfuld Debts.
(iii) The amount payable to Ajay was transferrred to his Executor’s Loan Account which was to be paid later.
Prepare Revaluation Account, Partner’s Capital Accounts, Ajay’s Executors Account and the Balance Sheet of Salil and Ravi who decided to continue the business keeping their capital balances in their new profit sharing ratio. Any surplus or deficit was to be transferred to Current Accounts of the partners.
Anurag Pathak Changed status to publish July 26, 2023
