A, B and C were partners in a firm sharing profits in the ratio of 5 : 3 : 2. The Balance Sheet as at 31-3-2023 was as follows:
A, B and C were partners in a firm sharing profits in the ratio of 5 : 3 : 2. The Balance Sheet as at 31-3-2023 was as follows:
A died on 30-9-2023 and B and C decided to share future profits in the ratio of 7 : 3. Under the partnership agreement the executors of a deceased partner were entitled to:
(a) Amount standing to the credit of partner’s capital account.
(b) Interest on capital at 12% per annum.
(c) Share of goodwill on the basis of four years purchase of last three years average profit.
(d) Share of profit from the closing of the last financial year to the date of death on the basis of last year’s profit. Profits for the year 2021, 2022 and 2023 were ₹ 8,000; ₹ 12,000 and ₹ 7,000 respectively.
Prepare A’s Capital Account to be rendered to his executors.
[Ans. Amount due to A’s Excecutor’s ₹ 44,190.]
| Liabilities | ₹ | Assets | ₹ |
| Creditors | 12,000 | Building | 20,000 |
| Reserves | 6,000 | Plant and Machinery | 16,000 |
| A’s Capital | 24,000 | Stock | 5,100 |
| B’s Capital | 12,000 | Debtors | 6,000 |
| C’s Capital | 8,000 | Cash at Bank | 6,900 |
| Advertisement Suspense | 8,000 | ||
| 62,000 | 62,000 |
Anurag Pathak Answered question 2 days ago
