L, M and N were partners sharing profits and losses in the ratio of 5 : 3 : 2. Their Balance Sheet as at 1.4.2022 was as under:

L, M and N were partners sharing profits and losses in the ratio of 5 : 3 : 2. Their Balance Sheet as at 1.4.2022 was as under:

Liabilities	₹	Assets	₹
Sundry Creditors	20,000	Cash at Bank	28,000
Reserves	9,000	Debtors	22,000
Capitals: L M N	50,000 30,000 20,000	Stock	20,000
		Machinery	47,000
		Investments	12,000
	1,29,000		1,29,000

N died on 5th November, 2022 and according to the partnership deed his executors were entitled to be paid as under: (a) The capital to his credit at the time of his death and interest thereon @ 8% per annum. (b) His share of Reserves. (c) His share of profits for the intervening period will be based on the sales during that period, which were calculated as ₹ 2,40,000. The rate of profit during past 4 years had been 15% on sales. (d) Goodwill according to his share of profit to be calculated by taking thrice the amount of the average profit of the last four years less 25%. The profits of the previous years were:

2019	₹ 10,500
2020	₹ 12,000
2021	₹ 12,500
2022	₹ 13,000

The investments were sold at par and his executors were paid out. Pass the necessary journal entries and write the account of the executors of N. [Ans. Amount paid to N’s executors ₹ 35,360.] Hint: Interest on Capital : 20,000 x 8/100 x 219/365 = ₹ 960.