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On 31st March, 2022, the Balance Sheet of Ankur, Raj and Rishab who were partners in a firm was as under:

Liabilities Assets

Sundry Creditors

Reserve Fund

Capital A/cs:

Ankur

Raj

Rishab

25,000

20,000

15,000

10,000

10,000

Building

Investments

Debtors

Bills Receivable

Stock

Cash

26,000

15,000

15,000

6,000

12,000

6,000

  80,000   80,000

The Partnership Deed provides that the profits be shared in the ratio of 2 : 1 : 1 and in the event of death of a partner, his executors will be entitled to:

(i) The Capital to his credit till the date of last Balance Sheet.

(ii) His proportionate share of Reserve till the date of last Balance Sheet.

(iii) His share of profit till the date of death based on the average profit of the last three completed years, plus 10%.

(iv) By way of Goodwill, his share of the total profits for the three preceding years.

(v) Net Profits for the last three years ended 31st March, were:

2020 – ₹ 16,000; 2021 – ₹ 16,000; 2022 – ₹ 15,400.

Rishab died on 1st July, 2022. He had withdrawn ₹ 5,000 up to the date of his death. The investments were sold at par and Rishab’s Executors were paid.

Prepare Partner’s Capital Accounts, Rishab’s Executors Account and Balance Sheet of the Surviving partners Ankur and Raj.

Anurag Pathak Changed status to publish February 15, 2024
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