Ram, Madhav, and Keshav are partners sharing Profit and Losses in the ratio 5:3:2 respectively. Their Balance Sheet as on 31st March 2018 was as follows.

Book Keeping, Accountancy, 12th Std, HSC Accounts, Death of Partner, 

Chapter 5, Reconstitution of Partnership (Death of Partner)

Book Keeping, Accountancy, 12th Std, HSC Accounts, Death of Partner,   Chapter 5, Reconstitution of Partnership (Death of Partner)


Practical Problems | Q 3 | Page 203


Ram, Madhav, and Keshav are partners sharing Profit and Losses in the ratio 5:3:2 respectively. Their Balance Sheet as on 31st March 2018 was as follows.

Balance Sheet as on 31st March 2018

Liabilities

Amount ₹

Assets

Amount ₹

General Reserve

25,000

Goodwill

50,000

Creditors

1,00,000

Loose Tools

50,000

Unpaid Rent

25,000

Debtor

1,50,000

Capital Accounts

-

Live Stock

1,00,000

Ram

100000

Cash

25,000

Madhav

75000



Keshav

50000




3,75,000


3,75,000

Keshav died on 31 July 2018 and the following Adjustment were agreed by as per partnership deed.


1. Creditors have increased by 10,000

2. Goodwill is to be calculated at 2 years purchase of average profits of 5 years.

3. The Profits of the preceding 5 years was

2013-14

₹ 90,000

2014-15

₹ 1,00,000

2015-16

₹ 60,000

2016-17

₹ 50,000

2017-18

₹ 50,000 (Loss)

Keshav's share in it was to be given to him.

4. Loose Tools and livestock were valued at ₹ 80,000 and ₹ 1,20,000 respectively

5. R.D.D. was maintained at ₹ 10,000

6. Commission's ₹ 2000 p.m. was payable to Keshav Profit for 2018 -19 was estimated at ₹ 45000 and Keshav's share in it up to the date of his death was given to him.

Prepare


Revaluation A/c, Keshav’s capital A/c showing the amount payable to his executors.

Solution


In the books of the Partnership Firm Revaluation Account


Particulars

Amount (₹ )

Particulars

Amount (₹)

To R.D.D. A/c

10,000

By Loose Tools A/c

30,000

To Creditors A/c

10,000

By Live Stock A/c

20,000

To Partners’ capital A/c – Profit




Ram

15000

30,000

Madhav

9000

Keshav

6000


50,000


50,000

 

Keshav’s Capital Account


Particulars

Amount (₹)

Particulars

Amount (₹)

To Balance c/d

92,000

By Balance b/d

50,000



By General reserve A/c

5,000

By Commission A/c (₹ 2,000 × 4 months)

8,000

By Goodwill A/c

20,000

By revaluation A/c – Profit

6,000

By Profit and Loss Suspense A/c

3,000


92,000


92,000



Ram, Madhav, and Keshav are partners sharing Profit and Losses in the ratio 5:3:2 respectively. Their Balance Sheet as on 31st March 2018 was as follows.

Ram, Madhav, and Keshav are partners sharing Profit and Losses in the ratio 5:3:2 respectively. Their Balance Sheet as on 31st March 2018 was as follows.

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