CBSE 2024 · Region 1 · Set 2 · Q23

Gagan, Harsh and Ishan were partners in a firm sharing profits and losses in the ratio of $\displaystyle 2$ : $\displaystyle 2$ : 1. Their Balance Sheet as at 31st March, $\displaystyle 2023$, was as follows : Balance Sheet of Gagan, Harsh and Ishan as at 31st March, $\displaystyle 2023$ Amount Amount Liabilities Assets < < Bills Payable $\displaystyle 20,000$ Bank $\displaystyle 10,000$ General Reserve $\displaystyle 15,000$ Stock $\displaystyle 20,000$ Capitals : Debtors $\displaystyle 25,000$ Gagan $\displaystyle 25,000$ Fixed Assets $\displaystyle 30,000$ Harsh $\displaystyle 15,000$ Ishan $\displaystyle 10,000$ $\displaystyle 50,000$ $\displaystyle 85,000$ $\displaystyle 85,000$ Gagan died on 30th June, 2023. According to the partnership deed, Gagan's legs l representatives were entitled to the following : (i) Balance in his Capital Account. (ii) Interest on capital @ $\displaystyle 12$% p.a. (iii) His share of goodwill. Goodwill of the firm was valued on the basis of twice the average of the past four years' profits. (iv) His share in the profits up to the date of death on the basis of the average profit for the preceding three years. Profits for the previous four years were : < $\displaystyle 2019$ $\displaystyle 20$ $\displaystyle 12,000$ $\displaystyle 2020$ $\displaystyle 21$ $\displaystyle (15,000)$ $\displaystyle 2021$ $\displaystyle 22$ $\displaystyle 45,000$ $\displaystyle 2022$ $\displaystyle 23$ $$18,000$ Prepare Gavan's Capital Account to be rendered to his legal representatives.