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Accountancy · 2024 · 4 marks
Reconstitution of a Partnership Firm – Retirement/Death of a PartnerDeath of a Partner4 marksshort answer
CBSE 2024 · Region 5 · Set 3 · Q22
Madhav, Raghav and Purav were partners in a firm sharing profits and losses in the ratio of 3: 1: 1. Their Balance Sheet as at 31st March, 2023 was…
Madhav, Raghav and Purav were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$ : $\displaystyle 1$ : 1. Their Balance Sheet as at 31st March, $\displaystyle 2023$ was as follows :
Balance Sheet of Madhav, Raghav and Purav as at $\displaystyle 315$* March, $\displaystyle 2023$
Purav died on 30th September, 2023. According to Partnership deed, his legal representatives are entitled to the following : (i) Balanee in his Capital Account. (ii) Share of profit upto the date of death to be calculated on the basis of last year's profit. (iii) Share of goodwill calculated on the basis of three years purchase of average profits of last four years. (iv) Interest on capital @ $\displaystyle 1$'2.% p.a. Purav's share of profit was ₹ $\displaystyle 3,000$ and the average profit of last four years were ₹ $\displaystyle 50$,000. Purav's drawings upto the date of death were ₹ $\displaystyle 10$,000. Prepare Purav's Capital Account to be rendered to his legal representatives.
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | $\displaystyle 1,00,000$ | Bank | $\displaystyle 20,000$ |
| General Reserve | $\displaystyle 50,000$ | Stock | $\displaystyle 1,10,000$ |
| Capitals : | Investment | $\displaystyle 70,000$ | |
| Madhav $\displaystyle 60,000$ | Furniture | $\displaystyle 35,000$ | |
| Raghav $\displaystyle 1,00,000$ | Building | $\displaystyle 1,15,000$ | |
| Purav $\displaystyle 40,000$ | $\displaystyle 2,00,000$ | ||
| $\displaystyle 3,50,000$ | $\displaystyle 3,50,000$ |
Marking-scheme solution
Books of Madhav, Raghav and Purav
Dr. Purav’s Capital A/c Cr.
Particulars Amount Particulars Amount
₹ ₹
To Drawings A/c $\displaystyle 10,000$ By Balance b/d $\displaystyle 40,000$
To Purav’s Legal By General Reserve A/c $\displaystyle 10,000$
Representatives/ $\displaystyle 75,400$
Executors A/c By Madhav’s Capital A/c $\displaystyle 22,500$
By Raghav’s Capital A/c $\displaystyle 7,500$
$\displaystyle 2,400$
By Interest on Capital A/c
$\displaystyle 3,000$
By P& L Suspense A/c
$\displaystyle 85,400$ $\displaystyle 85,400$
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