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Accountancy · 2023 · 4 marks
Reconstitution of a Partnership Firm – Retirement/Death of a PartnerDeath of a Partner4 marksshort answer
CBSE 2023 · Region 1 · Set 2 · Q22
Sudhir, Deepak and Naveen were partners in a firm sharing profits and losses in the ratio of 2: 2: 1. On 31st March, 2022 their Balance Sheet was as…
Sudhir, Deepak and Naveen were partners in a firm sharing profits and losses in the ratio of $\displaystyle 2$ : $\displaystyle 2$ : 1. On 31st March, $\displaystyle 2022$ their Balance Sheet was as under :
Balance Sheet of Sudhir, Deepak and Naveen as at 31st March, $\displaystyle 2022$
Sudhir died on 30th June, 2022. The partnership deed provided for the following, on the death of a partner : $\displaystyle 1$ years purchase of (i) Goodwill of the firm was to be valued at $\displaystyle 2$ $\displaystyle 2$ average profits of the previous four years which were ₹ $\displaystyle 1,80$,000. (ii) Sudhir's share of profit or loss till the date of death was to be calculated on the basis of sales. Sales for the year ended 31st March, $\displaystyle 2022$ amounted to ₹ $\displaystyle 4,00,000$ and that from 1st April, $\displaystyle 2022$ to 30th June, $\displaystyle 2022$ amounted ₹ $\displaystyle 1,50$,000. The profit for the year ended 31st March, $\displaystyle 2022$ was ₹ $\displaystyle 1,00$,000. (iii) Interest on capital was to be provided @ $\displaystyle 7$% p.a. Prepare Sudhir's capital account to be rendered to his executors.
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | $\displaystyle 50,000$ | Land and Building | $\displaystyle 2,10,000$ |
| General Reserve | $\displaystyle 1,00,000$ | Machinery | $\displaystyle 1,90,000$ |
| Loan | $\displaystyle 1,20,000$ | Stock | $\displaystyle 30,000$ |
| Capitals : | Investments | $\displaystyle 1,70,000$ | |
| Sudhir $\displaystyle 1,60,000$ | Advertisement Suspense A/c | $\displaystyle 1,20,000$ | |
| Deepak $\displaystyle 1,50,000$ | |||
| Naveen $\displaystyle 1,40,000$ | $\displaystyle 4,50,000$ | ||
| $\displaystyle 7,20,000$ | $\displaystyle 7,20,000$ |
Marking-scheme solution
Dr. Sudhir’s Capital A/c Cr.
Particulars (₹) Particulars (₹)
To Advertisement suspense A/c $\displaystyle 48,000$ By Balance b/d $\displaystyle 1,60,000$
To Sudhir’s Executors A/c $\displaystyle 3,49,800$ By General Reserve A/c $\displaystyle 40,000$
By Deepak’s Capital A/c $\displaystyle 1,20,000$
By Naveen’s Capital A/c $\displaystyle 60,000$
By Profit and Loss Suspense $\displaystyle 15,000$
A/c
By Interest on Capital A/c $\displaystyle 2,800$
$\displaystyle 3,97,800$ $\displaystyle 3,97,800$
Workings:
Sudhir’s share in Goodwill
= $\displaystyle 2$/$\displaystyle 5$ x $\displaystyle 1,80,000$ x $\displaystyle 5$/$\displaystyle 2$
= ₹$\displaystyle 1,80,000$
Sudhir’s share in profits till death
$\displaystyle 1,00,000$ x $\displaystyle 1,50,000$ x $\displaystyle 2$
$\displaystyle 4,00,000$ $\displaystyle 5$
= ₹$\displaystyle 15,000$
Interest on capital of Sudhir
$\displaystyle 1,60,000$ x $\displaystyle 7$/$\displaystyle 100$ x $\displaystyle 3$/$\displaystyle 12$
= ₹$\displaystyle 2,800$
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