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The following is the Balance Sheet of A,B and C as on 31st March, 2014: 'C' died on 30th June, 2014 Under the terms of Partnership Deed, the executors of the deceased partner were entitled to: (i) Amount standing to the credit of Partner's Capital Account. (ii) Interest on Capital @6% per annum. (iii) Share of goodwill on the basis of twice the average of past three years profits. (iv) Share of profit from the closing of last financial year to the date of death on the basis of last year's profit. The profits of the last three years were as follows: The fiem closes its books on 31st March every year. The partners shared profits in the ratio of their capitals. Prepare C's Capital Account to be presented to her executors. |
Answer» SOLUTION : WORKING Notes: 1. Interest on Capital `=Rs7,500xx6/100xx3/12=Rs113.` 2. VALUE of Goodwill `=(Rs9,000+Rs10,500+Rs 12,000)/(3)xx2=Rs21,000.` C's SHARE in Goodwill `=Rs21,000xx1//4=Rs5,250,` which is contributd by A and B in their gaining ratio, i.e., `2:1` Thus A's contribution `=Rs5,250xx2//3=Rs3,500,` B's contribution `=Rs5,250xx1//3=Rs1,750.` 3. C's Share of Profit `=Rs12,000xx3//12xx1//4=Rs750.` |
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