Chapter 5 – Reconstitution of Partnership, (Death of Partner).

Chapter 5, Reconstitution of Partnership, (Death of Partner), [Latest edition], Balbharati, Solutions, for, Book keeping, and, Accountancy, 12th, Standard, HSC, Maharashtra, State, Board,

question number 3

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 31^st March 2018.

Keshav died on 31July 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

Working note

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