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

02 Jan 2021 6:13 pm

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

Practical Problems | Q 2 | Page 202

Rahul, Rohit, and Ramesh are in a business sharing profits and losses in the ratio of 3:2:1 respectively. Their balance sheet as on 31st March 2017 was as follows.

Balance Sheet as on 31st March 2017.

question number 2

On 1st October 2017, Ramesh died and the Partnership deed provided that

1. R.D.D. was maintained at 5% on Debtors

2. Plant and Machinery and Investment were valued at ₹ 80,000 and ₹ 4,10,000 respectively.

3. Of the creditors, an item of ₹ 6000 was no longer a liability and hence was properly adjusted.

4. Profit for 2017-18 was estimated at ₹ 120,000 and Ramesh share in it up to the date of his death was given to him.

5. Goodwill of the Firm was valued at two times the average profit of the last five years. Which were 

2012-13₹ 1,80,000
2013-14₹ 2,00,000
2014-15₹ 2,50,000
2015-16₹ 1,50,000
2016-17₹ 1,20,000

Ramesh share in it was to be given to him

6. Salary 5,000 p.m. was payable to him

7. Interest on capital at 5% i.e. was payable and on Drawings ₹ 2000 were charged.

8. Drawings made by Ramesh up to September 2017 were ₹ 5,000 p.m.

Prepare

Ramesh’s Capital A/c showing the amount payable to his executors

Give Working of Profit and Goodwill

Ramesh Capital Balance ₹ 3,41,000

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