Sandeep, Mandeep and Amandeep were partners in a firm sharing profits in the ratio of 2 : 2 : 1. The firm closes its books on 31st March every year. On 30th September, 2016 Mandeep died. The partnership deed provided that on the death of a partner his executors will be entitled to the following:
- Balance in his capital account and interest @ 12% p.a. on capital. On 1-4-2016 the balance in Mandeep’s Capital Account was Rs. 1,00,000.
- His share in the profits of the firm in the year of his death which will be calculated on the basis of rate of net profit on sales of the previous year which was 25%. The sales of the firm till 30th September, 2016 were Rs. 9,00,000.
- His share in the goodwill of the firm. The goodwill of the firm on Mandeep’s death was valued at Rs. 1,50,000.
The partnership deed also provided that the following deductions will be made from the amount payable to the executor of the deceased partner :
- His drawings in the year of his death. Mandeep’s drawings till 30th September, 2016 were Rs. 4,000.
- Interest on drawings @ 6% per annum which was calculated as Rs. 120.
The accountant of the firm prepared Mandeep’s Capital Account to be presented to the executor of Mandeep but in a hurry he left it incomplete. Madeep’s capital Account prepared by Accountant of the firm is shown below:
Mandeep’s Capital Account
Dr. Cr.
Date | Particulars | Amount Rs. | Date | Particulars | Amount Rs. |
2016 |
|
| 2016 |
|
|
Sep. 30 | …………… | 4,000 | April 1 | …………… | 1,00,000 |
” “ | …………… | – | Sep. 30 | …………… | 6,000 |
” “ | …………… | – | ” “ | …………… | 90,000 |
|
|
| ” “ | …………… | 40,000 |
|
|
| ” “ | …………… | 20,000 |
|
| 2,56,000 |
|
| 2,56,000 |
You are required to complete Mandeep’s Capital Account.
Marks-4, CBSE:2016-17/Main-DL/Q-12