A, B and C were partners sharing P&L in the ratio 5:3:2. A died on 30th June, 2019. Entry for treatment of goodwill after his death was passed as follows:
| Particulars | Debit ₹ | Credit ₹ | |
|---|---|---|---|
| (A) | B’s Capital A/c……………………….Dr C’s Capital A/c……………………....Dr To A’s Capital A/c (Entry for goodwill treatment passed at the time of death of partner) |
1,80,000 1,20,000 |
3,00,000 |
A’s profit till date of death was estimated as ₹1,20,000, based on the average profits of past three years. Final dues payable to A’s executors on the date of death was calculated as ₹8,40,000 out of which ₹2,40,000 was paid immediately by giving him Furniture valued for the same and balance was to be paid in three equal annual instalments starting from 30 June, 2020, together with interest rate as specified in Section 37 of Indian Partnership Act, 1932. Pass necessary entry for profit share to be credited to A’s Capital and also prepare A’s executors account till final settlement.
Marks-6, CBSE:2022-23/Sample/Q-25