Question

Pia, Sia and Jiya are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Pia died on 31^st October, 2021. Her capital as on 1^st April, 2021, was ₹ 24,000 and her share of profit for the year 2021-22 till the date of her death, was ascertained as ₹ 2,000.

Additional Information:

1. Office Equipment of the firm, the book value of which was ₹10,000 on 1st April, 2021, was revalued on the date of Pia's death at ₹13,600.
2. The amount of ₹ 35,000 due to Pia's executor in full settlement of the claim was transferred to her executor's loan account.

You are required to prepare Pia's capital account to be rendered to her executor.

Answer 1

	Pia : Sia : Jiya
Profit sharing Ratio	3 : 2 : 1

Profit on revaluation = 13,600 - 10,000 = ₹ 3,600

Dr.	Pia's Capital A/c				Cr.
Date	Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2021			2021
31st October	To Pia's Executors A/c	35,000	1st April	By Balance b/d	24,000
			31st October	By Profit and Loss Suspense A/c (Profit)	2,000
			31st October	By Revaluation A/c `(3,600 xx 3/6)`	1,800
			31st October	By Sia's Capital A/c (Goodwill)(balancing fig.)	4,800
			31st October	By Jiya's Capital A/c	2,400
		35,000			35,000

Working Note:

Share of Pia's Goodwill = 35,000 - (24,000 + 2,000 + 1,800) = ₹ 7,200

Goodwill Payable to Pia's shared by Sia and Jiya in 2 : 1

Sia's share = `7,200 xx 2/3 = "₹" 4,800`

Jiya's share = `7,200 xx 1/3 = "₹" 2,400`