Question

The Balance Sheet of Hari, Jacob and James as at 31^st March, 2023, stood as follows:

Balance Sheet of Hari, Jacob and James As at 31st March, 2023
Liabilities	(₹)	(₹)	Assets	(₹)	(₹)
Capital Accounts			Fixed Assets		3,50,000
Hari	3,40,000		Debtors		2,50,000
Jacob	1,90,000		Bank		1,50,000
James	2,20,000	7,50,000
		7,50,000			7,50,000

Jacob died on 30^th June, 2023.

His drawings from 1^st April, 2023, up to the date of his death amounted to ₹ 1,00,000 According to the partnership deed, Jacob was:

1. To be charged with interest on drawings @ 4% per annum.
2. Entitled to his share of interim profits for which his capital account was credited with ₹ 1,10,000.
3. Entitled to his share in the non-purchased goodwill of the firm.

The firm's non-purchased goodwill on the date of Jacob's death had no value.
The final amount due to Jacob by the firm was transferred to his executor's loan account.
You are required to prepare the Interim Balance Sheet of the reconstituted firm as at 30^th June, 2023.

Answer 1

Balance Sheet as at 30th June 2023
Liabilities	Amt (₹)	Amt (₹)	Assets	Amt (₹)	Amt (₹)
Capital Accounts	₹		Fixed Assets		3,50,000
Hari	3,40,000	5,60,000	Debtors		2,50,000
James	2,20,000		Bank		1,50,000
Jacob's Executor's Loan A/c		1,99,500	Profit & Loss A/c (Dr.)		9,500
		7,59,500			7,59,500

Working Note: 1

Dr.	Jacob's Capital Account		Cr.
Particulars	Amt (₹)	Particulars	Amt (₹)
To Drawings A/c	1,00,000	By Balance b/d	1,90,000
To Interest on Drawings A/c `(1,00,000xx4/100xx1.5/12)`	500	By Profit & Loss Suspense A/c	1,10,000
To Jacob's Executor's Loan A/c	1,99,500
	3,00,000		3,00,000

Working Note: 2

Dr.	Profit and Loss Suspense Account		Cr.
Particulars	Amt (₹)	Particulars	Amt (₹)
To Jacob's Capital A/c (Interim profit given to Jacob)	1,10,000	By Drawings A/c	1,00,000
		By Interest on Drawings	500
		By Balance c/d	9,500
	1,10,000		1,10,000