Question

Trisha, Anisha and Rishika were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their Balance Sheet as at 31st March, 2025 was as follows:

Liabilities	₹	₹	Assets	₹
Capital A/cs:		6,00,000	Plant and Machinery	5,00,000
Trisha	3,00,000		Goodwill	20,000
Anisha	2,00,000		Stock	1,00,000
Rishika	1,00,000		Sundry Debtors	60,000
General Reserve		70,000	Cash at Bank	40,000
Sundry Creditors		50,000
		7,20,000		7,20,000

Trisha died on 31st July, 2025. According to the partnership deed, the executors of the deceased partner were entitled to:

1. Balance in Partner’s Capital Account.
2. Salary @ 15,000 per quarter.
3. Share of goodwill calculated on the basis of twice the average of past three years’ profits.
4. Share of profits from the closure of the last accounting year till the date of death on the basis of last year’s profit. Profit for 2022-23, 2023-24 and 2024-25 were ₹ 1,00,000, ₹ 2,00,000 and ₹ 1,50,000 respectively.
5. Trisha withdrew 20,000 on 1st May, 2025, for her personal use.

Showing your working clearly, prepare Trisha’s Capital Account to be rendered to her executors.

Answer 1

Dr.	Trisha’s Capital Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Goodwill A/c	8,000	By Balance b/d	3,00,000
To Drawings A/c	20,000	By General Reserve A/c	28,000
To Trisha’s Executors’ A/c (Balancing figure)	4,60,000	By Partner’s Salary A/c	20,000
		By Anisha’s Capital A/c	80,000
		By Rishika’s Capital A/c	40,000
		By Profit & Loss Suspense A/c	20,000
	4,88,000		4,88,000

Working Notes:

1. Share of General Reserve:

Share of General Reserve = `70,000 xx 2/5`

= ₹ 28,000

2. Writing Off Existing Goodwill (from Asset Side):

Trisha’s share to be written off = `20,000 xx 2/5`

= ₹ 8,000

3. Trisha’s Salary (till date of death):

Salary = ₹ 15,000 per quarter (3 months)

For 4 months = `15,000 xx 4/3`

= ₹ 20,000

4. Valuation of New Goodwill:

Average Profit = `(1,00,000 + 2,00,000 + 1,50,000)/3`

= `(4,50,000)/3`

= 1,50,000

Firm’s Goodwill = 2 × Average Profit

= 2 × 1,50,000

3,00,000

Trisha’s share of Goodwill = `3,00,000 xx 2/5`

= ₹ 1,20,000

5. Share of Profit till Death (On Last Year’s Profit):

Last Year’s Profit (2024–25) = ₹ 1,50,000

Trisha’s share of profit = `1,50,000 xx 4/12 xx 2/5`

= ₹ 20,000