Question

Balance Sheet of Somesh, Rahul and Kamlesh, who were sharing profits in the ratio of 3 : 3 : 4 respectively as on 31st March, 2025 was as follows:

BALANCE SHEET OF SOMESH, RAHUL AND KAMLESH as at 31st March, 2025
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Sundry Creditors		44,000	Cash	32,000
General Reserve		10,000	Stock	88,000
Capitals:		3,00,000	Investments	94,000
Somesh	1,20,000		Land & Building	1,20,000
Rahul	1,00,000		Loan to Somesh	20,000
Kamlesh	80,000
		3,54,000		3,54,000

Somesh died on 31st July, 2025. The Partnership deed provided for the following on the death of a partner:

1. Goodwill of the firm be valued at two years’ purchase of average profit for the last three years which was 80,000.
2. Somesh’s share of profit till the date of his death was to be calculated on the basis of sales. Sales for the year ended 31st March, 2025 was ₹ 8,00,000 and that from 1st April to 31st July, 2025 ₹ 3,00,000. Profit for the year ended 31st March, 2025 was ₹ 2,00,000.
3. Interest on capital is to be allowed, and interest on Drawings is to be charged @ 6% p.a, Drawings for the period were 36,000.

Prepare Somesh’s Capital Account to be rendered to his executor.

Answer 1

Dr.	Sindhu’s Capital A/c		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Loan to Somesh A/c	20,000	By Balance b/d	1,20,000
To Drawings A/c	36,000	By Rahul’s Capital A/c	20,571
To Interest on Drawings A/c	360	By Kamlesh’s Capital A/c	27,429
To Somesh’s Executor’s A/c (Balancing figure)	1,39,540	By P & L Suspense A/c	22,500
		By General Reserve A/c	3,000
		By Interest on Capital A/c	2,400
	1,95,900		1,95,900

Working Notes:

1. Old ratio of Sindu, Rahul & Kamlesh = 3 : 3 : 4

Sindhu died. 

New ratio of Rahul & Kamlesh = 3 : 4

Gaining ratio = New Ratio (i.e., 3 : 4)

2. Goodwill = Average Profit × No. of year’s Purchase

= 80,000 × 2

= ₹ 1,60,000

Somesh’s share of Goodwill = `1,60,000 xx 3/10`

= ₹ 48,000

3. % of Profit on the basis of sales = `(2,00,000)/(8,00,000)xx100`

= 25%

4 months (i.e., from 1st April 2020 to 31st july 2020)

Somesh’s share of profit = `3,00,000 xx 25/100 xx 3/10`

= ₹ 22,500

4. Interest on capital = `1,20,000 xx 6/100 xx 4/12`

= ₹ 2,400

5. Interest on Drawings = `36,000 xx 6/100 xx 2/12`

= ₹ 360