Question

Kamal, Anwar, and Sam were equal partners in a firm. On 1st April, 2025, Sam’s capital stood at ₹ 1,05,000 in the books of the firm.

On 31st July, 2025, Sam died. As per the provisions of the Partnership Deed, Interest on Capital was allowed @ 10% per annum, and Interest on Drawings was charged @ 6% per annum.

Till his death, Sam had withdrawn ₹ 20,000. His interim profit amounted to ₹ 12,000, and the firm’s Goodwill was valued at ₹ 90,000.
You are required to prepare Sam’s Capital Account.

Answer 1

Dr.	Sam’s Capital Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Drawings A/c	20,000	By Balance b/d	1,05,000
To Interest on Drawings A/c	200	By Interest on Capital A/c	3,500
To Sam’s Executor’s A/c	1,30,300	By P & L Suspense A/c (Profit)	12,000
		By Kamal’s Capital A/c (Goodwill)	15,000
		By Anwar’s Capital A/c (Goodwill)	15,000
	1,50,500		1,50,500

Working Note:

Period of Service = From 1st April 2025 to 31st July 2025

= 4 months

 Interest on Capital = `1,05,000 xx 10/100 xx 4/12`

= 3,500

Since the date of drawings is not mentioned, we charge interest for the average period of the tenure `(4/2 = 2  "months")`.

 Interest on Capital = `20,000 xx 6/100 xx 2/12`

= 200

Share of Goodwill:

Firm’s Goodwill = ₹ 90,000

Sam’s Share = `90,000 xx 1/3`

= 30,000

This amount is contributed by Kamal and Anwar in their gaining ratio (1 : 1), i.e., ₹ 15,000 each.