Question

X, Y and Z were partners in a firm sharing profits in the ratio of 5 : 3 : 2. The firm closes its books on 31^st March every year. On 30.9.2016, Z died. The partnership deed provided that on the death of a partner his executors will be entitled to the following :    

(i) Balance in his capital account and interest @ 12% per annum. On 1.4.2016 balance in Z's Capital account was Rs 80,000.

(ii) His share in the profits of the firm in the year of his death, which will be calculated on the basis of rate of net profit on sales of the previous year which was 25%. The sales of the firm till 30.9.2016 were Rs 4,00,000.

(iii) His share on the goodwill of the firm. The goodwill of the firm on Z's death was valued at Rs 3,00,000.

The partnership deed also provided that the following deductions will be made from the amount payable to the executor of the deceased partner:

(i) His drawing in the year of his death. Z has withdrawn Rs 30,000 till 30.9.2016.

(ii) Interest on drawing @ 12% per annum which was calculated as Rs 2,000.

The accountant of the firm prepared Z's Capital Account to be presented to his executor but in a hurry did not complete it. Z's Capital Account as prepared by the firm's accountant is presented below : 

Dr.	Z’s Capital Account				Cr.
Date	Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
2016			2016
Sep. 30	……………	30,000	April 1	……………	80,000
Sep. 30	……………	2,000	Sep. 30	……………	4,800
Sep. 30	……………	……...	Sep. 30	……………	20,000
			Sep. 30	……………	……...
			Sep. 30	……………	……...
		1,64,800			1,64,800

 

You are required to complete Z's Capital Account. 

 

Answer 1

Dr.	Z’s Capital Account				Cr.
Date	Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
2016			2016
Sep. 30	Drawings A/c	30,000	April 1	Balance b/d	80,000
Sep. 30	Interest on Drawings A/c	2,000	Sep. 30	Interest on Capital	4,800
Sep. 30	Balance c/d	1,32,800	Sep. 30	Profit and Loss Suspense A/c	20,000
			Sep. 30	X's Capital A/c	37,500
			Sep. 30	Y's Capital A/c	22,500
		1,64,800			1,64,800