Share

Sunny, Honey and Rupesh Were Partners in a Firm. on 31-3-2014 Their Balance Sheet Was as Follows : Prepare Honey'S Capital Account to Be Presented to His Executors. - CBSE (Arts) Class 12 - Accountancy

ConceptPreparation of Deceased Partner's Capital Account, Executor's Account

Question

Sunny, Honey and Rupesh were partners in a firm. On 31-3-2014 their Balance Sheet was as follows :

 Liabilities Amount Rs Assets Amount Rs Creditors General Reserve Capitals   Sunny    30,000   Honey    30,000   Rupesh  20,000 10,000 30,000       80,000 Plant and Machinery Furniture Investment Debtors Stock 40,000 15,000 20,000 20,000 25,000 1,20,000 1,20,000

Honey dies on 31-12-2014. The partnership deed provides that the representatives of the deceased partner shall be entitled to:

(1) Balance in the capital account of the deceased partner.
(2) Interest on capital @ 6% p.a. upto the date of his death.
(3) His share in the undistributed profits or losses as per the balance sheet.
(4) His share in the profit of the firm till the date of his death, calculated on the basis of the rate of net profit on sales of the previous year. The rate of net profit on the sale of the previous year was 20%. Sales of the firm during the year till 31-12-2014 was Rs 6,00,000.

Prepare Honey's Capital Account to be presented to his executors.

Solution

 Honey’s Capital Account Dr. Cr. Particular Rs Particular Rs To Executor A/c 81,350 By Balance b/d By Interest on Capital A/c By Profit and Loss Suspense A/c By General Reserve A/c 30,000 1,350 40,000 10,000 81,350 81,350

Working Notes :

WN1: Calculation of Interest on Honey's Capital

Interest on Capital = 30000 xx 6/100 x 9/12 = 1350

Honey's Share in Profits = 120000 xx 1/3 = 40000

WN3: Calculation of Honey's Share in General Reserve

Honey's Share in General Reserve = 30000 xx 1/3 = 10000

Is there an error in this question or solution?

APPEARS IN

Solution Sunny, Honey and Rupesh Were Partners in a Firm. on 31-3-2014 Their Balance Sheet Was as Follows : Prepare Honey'S Capital Account to Be Presented to His Executors. Concept: Preparation of Deceased Partner's Capital Account, Executor's Account.
S