Shirish, Harit and Asha were partners in a firm sharing profits in the ratio of 5 : 4 : 1. Shirish died on 30th June, 2018. On this date their Balance Sheet was as follows :
Balance Sheet of Shirish, Harit and Asha as at 31st March, 2018
Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
Capital: |
| Plant and Machinery | 5,60,000 |
Shirish 1,00,000 |
| Stock | 90,000 |
Harit 2,00,000 |
| Debtors | 10,000 |
Asha 3,00,000 | 6,00,000 | Cash | 40,000 |
Profit for the year 2017-18 | 80,000 |
|
|
Bills Payable | 20,000 |
|
|
| 7,00,000 |
| 7,00,000 |
According to the partnership deed, in addition to deceased partner’s capital, his executor is entitled to:
(i) Share in profits in the year of death on the basis of average of last two years’ profit. Profit for the year 2016 – 17 was Rs. 60,000.
(ii) Goodwill of the firm was to be valued at 2 years’ purchase of average of last two years’ profits.
Prepare Shirish’s Capital Account to be presented to his executor.
Marks-4, CBSE:2018-19/Main/03/Q-12