Sudhir, Deepak and Naveen were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31st March, 2022 their Balance Sheet was as under:

Balance Sheet of Sudhir, Deepak and Naveen as at 31st March, 2022

Liabilities Amount
Assets Amount
Sundry Creditors 50,000 Land and Building 2,10,000
General Reserve 1,00,000 Machinery 1,90,000
Loan 1,20,000 Stock 30,000
Capitals: Investments 1,70,000
Sudhir      1,60,000 Advertisement Suspense A/c 1,20,000
Deepak      1,50,000
Naveen       1,40,000 4,50,000
7,20,000 7,20,000

Sudhir died on 30th June, 2022. The partnership deed provided for the following, on the death of a partner:

(i) Goodwill of the firm was to be valued at 2½ years purchase of average profits of the previous four years which were ₹1,80,000.
(ii) Sudhir’s share of profit or loss till the date of death was to be calculated on the basis of sales. Sales for the year ended 31st March, 2022 amounted to ₹4,00,000 and that from 1st April, 2022 to 30th June, 2022 amounted ₹1,50,000. The profit for the year ended 31st March, 2022 was ₹1,00,000.
(iii) Interest on capital was to be provided @ 7% p.a.

Prepare Sudhir’s capital account to be rendered to his executors.

Marks-4, CBSE:2022-23/Zone-1/Set-1/Q-22

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