Following is the Balance Sheet of Prateek, Rockey and Kushal as on March 31, 2017-Solution
Q.9. Following is the Balance Sheet of Prateek, Rockey and Kushal as on March 31, 2017.
Books of
Prateek, Rockey and Kushal
Balance Sheet as on March 31, 2017
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Sundry Creditors | 16,000 | Bills Receivable | 16,000 |
| General Reserve | 16,000 | Furniture | 22,600 |
| Capital Accounts: | Stock | 20,400 | |
| Prateek 30,000 | Sundry Debtors | 22,000 | |
| Rockey 20,000 | Cash at Bank | 18,000 | |
| Kushal 20,000 | 70,000 | Cash in Hand | 3,000 |
| 1,02,000 | 1,02,000 |
Rockey died on June 30, 2017. Under the terms of the partnership deed, the executors of a deceased partner were entitled to:
a) Amount standing to the credit of the Partner’s Capital account.
b) Interest on capital at 5% per annum.
c) Share of goodwill on the basis of twice the average of the past three years’ profit and
d) Share of profit from the closing date of the last financial year to the date of death on the basis of last year’s profit.
Profits for the year ending on March 31, 2015, March 31, 2016 and March 31, 2017 were Rs 12,000, Rs 16,000 and Rs 14,000 respectively. Profits were shared in the ratio of capitals.Pass the necessary journal entries and draw up Rockey’s capital account to be rendered to his executor.
Books of Prateek Rockey
Journal
| Date | Particulars | L.F. | Amount (Dr.) | Amount (Cr.) | |
| Profit and loss Suspense A/c | Dr. | 1,000 | |||
| Reserve A/c | Dr. | 4,571 | |||
| Interest on capital A/c | Dr. | 250 | |||
| To Rockey’s Capital A/c | 5,821 | ||||
| ( Being share of profit,Share of General reserve and Interest on Capital’s amount credited to Rockey’s Capital A/c) | |||||
| Prateek’s Capital A/c | Dr. | 4,800 | |||
| Kushal’s Capital A/c | Dr. | 3,200 | |||
| To Rockey’s Capital A/c | 8,000 | ||||
| ( Rockey’s Share of Goodwill Adjusted to Prateek and Kushal’s Capital A/c in their gaing ratio) | |||||
| Rockey’s Capital A/c | Dr. | 33,821 | |||
| To Rockey’s executor’s A/c | 33,821 | ||||
| (Balance of Rockey’s Capital Account transferred to his Executor’s Account) | |||||
Rockey’s Capital A/c
| Date | Particulars | Amount (Rs.) | Date | Particulars | Amount (Rs.) | |
| 2017 April 1 | Rockey’s Executor A/c | 33,821 | 2017 April 1 | By Balance b/d | 20,000 | |
| By Interest on Capital | 250 | |||||
| By Profit and Loss (Suspense) A/c | 1,000 | |||||
| By General Reserve | 4,571 | |||||
| By Prateek’s Capital | 4,800 | |||||
| By Kushal’s Capital | 3,200 | |||||
| 33,821 | 33,821 | |||||
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