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.

SOLUTION

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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