Question:
Gopal, Heera and Iqbal were partners in a firm sharing profits and losses equally. Iqbal died on 1st April, 2022. Final dues payable to Iqbal\u2019s executor as on the date of death amounted to \u20b9 4,00,000. Starting from 31st March, 2023, the executor was to be paid in two equal annual instalments of \u20b9 2,00,000 each, with interest @ 10% per annum. Accounts were closed on 31st March every year.
Prepare Iqbal\u2019s executor\u2019s account till the final payment is made.
Gopal, Heera and Iqbal were partners in a firm sharing profits and losses equally. Iqbal died on 1st April, 2022. Final dues payable to Iqbal\u2019s executor as on the date of death amounted to \u20b9 4,00,000. Starting from 31st March, 2023, the executor was to be paid in two equal annual instalments of \u20b9 2,00,000 each, with interest @ 10% per annum. Accounts were closed on 31st March every year.
Prepare Iqbal\u2019s executor\u2019s account till the final payment is made.
Show Hint
When paying executors in instalments, calculate yearly interest on the opening balance and add it before recording the payment.
Updated On: Jan 7, 2026
Hide Solution
Verified By Collegedunia
Solution and Explanation
Step 1: Basic Data
Total amount due on 1st April, 2022 = ₹4,00,000
To be paid in 2 equal annual instalments of ₹2,00,000 each
Interest @ 10% per annum to be paid on outstanding balance
Step 2: Interest and Payment Schedule
31st March, 2023:
Interest = 10% of ₹4,00,000 = ₹40,000
Total due = ₹4,00,000 + ₹40,000 = ₹4,40,000
Payment made = ₹2,00,000 (1st instalment)
Balance carried forward = ₹2,40,000
31st March, 2024:
Interest = 10% of ₹2,40,000 = ₹24,000
Total due = ₹2,40,000 + ₹24,000 = ₹2,64,000
Payment made = ₹2,00,000 (2nd instalment)
Balance carried forward = ₹64,000
31st March, 2025:
Interest = 10% of ₹64,000 = ₹6,400
Final Payment = ₹64,000 + ₹6,400 = ₹70,400
Iqbal's Executor Account
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) |
|---|---|---|---|---|---|
| 2022 Apr 1 | To Balance b/d | 4,00,000 | 2023 Mar 31 | By Bank A/c (1st instalment) | 2,00,000 |
| 2023 Mar 31 | To Interest A/c | 40,000 | 2023 Mar 31 | By Balance c/d | 2,40,000 |
| 2023 Apr 1 | To Balance b/d | 2,40,000 | 2024 Mar 31 | By Bank A/c (2nd instalment) | 2,00,000 |
| 2024 Mar 31 | To Interest A/c | 24,000 | 2024 Mar 31 | By Balance c/d | 64,000 |
| 2024 Apr 1 | To Balance b/d | 64,000 | 2025 Mar 31 | By Bank A/c (final payment) | 70,400 |
| 2025 Mar 31 | To Interest A/c | 6,400 | |||
| Total | 7,74,400 | Total | 7,74,400 | ||
Final Answer: Iqbal's executor received a total of ₹7,74,400 including ₹74,400 as interest over 3 years.
Was this answer helpful?
1
3
Top Questions on Retirement and Death of a Partner
- Piyush, Aadi and Sudha were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 3. Aadi died on 1st October, 2024. As per the partnership deed, Aadi’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, 2024 amounted to ₹ 6,00,000 and that from 1st April to 30th September, 2024 amounted to ₹ 2,00,000. The profit for the year ending 31st March, 2024 was calculated as ₹ 1,50,000. The books of accounts are closed on 31st March every year. Calculate Aadi’s share of profits in the firm and pass necessary journal entries for the same. Show your working clearly.}
- CBSE CLASS XII - 2025
- Accountancy
- Retirement and Death of a Partner
- Zaina, Yash and Kiran were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Zaina died on 1st July, 2024. As per the partnership deed, Zaina’s share of profit or loss till the date of her death was to be calculated on the basis of sales. Sales for the year ended 31st March, 2024 amounted to ₹ 4,00,000 and that from 1st April to 30th June, 2024 was ₹ 1,50,000. The profit for the year ending 31st March, 2024 was ₹ 1,00,000. Calculate Zaina’s share of profit in the firm till the date of her death and pass necessary journal entry for the same.
- CBSE CLASS XII - 2025
- Accountancy
- Retirement and Death of a Partner
- A, B and C are partners sharing profits in the ratio 3:2:1. C retires and his share is taken equally by A and B. The goodwill of the firm is valued at Rs 60,000. Pass journal entry for goodwill adjustment without raising Goodwill A/c.
- CBSE CLASS XII - 2025
- CBSE Compartment XII - 2025
- Accountancy
- Retirement and Death of a Partner
- Vishesh, Manik and Amit were partners in the ratio 5 : 4 : 1. Amit retired on 31st March, 2024. Vishesh and Manik decided to share Amit’s share in the ratio 2 : 3. What will be the new profit sharing ratio between Vishesh and Manik?
- CBSE CLASS XII - 2025
- Accountancy
- Retirement and Death of a Partner
- Ashmit, Veena and Rohan were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Veena retired on 31st March, 2024. The capital accounts of Ashmit, Veena and Rohan showed a credit balance of ₹ 2,00,000, ₹ 1,80,000 and ₹ 1,20,000 respectively after making all adjustments relating to revaluation, goodwill, reserves etc. Veena was paid in cash brought in by Ashmit and Rohan in such a way that their capitals were in proportion to their new profit sharing ratio. The new capitals of Ashmit and Rohan will be :
- CBSE CLASS XII - 2025
- Accountancy
- Retirement and Death of a Partner
View More Questions
Questions Asked in CBSE CLASS XII exam
- The resistance of a wire of length \( L \) and radius \( r \) is \( R \). Which one of the following would provide a wire of the same material with resistance \( \frac{R}{2} \)?
- CBSE CLASS XII - 2025
- Current electricity
- If \( \int \frac{1}{2x^2} \, dx = k \cdot 2x + C \), then \( k \) is equal to:
- CBSE CLASS XII - 2025
- Integration
- If \( \int_0^1 \frac{e^x}{1+x} \, dx = \alpha \), then \( \int_0^1 \frac{e^x}{(1+x)^2} \, dx \) is equal to:
- CBSE CLASS XII - 2025
- Integration
- A vector \( \mathbf{a} \) makes equal angles with all the three axes. If the magnitude of the vector is \( 5\sqrt{3} \) units, then find \( \mathbf{a} \).
Simar, Tanvi, and Umara were partners in a firm sharing profits and losses in the ratio of 5 : 6 : 9. On 31st March, 2024, their Balance Sheet was as follows:
Balance Sheet of Simar, Tanvi, and Umara as at 31st March, 2024
Liabilities Amount (₹) Assets Amount (₹) Capitals: Fixed Assets 25,00,000 Simar 13,00,000 Stock 10,00,000 Tanvi 12,00,000 Debtors 8,00,000 Umara 14,00,000 Cash 7,00,000 General Reserve 7,00,000 Profit and Loss A/c 2,00,000 Trade Payables 6,00,000 Total 52,00,000 Total 52,00,000 Umara died on 30th June, 2024. The partnership deed provided for the following on the death of a partner:
- Goodwill of the firm be valued at 3 years purchase of average profits for the last 5 years. The profits/losses for the previous four years were:
- 2022-23: ₹ 3,10,000 (loss)
- 2021-22: ₹ 3,00,000 (profit)
- 2020-21: ₹ 4,00,000 (profit)
- 2019-20: ₹ 2,50,000 (profit)
- Umara’s share of profit or loss till the date of her death was to be calculated on the basis of profit or loss for the year ended 31st March 2024.
- Calculate Goodwill of the firm.
- Pass the necessary journal entry for the treatment of goodwill on Umara’s death.
- Calculate Umara’s share in the profit or loss of the firm till the date of her death.
- Pass the necessary journal entry to record Umara’s share of profit or loss till the date of her death.
- CBSE CLASS XII - 2025
- Profit and Loss Account
- Goodwill of the firm be valued at 3 years purchase of average profits for the last 5 years. The profits/losses for the previous four years were:
View More Questions