Question

Ram, Ravi, and Rohan were partners sharing profits in the ratio of 2:3:1. On 31\textsuperscript{st March, 2023, their Balance Sheet was as follows:} \[ \begin{array}{|c|c|c|} Liabilities & Amount (\rupee) & Assets & Amount (\rupee)
Creditors & 3,62,000 & Cash & 14,000
General Reserve & 18,000 & Bank & 80,000
Ram’s Capital & 1,00,000 & Stock & 80,000
Ravi’s Capital & 2,00,000 & Debtors & 3,00,000
Rohan’s Capital & 3,00,000 & Investments & 50,000
& & Land & 2,50,000
Total & 9,80,000 & Total & 9,80,000
\end{array} \] Rohan died on 30\textsuperscript{th September, 2023. On the death of a partner, the partnership deed provided for the following:}
(i)Goodwill was to be valued at two years purchase of average profit of last three years. The profits for the last three years were: \[ 2020-21 = \rupee 4,50,000, \; 2021-22 = \rupee 90,000, \; 2022-23 = \rupee 1,35,000 \]
(ii)Deceased partner’s share of profit till the date of death will be calculated on the basis of average profit of the last three years. Prepare Rohan’s Capital Account to record the above transactions.

Hint:

Allocate goodwill and profits for the deceased partner in the specified ratio, ensuring all balances are adjusted.

Answer 1

Step 1: Calculate Goodwill: \[ \text{Average Profit} = \frac{\rupee 4,50,000 + \rupee 90,000 + \rupee 1,35,000}{3} = \rupee 2,25,000 \] \[ \text{Goodwill} = \rupee 2,25,000 \times 2 = \rupee 4,50,000 \] \[ \text{Rohan’s Share of Goodwill} = \frac{1}{6} \times \rupee 4,50,000 = \rupee 75,000 \] Step 2: Calculate Profit Till Date of Death: \[ \text{Rohan’s Share of Profit} = \frac{1}{6} \times \rupee 2,25,000 \times \frac{6}{12} = \rupee 18,750 \] Rohan’s Capital Account: \begin{center} \begin{tabular}{|c|c|c|c|} Date & Particulars & Debit (\rupee) & Credit (\rupee)
2023-09-30 & To Cash A/c & 18,750 &
& To Ravi’s Capital A/c (Goodwill) & 45,000 &
& To Ram’s Capital A/c (Goodwill) & 30,000 &
& By Balance b/d & & 3,00,000
& By Profit and Loss A/c & & 18,750
& By Goodwill A/c & & 75,000
\end{tabular} \end{center}