Chapter: Reconstitution of Partnership (Death of Partner)· Book-Keeping & Accountancy
Suresh, Naresh and Paresh were equal partners. On 31st March, 2019 their Balance Sheet was as follows:Balance Sheet as on 31st March, 2019LiabilitiesAmount (₹)AssetsAmount (₹)Capital Accounts:Land and Building2,00,000Suresh2,50,000Furniture1,50,000Na…
Q.5 Suresh, Naresh and Paresh were equal partners. On 31st March, 2019 their Balance Sheet was as follows:
Balance Sheet as on 31st March, 2019
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capital Accounts: | Land and Building | 2,00,000 | |
| Suresh | 2,50,000 | Furniture | 1,50,000 |
| Naresh | 1,00,000 | Debtors | 1,50,000 |
| Paresh | 1,00,000 | Cash | 1,00,000 |
| Sundry creditors | 1,50,000 | ||
| 6,00,000 | 6,00,000 |
Suresh died on 30th June, 2019 and the following adjustments were agreed as:
- Furniture was to be adjusted to its market price of ₹ 1,70,000.
- Land and building was to be depreciated by 10%.
- Provide R.D.D. at 5% on debtors.
- The profit up to the date of death of Suresh is to be calculated on the basis of average profit of last year which was ₹ 90,000.
Prepare: (a) Profit and loss adjustment account. (b) Partners’ capital account. (c) Balance sheet of the continuing firm.
OR
Convert following Trading and Profit and Loss Account into Vertical Income Statement:
Trading and Profit and Loss Account for the year ended 31st March, 2020
| Dr. Particulars | Amount (₹) | Cr. Particulars | Amount (₹) |
|---|---|---|---|
| To Opening Stock | 50,000 | By Sales | 6,00,000 |
| To Purchases | 4,50,000 | By Closing stock | 1,50,000 |
| To Carriage | 20,000 | ||
| To Direct expenses | 30,000 | ||
| To Wages | 50,000 | ||
| To Gross Profit c/d | 1,50,000 | ||
| Total | 7,50,000 | 7,50,000 | |
| To Office expenses | 62,500 | By Gross profit b/d | 1,50,000 |
| To Finance expenses | 15,000 | ||
| To Selling expenses | 50,000 | ||
| To Net profit c/d | 22,500 | ||
| Total | 1,50,000 | 1,50,000 |