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152 Accountancy – Partnership Accounts Rockey died on June 30, 2020. 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, 2018, March 31, 2019 and March 31, 2020 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. (Ans : Sony’s Executor Account is Rs. 33,821) 10. Narang, Suri and Bajaj are partners in a firm sharing profits and losses in proportion of 1 2, 1 6 and 1 3 respectively. The Balance Sheet on April 1, 2020 was as follows: Books of Suri and Bajaj Balance Sheet as on April 1, 2020 Liabilities Amount Assets Amount (Rs.) (Rs.) Bills Payable 12,000 Freehold Premises 40,000 Sundry Creditors 18,000 Machinery 30,000 Reserves 12,000 Furniture 12,000 Capital Accounts: Stock 22,000 Narang 30,000 Sundry Debtors 20,000 Suri 30,000 Less: Reserve for Bad 1,000 19,000 Bajaj 28,000 88,000 Debt Cash 7,000 1,30,000 1,30,000 Bajaj retires from the business and the partners agree to the following: a) Freehold premises and stock are to be appreciated by 20% and 15% respectively. b) Machinery and furniture are to be reduced by 10% and 7% respectively. c) Bad Debts reserve is to be increased to Rs. 1,500. d) Goodwill is valued at Rs. 21,000 on Bajaj’s retirement. e) The continuing partners have decided to adjust their capitals in their new profit sharing ratio after retirement of Bajaj. Surplus/deficit, if any, in their capital accounts will be adjusted through current accounts. Prepare necessary ledger accounts and draw the Balance Sheet of the reconstituted firm. (Ans : Profit on Revaluation, Rs. 6,960; Balance in Capital Accounts of Narang, Rs. 49,230; and that of Suri, Rs. 16,410. Amount at Credit in Bajaj Capital is Rs. 41,320). Reprint 2026-27