2 Rs. 25,000 Rs.75.000 Goodwill - Rs. 15.000 10 Charu's Share in Goodwill Rs.75.000 Rs 24,000 1) Share in Prolis Profits for 2009-10 6 12 = Rs. 12,000 Profits up to the date of death = Rs.24.000 x = Rs. 2.400 2 Charu's share - Rs 12,000 x 10 te) Salary Rs.3.000 x 6 = Rs.18.000 JSTRATION 34 (Death of a Partner) A, B and C are in partnership sharing profits is the proportion of two-thirds, one-sixth and one-sixth respectively. A died on 30 June 2010, three months after the annual accounts had been prepared, and in accordance with the partnership agreement, his share of the profits to the date of death was estimated on the exact basis of the profits for the preceding year. In addition to this, the agreement provided for interest on capital at 5% per annum on the balance standing to the credit of the Capital Account at the date of the last Balance Sheet, and also for goodwill, which was to be brought into K2 account at two years' purchase of the average profits for the last three years, after charging interest on capital. Goodwill account is not to be opened in the books. A's capital on 31" March, 2010 stood at Rs.12,000 and his drawings to the date of death amounted to Rs.900. The net profits of the business for the three preceding years amounted to Rs.3.350, Rs.4,150 and Rs.4,050, respectively, after charging interest on capital. Reserve Fund on the date of death was Rs. 9,000. You are instructed to prepare A's Capital Account as at the date of death, for a settlement with his executors. TITION