6. B and N were partners. The partnership deed provides inter alia: (i) That the accounts...

Transcribed Image Text:

6. B and N were partners. The partnership deed provides inter alia: (i) That the accounts be balanced on 31st December each year. (ii) That the profits be divided as follows: B: One-half; N: One-third and carried to Reserve Account: One-sixth. (iii) That in the event of death of a partner, his executor will be entitled to the following: (a) the capital to his credit at the date of death; (b) his proportion of profit to date of death based on the average profits of the last three completed years; (c) his share of goodwill based on three years' purchases of the average profits for the three preceding completed years. Trial Balance on 31" December, 2015 Particulars B's Capital N's Capital Reserve Bills Receivable Investments Cash Dr. (Rs.) Cr. (Rs.) 90,000 60,000 30,000 50,000 40,000 1,10,000 20,000 Trade Payables Total 2,00,000 2,00,000 The profits for the three years were 2013 Rs. 42,000; 2014: Rs. 39,000 and 2015 Rs. 45,000. N died on 1st May, 2016. Show the calculation of N's (i) Share of Profits; (ii) Share of Goodwill; (iii) Draw up N's Executors Account as would appear in the firm's ledger transferring the amount to the Loan Account. 6. B and N were partners. The partnership deed provides inter alia: (i) That the accounts be balanced on 31st December each year. (ii) That the profits be divided as follows: B: One-half; N: One-third and carried to Reserve Account: One-sixth. (iii) That in the event of death of a partner, his executor will be entitled to the following: (a) the capital to his credit at the date of death; (b) his proportion of profit to date of death based on the average profits of the last three completed years; (c) his share of goodwill based on three years' purchases of the average profits for the three preceding completed years. Trial Balance on 31" December, 2015 Particulars B's Capital N's Capital Reserve Bills Receivable Investments Cash Dr. (Rs.) Cr. (Rs.) 90,000 60,000 30,000 50,000 40,000 1,10,000 20,000 Trade Payables Total 2,00,000 2,00,000 The profits for the three years were 2013 Rs. 42,000; 2014: Rs. 39,000 and 2015 Rs. 45,000. N died on 1st May, 2016. Show the calculation of N's (i) Share of Profits; (ii) Share of Goodwill; (iii) Draw up N's Executors Account as would appear in the firm's ledger transferring the amount to the Loan Account.