Corporate Accounting 1

Q7. Ali, Khalid and Salim are partners of a firm (AKS LLC) that deals in used computer, printer, Xerox machines, servers, repair, and maintenance service in corporates and on call services. Everything was going well, but all in sudden Salim has been died in road accident. Salim's wife appointed as the legal representatives to receive his share. Sharing profit and losses in the ratio of 5:3:2. Salim maintain all accounts like dealing and making final accounts and bank dealing. Due to Salim's death it was difficult to collect all assets, liabilities and capital amount information because Khalid and Ali, they don't have experiences to maintain the accounts. But at last they collect the below information but some information's missing. Name of Accounts Name of Accounts Cash at Bank All's Capital 39,500 Sundry Debtors 17,000 Khalid's Capital 62,500 Stock 25,000 Salim's Capital 78,000 Patents 18,000 General Reserve A/C 28,000 Equipment 75,000 Premises 50,000 Sundry Creditors 15,000 Being a friend of Ali, you will help to find out the missing information and Salim's settlement in following condition. Mr. Salim died on 31st March 2020. The legal representative of the deceased partner entitled to receive his share after the following adjustments. OMR OMR a) Goodwill be valued at 2.5 year's purchase of the average profit of the last four years, Which were 2016 OMR 32,500; 2017 OMR 30,000; 2018 OMR 40,000; 2019 OMR 37,500. b) Premises to be appreciated by OMR 62,500. c) Provision for doubtful debts to be made at 6% on debtor d) The assets are to be valued as, Equipment be valued at OMR 70,000 and Patents at OMR 20,000 e) For the purpose of calculating Salim's share in the profit of 2020, the profit in 28/1duid be taken to have been earned on the same as in 2019. f) A sum of OMR15,000 is to be paid immediately to the executors of Salim and the balance transferred to his loan account You are required to pass necessary Journal entries with narrations to record the above transactions, prepare the Revaluation Account and Salim executors account. (2+1+2 = 5 Marks)