Death of a partner Solution

Death of a partner Solution:

In the books of the firm.

Profit and Loss Adjustment A/c

Particulars	Rs.	Rs.	Particulars	Rs.	Rs.
To R.D.D. A/c		4000	By Machinery A/c		10000
To Revaluation Profit:
Ashish Capital A/c	3600
Satish Capital A/c	1200
Manish Capital A/c	1200	6000
		10000			10000

Manish’s Capital A/c

Particulars	Rs.	Particulars	Rs.
To Drawings A/c	40000	By Balance b/d	50000
To Interest on Drawings A/c	1200	By Reserve Fund A/c	4000
To Executor’s Loan A/c	62500	By Profit and Loss Suspense A/c	6000
		By Goodwill A/c	40000
		By Profit and Loss Adjustment A/c	1200
		By Interest on Capital A/c	2500
	103700		103700

Working of Manish’s Share of Profit:

= Previous year’s Profit x Profit Sharing Ratio x Period.

Working of Manish’s Share of Goodwill: