Rajesh, Rakesh, and Mahesh were equal partners on 31st March 2019. Their Balance Sheet was as follows 31st March 2019.

Book Keeping, Accountancy, 12th Std, HSC Accounts, Death of Partner, 

Chapter 5, Reconstitution of Partnership (Death of Partner)

Practical Problems | Q 1 | Page 202

Rajesh, Rakesh, and Mahesh were equal partners on 31st March 2019. Their Balance Sheet was as follows 31st March 2019.

Balance Sheet as on 31st March 2019

Liabilities	Amount ₹	Assets	Amount ₹
Capital Account :		Land and Building	4,00,000
Rajesh	5,00,000	Furniture	3,00,000
Rakesh	2,00,000	Debtors	3,00,000
Mahesh	2,00,000	Stock	1,00,000
Sundry creditors	90,000	Cash	1,00,000
Bills Payable	60,000
Bank loan	1,50,000
	12,00,000		12,00,000

Mr. Rajesh died on 30th June 2019 and the following adjustment were agreed as

1) Furniture was to be adjusted to its market price of 3,40,000

2) Land and Building was to be depreciated by 10%

3) Provide R.D.D 5% on debtors

4) The Profit up to the date of death of Mr. Rajesh is to be calculated on the basis of last years profit which was ₹1,80,000

Prepare:

1) Profit and Loss adjustment A/c

2) Partners capital account

3) Balance sheet of the continuing firm

Solution

In the books of the Partnership Firm Profit and Loss Adjustment Account

Particulars	Amount  (₹)	Particulars	Amount (₹)
To Land and Building A/c	40,000	By Furniture A/c	40,000
To R.D.D. A/c	15000	By Partners' Capital A/c (Loss)
		Rajesh 5000
		Rakesh 5000
		Mahesh 5000	15000
	55000		55000

Particulars	Rajesh  (₹)	Rakesh  (₹)	Mahesh  (₹)	Particulars	Rajesh  (₹)	Rakesh  (₹)	Mahesh  (₹)
To Profit and Loss Adjustment A/c – Loss	5,000	5,000	5,000	By Balance b/d	5,00,000	2,00,000	2,00,000
To Rajesh's Executor’s A/c	5,10,000			By Profit and Loss Suspense A/c	15,000
To Balance c/d		1,95,000	1,95,000
	5,15,000	2,00,000	2,00,000		5,15,000	2,00,000	2,00,000

Balance Sheet as on 1st July 2019 

Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital Accounts :			Land and Building	4,00,000
Rakesh	1,95,000		Less: Depreciation	40,000	3,60,000
Mahesh	1,95,000	3,90,000	Furniture	3,00,000
Rajesh’s Executor’s Loan A/c		5,10,000	Add: Appreciation	40,000	3,40,000
Sundry Creditors		90,000	Debtors	3,00,000
Bills Payable		60,000	Less: R.D.D. (5%)	15,000	2,85,000
Bank Loan		1,50,000	Stock		1,00,000
			Cash		1,00,000
			Profit and Loss Suspense A/c		15,000
		12,00,000			12,00,000

Working Note :

The profit of the firm last year was ₹ 1,80,000.

Proportionate profit up to the date of death for Rajesh is as follows = 180000 x (3/12) x (1/3) = ₹ 15,000

Book-keeping and Accountancy 12th Standard 

HSC Maharashtra State Board. Latest Syllabus.

Chapter 1: Introduction to Partnership and Partnership Final Accounts

Chapter 2: Accounts of ‘Not for Profit’ Concerns

Chapter 3: Reconstitution of Partnership (Admission of Partner)

Chapter 4: Reconstitution of Partnership (Retirement of Partner)

Chapter 5: Reconstitution of Partnership (Death of Partner)

Chapter 6: Dissolution of Partnership Firm

Chapter 7: Bills of Exchange

Chapter 8: Company Accounts - Issue of Shares

Chapter 9: Analysis of Financial Statements

Chapter 10: Computer In Accounting

 

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