OMTEX CLASSES: The Balance Sheet of Sohan, Rohan and Mohan who were sharing profits and Losses in the ratio of 3:2:1 as follows.

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

Chapter 5, Reconstitution of Partnership (Death of Partner)

Practical Problems | Q 5 | Page 204

The Balance Sheet of Sohan, Rohan and Mohan who were sharing profits and Losses in the ratio of 3:2:1 as follows.

Balance Sheet as on 31st March 2019

Liabilities	Amount ₹	Assets	Amount ₹
Bank Overdraft	18,000	Bank	48,000
Creditors	85,000	Debtors	30,000
Bills payable	40,000	Land and Building	40,000
Bank Loan	1,50,000	Machinery	80,000
General Reserve	27,000	Investments	40,000
Capital Account :		Computers	40,000
Sohan	20,000	Stock	90,000
Rohan	20,000	Patents	12,000
Mohan	20,000
	3,80,000		3,80,000

Mr. Rohan died on 1st October 2019 and the following adjustments were made.

1. Goodwill of the firm is valued at 30,000

2. Land and Building and Machinery were found to be undervalued by 20%

3. Investments are valued at ₹ 60,000

4. Stock to be undervalued by ₹ 5000 and a provision of 10% as debtors were required.

5. Patents were value less

6. Mr. Rohan was entitled to share in profits up to the date of death and it was decided that he may be allowed to retain his drawings as his share of profit. Rohan’s drawings till the date of death was ₹ 25000

Prepare Partners' capital accounts.

Solution

In the books of the Partnership firm Partners’ Capital Accounts

Particulars	Sohan (₹)	Rohan (₹)	Mohan (₹)	Particulars	Sohan (₹)	Rohan (₹)	Mohan (₹)
To Executor’s Loan A/c	-	49,000	-	By Balance b/d	20,000	20,000	20,000
To Drawings A/c	-	25,000	-	By revaluation A/c	15,000	10,000	5,000
To Balance c/d	63,500	-	34,500	By General reserve A/c	13,500	9,000	4,500
				By Goodwill A/c	15,000	10,000	5,000
				By Profit and Loss Suspense A/c		25,000
	63,500	74,000	34,500		63,500	74,000	34,500

Working Notes :

Revaluation Account

Particulars		Amount (₹)	Particulars	Amount (₹)
To Stock A/c		5,000	By Land and Building A/c	10,000
To R.D.D. A/c		3,000	By Machinery A/c	20,000
To Patents A/c		12,000	By Investments A/c	20,000
To Partner’s Capital A/cs – Profit
Sohan	15,000
Rohan	10,000
Mohan	15,000	30,000
		50,000		50,000

(2) Firm’s goodwill = ₹ 30,000. Distribute among partners in their profit and loss ratio 3 : 2 : 1.

Chapter 5 - Reconstitution of Partnership (Death of Partner) [Latest edition] Balbharati Solutions for Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board.

(5) Patents were valueless means it is a loss for business.

(6) Rohan’s share in profit is ₹ 25,000 and his drawings are ₹ 25,000. Rohan is allowed to retain his drawings as his share of profit. Means write ₹ 25,000 as drawings on debit side and write ₹ 25,000 as Profit and Loss Suspense A/c on Credit side of Partners’ Capital A/c.

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