CH 6: DEATH OF A PARTNER WORKSHEET

Class 12 - Accountancy
Time Allowed: 1 hour Maximum Marks: 51

Section A
1. Siya, Riya and Garima are partners in firm sharing profits and losses in the ratio of 4 : 3 : 1. As per the terms of [3]
Partnership Deed on the death of any partner, Goodwill was to be valued at 50% of the net profits credited to
that Partner's Capital Account during the last three completed years before her death. Books are closed on 31st

December each year. Siya died on 29th February 2023. The profits for the last five years were: 2018 - ₹ 60,000;
2019 - ₹ 97,000; 2020 - ₹ 1,05,000; 2021 - ₹ 30,000 and 2022 - ₹ 84,000.
On the date of Siya's death, Building was found undervalued by ₹ 80,000, which was to be considered. Calculate
amount of Siya's share of Goodwill in the firm and record the adjustment Journal Entries of Goodwill and
revaluation of Building. The new profit sharing ratio between Riya and Garima will be equal.
2. Akash, Bhavya and Sejal were partners sharing profits in the ratio 2 : 2 : 1. On July 1, 2023 Sejal died. The [3]
books of accounts are closed on March 31 every year. Sales for the year 2022-23 amounted to ₹ 5,00,000 and
that from 1st April to 30th June 2023 were ₹ 1,40,000. The rate of profit during the past three years had been
10% on sales. Since Sejal’s legal representative was her only son, who is specially-abled, it was decided that the
profit for the purpose of settling Sejal’s account is to be calculated as 20% on sales. Calculate Sejal’s share of
profits till the date of her death and pass necessary journal entry for the same.
3. Neema, Diya and Siya were partners in a firm sharing profits and losses in the 3 : 4 : 3. Books were closed on [3]
31st March every year. Siya died on 1st February, 2023. As per the partnership deed Siya’s executors are entitled
to her share of profit till the date of death on the basis of Sales turnover. Sales for the year ended 31st March
2022 was ₹ 10,00,000 and profit for the same year was ₹ 1,20,000. Sales show a positive trend of 20% and
percentage of profit earning is reduced by 2%.
Journalise the transaction along with the working notes.
Section B
4. Manav, Nath and Narayan were partners in a firm sharing profits in the ratio of 1 : 2 : 1. The firm closes its [4]
books on 31st March every year. On 30th September, 2015, Nath died. On that date, his capital account showed
a debit balance of Rs 5,000. There was a debit balance of Rs 30,000 in the profit and loss account. The goodwill
of the firm was valued at Rs 3,80,000. Nath’s share of profit in the year of his death was to be calculated on the
basis of average profit of last 5 years, which was Rs 90,000. Pass necessary journal entries in the books of the
firm on Nath’s death.
5. A, B and C were partners sharing profits and losses in the ratio of 5 : 3 : 2. [4]
C died on 1st August, 2023. C had withdrawn ₹ 5,000 during the period from 1st April, 2023 to the date of death.
It was agreed between his executors and the remaining partners that:

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 i. Goodwill will be valued at 2.5 years' purchase of average of four completed years' profits. Profits for the
years ended 31st March, were:

Year 2020 2021 2022

Profit (₹) 1,01,000 14,000 16,000

ii. C's share of profit from the beginning of the accounting year till the date of death be calculated on the basis
of the average of three completed years' profit before death.
iii. Patents were undervalued by ₹ 17,000; Machinery was overvalued by ₹ 3,200.
iv. Market value of Investment on 1st August 2023 was ₹ 4,200.

On 31st March, 2023, their Balance Sheet was as follows:

Liabilities ₹ Assets ₹

Capital A/cs: Goodwill 5,000

A 67,500 Patents 26,000

B 47,500 Machinery 31,200

C 37,000 1,52,000 Investments 3,000

Investment Fluctuation Reserve 3,500 Stock 10,000

Workmen Compensation Reserve 3,500 Sundry Debtors 12,000

Sundry Creditors 51,000 Loan to C 41,000

Cash at Bank 5,800

Advertisement Expenditure 1,000

Profit and Loss A/c (2022 - 23) 75,000

2,10,000 2,10,000

Prepare C's Capital Account and C's Executors' Account.

6. Yogesh, Ravi and Mohit were partners sharing profits and losses in the ratio of 3 : 2 : 1. Ravi died on 30th June, [4]
2023. Loss from the beginning of the accounting year till the date of his death was estimated at ₹ 1,80,000.
Yogesh and Mohit decided to share future profits in the ratio of 3 : 2 w.e.f. 1st July, 2023.
Pass the necessary Journal entries to record Ravi's share of profit/loss up to the date of death.
Section C
7. Khanna, Seth and Mehta were partners in a firm sharing profits in the ratio of 3 : 2 : 5. On 31st December, 2010 [6]
the balance sheet of Khanna, Seth and Mehta was as follows:
Balance Sheet
as at 31st December, 2010

Amount Amount
Liabilities Assets
( Rs) ( Rs)

General Reserve 1,00,000 Goodwill 3,00,000

Loan from Seth 50,000 Land and Building 5,00,000

Creditors 75,000 Machinery 1,70,000

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 Capital A/cs Stock 30,000

Khanna 3,00,000 Debtors 1,20,000

Seth 2,00,000 Cash 45,000

Mehta 5,00,000 10,00,000 Profit and Loss A/c 60,000

12,25,000 12,25,000
======== =======

On 14th March, 2011 Seth died. The partnership deed provided that on the death of a partner the executor of the
deceased partner is entitled to:
i. Balance in capital account.
ii. Share in profits upto the date of death on the basis of last year's profit.
iii. His share in profit/loss on revaluation of assets and re-assessment of liabilities which were as follows
a. Land and building was to be appreciated by Rs 1,20,000.
b. Machinery was to be depreciated to Rs 1,35,000 and stock to Rs 25,000.
c. A provision of 2.5% for bad and doubtful debts was to be created on debtors.
iv. The net amount payable to Seth’s executors was transferred to his loan account which was to be paid later.
Prepare revaluation account, partners’ capital account, Seth’s executor’s account and balance sheet of Khanna
and Mehta who decided to continue the business keeping their capital balances in their new profit sharing ratio.
Any surplus or deficit to be transferred to current accounts of the partners.

8. X, Y and Z were partners sharing profits in the ratio of 3 : 2 : 1. As at 31st March, 2023, their Balance Sheet [6]

stood as under:

Liabilities ₹ Assets ₹

Sundry Creditors 44,000 Cash at Bank 22,000

Reserve 90,000 Stock 1,20,000

Capital: Debtors 64,000

X 2,00,000 Investments 2,50,000

Y 1,50,000 Fixed Assets 1,28,000

Z 1,00,000 4,50,000

5,84,000 5,84,000

Y died on 31st July, 2023. The partnership deed provides that the executors of the deceased partner are entitled
to:
i. The Capital to his credit at the time of his death;
ii. His share of reserves;
iii. His share of profits to the date of death based on the average profits of the last three completed years, less
10%, and
iv. Goodwill according to his proportion of the total profits for the three preceding years, which were ₹ 80,000;
₹ 1,30,000 and ₹ 1,50,000 respectively.

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 The Investments were sold at par and Y's executor’s were paid off.
Prepare Partner’s Capital Accounts, Y's Executor’s Account and Balance Sheet of the surviving partners X and
Z.
9. A, B, and C were partners in the firm sharing profits in the ratio of 2: 1: 1. Their Balance Sheet as on 31.3.2010 [6]
was as follows :

Liabilities Amt(Rs.) Assets Amt(Rs.)

Capital Accounts: Furniture 9,000

A 10,000 Stock 4,000

B 5,000 Debtors 6,000

C 5,000 20,000 Bills Receivable 2,000

General Reserve 3,200 Cash at Bank 5,000

Creditors 3,000 Cash in Hand 200

26,200 26,200

On 30.6.2010, C died. Under the provisions of partnership deed, the executors of a deceased partner were
entitled to the following :
i. The amount standing to the credit of partners’ capital account.
ii. Interest on capital @ 5% p.a.
iii. The share of goodwill on the basis of two years purchase of the average profits of the last three years.
iv. Share of profit in the year of his death, till the date of his death on the basis of the last year’s profit.
The profits of the firm during the previous three years were as follows:

Years Profit(Rs.)

2007 - 2008 5,000

2008 - 2009 9,000

2009 - 2010 7,000

C’s executors were paid Rs. 1,800 on 1.7.2010 and the balance in three equal installments of equal intervals of 6
months starting from 31.12.2010 with interest @ 10% per annum.
Pass necessary journal entries, at the time of C’s death, prepare C’s Capital Account and C’s Executor’s Account
up to 31.12.2010.
10. Puneet, Pankaj and Pammy are partners in a business sharing profits and losses in the ratio of 2 : 2 : 1 [6]
respectively. Their balance sheet as on March 31, 2019 was as follows:
Books of Puneet, Pankaj and Pammy
Balance Sheet as on March 31, 2019

Liabilities Amount ₹ Assets Amount ₹

Sundry Creditors 1,00,000 Cash at Bank 20,000

Capital Accounts: Stock 30,000

Puneet 60,000 Sundry Debtors 80,000

Pankaj 1,00,000 Investments 70,000

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 Pammy 40,000 2,00,000 Furniture 35,000

Reserve 50,000 Buildings 1,15,000

3,50,000 3,50,000

Mr. Pammy died on September 30, 2017. The partnership deed provided the following:
i. The deceased partner will be entitled to his share of profit up to the date of death calculated on the basis of
previous year’s profit.
ii. He will be entitled to his share of goodwill of the firm calculated on the basis of 3 years’ purchase of average
of last 4 years’ profit. The profits for the last four financial years are given below:
for 2015–16; ₹ 80,000; for 2016–17, ₹ 50,000; for 2017–18, ₹ 40,000; for 2018–19, ₹ 30,000.
The drawings of the deceased partner up to the date of death amounted to ₹ 10,000. Interest on capital is to
be allowed at 12% per annum. Surviving partners agreed that ₹ 15,400 should be paid to the executors
immediately and the balance in four equal yearly instalments with interest at 12% p.a. on the outstanding
balance.
Show Mr. Pammy’s Capital account, his Executor’s account till the settlement of the amount due.
11. Ram, Rakhi and Chandu were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. Ram died on [6]

1st July, 2023. The Partnership Deed provided that Ram's executors are entitled to her share of profit till the date
of death calculated on the basis of sales for the immediate previous year. Sales for the year ended 31st March,
2023 was ₹ 12,00,000 and the profit for the same year was ₹ 3,00,000; Sales shows a growth trend of 20% and
percentage of profit earning remains the same.
Journalise the transaction along with working notes.

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