Page 167 - DEBKVOL-1

Chapter 7 Death of a Partner 7.9
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Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars A (`) B (`) C (`) Particulars A (`) B (`) C (`)
To Partner’s Current A/c ... ... 5,000 By Balance b/d 1,20,000 80,000 40,000
To C’s Capital A/c (WN 1) ... 5,000 ... By Partners’ Current A/cs 8,000 2,500 ...
To Revaluation A/c 2,100 1,400 700 By General Reserve A/c 15,000 10,000 5,000
To C’s Capital A/c (WN 2) ... 17,000 ... By B’s Capital A/c ... ... 5,000
To C’s Executors’ A/c ... ... 61,300 (Goodwill)
To Balance c/d 1,40,900 69,100 ... By B’s Capital A/c (WN 2) ... ... 17,000
1,43,000 92,500 67,000 1,43,000 92,500 67,000

Dr. C’S EXECUTORS’ ACCOUNT Cr.
Date Particulars ` Date Particulars `
2017 2017
Dec. 31 To Bank A/c 33,715 June 30 By C’s Capital A/c 61,300
(` 30,650 + ` 3,065) Dec. 31 By Interest A/c 3,065
2018 (@ 10% for 6 months)
March 31 To Balance c/d 31,416 (` 61,300 × 10/100 × 6/12)
2018
March 31 By Interest A/c* 766
65,131 65,131
2018 2018
June 30 To Bank A/c 32,182 April 1 By Balance b/d 31,416
June 30 By Interest A/c 766
(` 30,650 × 10/100 × 3/12)
32,182 32,182

*(` 61,300 + ` 3,065 – ` 33,715) × 10/100 × 3/12 = ` 766.

Working Notes:
1. Gain/(Sacrifice) of Each Partner: A B C
New Share 1/2 1/2 ...
Old Share 3/6 2/6 1/6

Gain/(Sacrifice) 1/2 – 3/6 = Nil 1/2 – 2/6 = 1/6 –1/6 (Sacrifice)
∴ B will compensate C for his share of Goodwill, i.e., ` 30,000 × 1/6 = ` 5,000. He is only gaining partner.
2. Share of profit of C from 1st April, 2017 to 30th June, 2017 is debited to B’s Capital Account due to change
in new profit-sharing ratio.
3. C’s Share of profit = ` 4,08,000 × 1/6 × 3/12 = ` 17,000.
4. The date of closing the accounts is 31st March and date of payment of instalment is 30th June.