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Model Test Papers M.491

11. Mahesh, Naresh and Suresh were partners sharing profits in the ratio of 3 : 2 : 1.
Accounts are closed on 31st March annually. Suresh died on 1st August, 2017 and the
Partnership Deed provided that:
(a) Besides the deceased partner’s capital, his executors are entitled to interest on
capital @ 10% per annum up to date of his death.
(b) Share of profit from the closure of the last accounting date till the date of death
on the basis of current year’s profit. It is estimated that current year’s profit will
be 20% higher than previous year’s profit.
(c) Share of goodwill calculated on the basis of three times the average profit of the
last four years.
On 1st April, 2017, Suresh’s Capital Account stood at ` 2,00,000 and his drawings
from 1st April, 2017 to the date of his death amounted to ` 27,500.
The profits or losses of the last four years are as under:

` 75,000; ` 1,40,000; ` 25,000 (Loss); and ` 1,70,000.
Prepare Suresh’s Capital Account to calculate the amount to be paid to his executors.
(4)
12. X, Y and Z are partners in a firm. The terms of partnership are:
(a) Profits and Losses are to be shared by X, Y and Z in the ratio of 6 : 3 : 1.
(b) Interest on capitals is to be allowed @ 6% p.a.

(c) Interest on opening Current Account balances is to be allowed or charged @ 5% p.a.
(d) 5% interest is to be charged on the excess drawings (excluding salary) over share
of profit.
Share of profit for this clause means share in balance profit after deducting salary
to partners, interest on Capital and Current Accounts. Interest on Drawings under
this clause is to be ignored for this purpose.

(e) Y and Z to get salary @ ` 6,000 and ` 8,000 p.a. respectively.
The following facts are available:
Partners Capital Accounts Current Accounts Drawings for 2017–18
31st March, 2018 31st March, 2017 (including Salary)
` ` `
X 90,000 20,000 (Cr.) 40,000
Y 60,000 10,000 (Dr.) 31,000
Z 30,000 12,000 (Cr.) 23,000
The Profit and Loss Account for the year ended 31st March, 2018 showed net profit of
` 1,15,900.
Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2018.
(4)