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M.4 An Aid to Accountancy—CBSE XII
A died on 30th June, 2018. The Partnership Deed provided for the following on the
death of a partner:
(i) Goodwill of the firm be valued at two years’ purchase of average profit for the last
three years.
(ii) Share of profit or loss till the date of death was to be calculated on the basis of
sales. Sales for the year ended 31st March, 2018 amounted to ` 4,00,000 and that
from 1st April to 30th June, 2018 to ` 1,50,000. The profit for the year ended
31st March, 2018 was ` 1,00,000.
(iii) Interest on Capital was to be provided @ 6% p.a.
(iv) Average profit of the last three years was ` 42,000.
(v) According to A’s will, the executors should donate his share to a ‘‘Home meant for
Physically Challenged Children’’.
Prepare A’s Capital Account to be rendered to his executors. (6)
14. X and Y were partners in a firm, engaged in manufacturing of chemicals, sharing
profits in the ratio of 2 : 3. On 31st March, 2018, their Balance Sheet was as follows:
Liabilities ` Assets `
Creditors 1,05,000 Bank 1,55,000
Workmen Compensation Reserve 1,00,000 Stock 1,00,000
Capital A/cs: Furniture 1,00,000
X 2,00,000 Computers 50,000
Y 3,00,000 5,00,000 Land and Building 3,00,000
7,05,000 7,05,000

The partners decided to dissolve the firm on 1st April, 2018. The Assets and Liabilities
were settled as follows:
(i) X agreed to take Land and Building at ` 3,50,000 by paying cash.
(ii) Stock was sold for ` 90,000.
(iii) Creditors accepted furniture and computers in full settlement of their claims.
Pass necessary Journal entries for dissolution of the firm.
Or
Ram and Shyam are partners in a firm sharing profits in the ratio of 2 : 3. They decided
to dissolve the firm. On 31st March, 2018, their Balance Sheet was as follows:
BALANCE SHEET
as on 31st March, 2018
Liabilities ` Assets `
Creditors 65,000 Land 1,20,000
Bills Payable 35,000 Machinery 65,000
Capital A/cs: Goodwill 10,000
Ram 75,000 Stock 25,000
Shyam 75,000 1,50,000 Debtors 20,000
Cash at Bank 10,000
2,50,000 2,50,000