Jag,Pravesh and Chander are partners in a firm sharing profits in the ratio of 5 : 3: 2 respectively. Firm closes its accounts on 31st March every year. Jagu died on 30th September 2012. There was a balance of 47,000 in Jag’s capital Account at the beginning of the year. In the event of death of any partner, the partnership deed provides for the following.
- Interest on Capital will be calculated at the rate of 12% p.a
- Reserve fund of the firm is 1,00,000
- His share of profit till the date of death will be calculated on the basis of sales. It is also
specified that the sales during the ear 2011- 2012 were Rs. 10,00,000. The sales form 1st April 2012 to 30th September, 2012 were Rs. 2, 00,000. The profits of the firm for the year ending
31st March 2012 was Rs. 1, 00,000.
Prepare Jag’s Capital Account to be presented to his representatives.
Dear Student
Regards
| Jagu's Capital A/c | |||||
| Date | Particulars | Amount (in Rs) | Date | Particulars | Amount (in Rs) |
| Bal B/d | 47,000 | ||||
| Interest on Capital (47,000 x 12% x 6/12) | 2,820 | ||||
| Reserve Fund | 50,000 | ||||
| Profit and Loss Suspense | 10,000 | ||||
| Jagu's Executors A/c | 109,820 | ||||
| 109,820 | 109,820 | ||||
| Calculation of profit share till death | ||
| Profit of 2011-12 | 100,000 | |
| Sales of 2011-12 | 1,000,000 | |
| Profit ratio | (1,00,000 / 10,00,000) x 100 | 10% |
| Sales of current year till death of Jagu (1-04-12 to 30-09-12) | 200,000 | |
| Total profit based on Rate calculated above | (2,00,000 x 10%) | 20,000 |
| Share of Jagu | (20,000 x 5/10) | 10,000 |
Regards