X and Y are partners. The Partnership Deed provides inter alia:
(a) That the Accounts be balanced on 31st March every year.
(b) That the profits be divided as: X one-half, Y one-third and carried to a Reserve one-sixth.
(c) That in the event of the death of a partner, his Executors be entitled to be paid:
- The capital to his credit till the date of death.
- His proportions of profits till the date of death based on the average profits of the last three completed years.
- By way of Goodwill, his proportion of the total profits for the three preceding years.
| Liabilities | ₹ | Assets | ₹ |
| Capital A/cs: X Y Reserve Creditors |
9,000 6,000 3,000 3,000 |
Sundry Assets | 21,000 |
| 21,000 | 21,000 |
Profits for three years ended 31st March, were: 2021 – ₹ 4,200; 2022 – ₹ 3,900; 2023 – ₹ 4,500. Y died on 1st August, 2023. Prepare necessary accounts.
[Ans.: Amount due to Y’s Executors – ₹ 12,800.]
Solution:-
