25 :- Karim, Saleem and Raheem were partners in a firm sharing profits and losses in the ratio of 3:4:3. The firm closes its books on 31st March every year. On 1st October, 2019, Karim died. On Karim’s death, the goodwill of the firm was valued at Rs 3,50,000. Karim’s share in the profits of the firm in the year of his death was to be calculated on the basis of average profits for the last four years. The profits for the last four years were 2015-16 – Rs 1,70,000 ; 2016-17 – Rs 1,30,000; 2017 -18 – Rs 1,90,000 and 2018 -19 – Rs 1,10,000. The total amount payable to Karim’s executors on his death was Rs 7,35,000. It was paid on 15th October, 2019.
Pass necessary journal entries for the above transactions in the books of the firm.
26 :- Iqbal and Kamal are in partnership sharing profits and losses in 3:2. Kamal died three months after the date of the last Balance sheet. According to the partnership Deed, his legal heir is entitled to the following:
(a) His capital as per the last balance sheet.
(b) Interest on above capital @3% p.a. till the date of death.
(c) His share of profit till the date of death calculated on the basis of last year’s profit.
His drawings are to bear interest at an average of 2% on the amount irrespective of the period.
The net profits for the last three years, after charging insurance premium, were Rs 20,000; Rs 25,000 and Rs 30,000 respectively. Kamal’s capital as per balance sheet was Rs 40,000 and his drawings till the date of death were Rs 5,000.
Draw Kamal’s capital account to be rendered to his representative.
27 :- Trisha, Anisha and Rishika were partners in a firm sharing profits and losses in the ratio of 2:2:1. Their balance sheet as at 31st March, 2025 was as follows:
Trisha died on 31st July, 2025. According to the partnership deed, the executors of the deceased partner were entitled to :
(i) Balance in partner’s capital account
(ii) Salary @ Rs 15,000 per quarter.
(iii) Share of goodwill calculated on the basis of twice the average of past three year’s profits.
(iv) Share of profit from the closure of the last accounting year till the date of death on the basis of last year’s profit. Profit for 2022-23, 2023-24 and 2024–25 were Rs 1,00,000, Rs 2,00,000 and Rs 1,50,000 respectively.
(v) Trisha withdrew Rs 20,000 on 1st May, 2025 for her personal use.
Showing your working clearly, prepare Trisha’s capital account to be rendered to her executors.
28 :- X and Y are partners. The partnership deed provides as follows :
(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:
(i)The capital to his credit till the date of death.
(ii)His proportion of profits till the date of death based on the average profits of the last three completed years.
(iii)By way of goodwill, his proportion of the total profits for the three preceding years.
Profits for three years ended 31st March were : 2022 – Rs 4,200; 2023 – Rs 3,900; 2024 – Rs 4,500. Y died on 1st August, 2024.
Prepare necessary accounts.
29 :– A, B and C were partners in a firm. A died on 31st March, 2025 and the balance sheet of the firm on that date was as under
On A’s death it was found that patents were valueless, furniture was to be brought down to Rs 24,000, plant was to be reduced by Rs 10,000 and there was a liability of Rs 7,000 on account of workmen’s compensation.
Pass the necessary journal entries for the above at the time of A’s death.
Question 1 to 5 (New Profit – Sharing Ratio and Gaining Ratio)
Question 6 to 8 (Deceased Partner’s Share of Goodwill)
Question 9 to 13 (Calculation of Profit Share of a Deceased Partner)
Question 14 to 18 (Calculation of Profit Share of a Deceased Partner)
Question 19 to 23 (Calculation of Profit Share of a Deceased Partner)
Question 24 (Deceased Partner’s Share of Goodwill and Profit)
Question 25 to 29 (Determination of Amount Payable to Executors of a Deceased Partner)
Question 30 to 33 (Determination of Amount Payable to Executors of a Deceased Partner)
Question 34 (Adjustment of Capital)
Question 35 (Section 37 of the Indian Partnership Act)