Question

Sunny, Honey and Rupesh were partners in a firm. On 31st March, 2014, their Balance Sheet was as follows:
Honey died on 31st December, 2014. The Partnership Deed provided that the representative of the deceased partner shall be entitled to:
(a) Balance in the Capital Account of the deceased partner.
(b) Interest on Capital @ 6% per annum up to the date of his death.
(c) His share in the undistributed profits or losses as per the Balance Sheet.
(d) His share in the profits of the firm till the date of his death, calculated on the basis of rate of net profit on sales of the previous year. The rate of net profit on sales of previous year was 20%. Sales of the firm during the year till 31st December, 2014 was ₹ 6,00,000.
Prepare Honey’s Capital Account to be presented to his executors.

Answer 1

HEYA MATE YOUR ANSWER IS

c) His share in the undistributed profits or losses as per the Balance Sheet.

(d) His share in the profits of the firm till the date of his death, calculated on the basis of rate of net profit on sales of the previous year. The rate

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Answer 2

Explanation:

Working Notes:

1. Calculation of Honey's Interest on Capital

Interest on Capital = $=30,000 \times \frac{9}{12} \times \frac{6}{100}=1,350$

2. Calculation of Honey's in profit:

Honey's profit = $Sales \times \frac{\text { Rate of Profit }}{100}$

$= 6,00,000 \times \frac{20}{100}=21,20,000$

Honey's share in profits = $=1,20,000 \times \frac{1}{3}=40,000$

3. Calculation of Honcy's Share in General Reserve Honey's Reserve

Honey's Reserve $=30,000 \times \frac{1}{3}=10,000$.