[ISC] Q. 17 Death of Partner Solution TS Grewal Class 12 (2023-24)

Solution to Question number 17 of the Death of Partner Chapter of TS Grewal Book ISC Board 2023-24 Edition?

Munish, Bishan and Chahat were partners sharing profits in the ratio of 3 : 2 : 1. Balance Sheet of the firm is given below as at 31st March, 2023:

Liabilities	₹	Assets	₹
Bills Payable Creditors Reserve Loans Capital A/cs: Munish Bishan Chahat	2,000 5,000 6,000 7,100 22,750 15,250 12,000	Cash at Bank Bills Receivable Stock Debtors Furniture Plant and Machinery Building	5,800 800 9,000 16,000 2,000 6,500 30,000
	70,100		70,100

Chahat died on 31st July, 2023. Partnership Deed provides that:

(i) Share of deceased partner’s Goodwill is to be valued on the basis of 3 year’s purchsae of last 5 years’ average profits.

Profits for the last 5 years (ended 31st March) were:

2023 – ₹ 24,000; 2022 – ₹ 16,000; 2021 – ₹ 20,000; 2020 – ₹ 10,000 and 2019 – ₹ 5,000.

(ii) Deceased partner to be given share of profits up to the date of death on the basis of profits for previous year.

(iii) Assets have been revalued as: Stock ₹ 10,000; Debtors ₹ 15,000; Furniture ₹ 1,500; Plant and Machinery ₹ 5,000; Building ₹ 35,000. A Bill for ₹ 600 was valueless.

(iv) An amount of ₹ 12,900 was paid immediately to Chahat’s executors and the balance to be paid in two equal annual instalments together with interest @ 10% p.a. on the amount outstanding.

Give Journal entries and show Chahat’s Executors’ Account.