Question

Ram, Ravi and Rohan were partners sharing profits in the ratio of 2 : 3 : 1. On 31^st March, 2023, their Balance Sheet was as follows: 

Balance Sheet of Ram, Ravi and Rohan as on 31.3.2023
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Creditors		3,62,000	Cash		14,000
General Reserve		18,000	Bank		2,96,000
Capitals:			Stock		80,000
Ram	1,00,000	6,00,000	Debtors	3,00,000	2,90,000
Ravi	2,00,000		Less: provision for doubtful debts	10,000
Rohan	3,00,000		Investments		50,000
			Land		2,50,000
		9,80,000			9,80,000

Rohan died on 30^th September, 2023. On the death of a partner the partnership deed provided for the following: 

1. Goodwill was to be valued at two years purchase of average profit of last three years. The profits for the last three years were: 2020-21 ₹ 45,000, 2021-22 ₹ 90,000 and 2022-23 ₹ 1,35,000. 
2. Deceased partner's share of profit till the date of his death will be calculated on the basis of average profit of last three years. 

Prepare Rohan's Capital Account to be rendered to his executors. 

Answer 1

Dr.	Rohan' s Capital Account		Cr.
Particulars	Amount	Particulars	Amount
To Rohan's Executor's A/c	3,40,500	By Balance b/d	3,00,000
		By General Reserve A/c	3,000
		By Ram's Capital A/c	12,000
		By Ravi's Capital A/c	18,000
		By Profit and Loss Suspense A/c	7,500
	3,40,500		3,40,500

Working note:

Goodwill = Average profit × No. of years of purchases

= `((45,000 + 90,000 + 1,35,000)/3) xx 2`

= ₹ 1,80,000

Rohan share of goodwill = `1,80,000 × 1/6` = 30,000

Gaining ratio = 2 : 3

Calculation of P & L Suspense:

Average profit = 90,000 

P & L Suspense = `90,000 × 1/6 xx 6/12` = ₹ 7,500