Arun , Varun and Karan were partners in a firm sharing profits in the ratio of 4:3:3. On 31st March, their Balance Sheet was as follows: On 30th Septembe, 2014, Karan died. The Partnership Deep provided for the following to the executors of the deceased partner: (i) His share in the goodwill of the firm calculated on the basis of three years' purchase of the average profits of the last four years. The profits of the last four year were Rs 1,90,00, Rs 1,70,000, Rs 1,80,000 and Rs 1,60,000 respectively. (ii) His share in the profits of the firm till date of his death calculated on the basis of the average profits of the last four years. (iii) Interest @8% per annum on the credit balance, if any, in his Capital Account. (iv) Interest on his lone @12% per annum. Prepare Karan's Capital Account to be presented to his executors, assuming that his loan and interest on loan were transferred to his Capital Account.

Arun , Varun and Karan were partners in a firm sharing profits in the

1.	Arun , Varun and Karan were partners in a firm sharing profits in the ratio of 4:3:3. On 31st March, their Balance Sheet was as follows: On 30th Septembe, 2014, Karan died. The Partnership Deep provided for the following to the executors of the deceased partner: (i) His share in the goodwill of the firm calculated on the basis of three years' purchase of the average profits of the last four years. The profits of the last four year were Rs 1,90,00, Rs 1,70,000, Rs 1,80,000 and Rs 1,60,000 respectively. (ii) His share in the profits of the firm till date of his death calculated on the basis of the average profits of the last four years. (iii) Interest @8% per annum on the credit balance, if any, in his Capital Account. (iv) Interest on his lone @12% per annum. Prepare Karan's Capital Account to be presented to his executors, assuming that his loan and interest on loan were transferred to his Capital Account.
Answer» Solution : 1. GOODWILL of the FIRM `=((Rs1,90,000+Rs1,70,000+Rs1,80,000+Rs1,60,000)/(4))xx3` Karan's Share of Goodwill `=Rs 5,25,000xx3//10=Rs1,57,500,` which is contributed by Arun and Varun in their gaining RATIO, i.e., `4:3.` Arun's contribution `=Rs1,57,500xx4//7=Rs90,000.` Varun's contribution `Rs1,57,500xx3//7=Rs67,500.` 2. CALCULATE of Share of Profit `=Rs1,75,000xx3//10xx6//12=Rs26,250.` 3. Calculate of interest on Lone `=Rs28,000xx12//100xx6//12=Rs1,680.`

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