The Balance Sheet of X, Y and Z as at 31st March, 2018 was: The profit-sharing ratio was 3 : 2 : 1. Z died on 31st July, 2018. The Partnership Deed provides that: (a) Goodwill is to be calculated on the basis of three years purchase of the five years average profit. The profits were : 2017-18: ₹ 24,000; 2016-15: ₹ 20,000; 2014-15: ₹ 10,000 and 2013-14: ₹ 5,000. (b) The deceased partner to be given share of profits till the date of death on the basis of profits for the previous year. (c) The Assets have been revalued as: Stock – ₹ 10,000; Debtors – ₹ 15,000; Furniture – ₹ 1,500; Plant and Machinery – ₹ 5,000; Building – ₹ 35,000. A Bill Receivable for ₹ 600 was found worthless. (d) A Sum of ₹ 12,233 was paid immediately to Z’s Executors and the balance to be paid in two equal annual installments together with interest @ 10% p.a. on the amount outstanding. Give journal entries and show the Z’s Executors Account till it is finally settled.

The Balance Sheet of X, Y and Z as at 31st March, 2018 was: The prof

1.	The Balance Sheet of X, Y and Z as at 31st March, 2018 was: The profit-sharing ratio was 3 : 2 : 1. Z died on 31st July, 2018. The Partnership Deed provides that: (a) Goodwill is to be calculated on the basis of three years purchase of the five years average profit. The profits were : 2017-18: ₹ 24,000; 2016-15: ₹ 20,000; 2014-15: ₹ 10,000 and 2013-14: ₹ 5,000. (b) The deceased partner to be given share of profits till the date of death on the basis of profits for the previous year. (c) The Assets have been revalued as: Stock – ₹ 10,000; Debtors – ₹ 15,000; Furniture – ₹ 1,500; Plant and Machinery – ₹ 5,000; Building – ₹ 35,000. A Bill Receivable for ₹ 600 was found worthless. (d) A Sum of ₹ 12,233 was paid immediately to Z’s Executors and the balance to be paid in two equal annual installments together with interest @ 10% p.a. on the amount outstanding. Give journal entries and show the Z’s Executors Account till it is finally settled.
Answer» tion:1. Calculation of Goodwill Goodwill = ∴ Average Profit = 2. Adjustment of GoodwillZ died.Gaining Ratio Z's share of goodwill is to be DISTRIBUTED between X and Y in their 3 : 2 (Gaining ratio)3. Calculation of Z's Share of Profit Profit for past year = Rs 24, 000.

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