Important Questions - Death of a Partner - Accountancy Class 12 - Commerce

Q1. On 31st March 2025, the Balance Sheet of Punit, Rahul and Seema was as follows

They were sharing Profit and loss in the ratio 5:3:2.
 Seema died on October 1, 2025. It was agreed between her executors and the remaining partners that:
 i. Goodwill be valued at 2 years' purchase of the average profits of the previous five years, which were:
 2020-21: 30,000; 2021-22: 26,000; 2022-23: 24,000; 2023-24: 30,000 and 2024-25: 40,000.
 ii. Patents be valued at 16,000; Machinery at 56,000; Buildings at 60,000.
 iii. Profit for the year 2025-26 be taken as having been accrued at the same rate as that in the previous year.
 iv. Interest on capital be provided at 10% p.a.
 v. A sum of 15,500 was paid to her executors immediately.
 Prepare Revaluation Account, Seema's Capital Account and Seema's Executors Account. (6 Marks)

Q2. A, B and C are partners in a firm sharing profits in the ratio of 5 : 3 : 2 respectively. Their Balance
 The sheet as on 31st December, 2022, was as follows :

A died on 1st October, 2023, due to illness. It was agreed between the firm and A's executors that the amount due
 to A will be used for the construction of a Charitable Hospital in a village. As per the agreement :
 (i) Goodwill was valued at 2 years' purchase of average profits of last 4 years, which were : 2019 - Rs. 1,00,000; 2020 - Rs. 1,60,000; 2021 - Rs. 1,80,000
 ii) Patents were revalued at Rs. 90,000; Machinery at Rs. 2,80,000 and Building at Rs. 2,50,000.
 (iii) A's share of profit till the date of his death will be calculated on the basis of the profit of the year 2022.
 (iv) Interest on capital will be provided at 10% p.a.
 (v) Amount due to A's executors will be transferred to Charity Account.
Prepare a capital account to be presented to his executor. (6 Marks)

Q3. Nithya, Sathya and Mithya were partners sharing profits and losses in the ratio of 5:3:2. Their Balance
 The sheet as on December 31, 2022, was as follows :

Balance Sheet at December 31, 2022

Mithya dies on May 1, 2022. The agreement between the executors of Mithya and the partners stated that :
 (a) Goodwill of the firm is valued at 2 ½ times the average profits of the last four years. The profits of four
 years were: in 2018, Rs 13,000; in 2019, Rs 12,000; in 2020, Rs 16,000; and in 2021, Rs 15,000.
 (b) The patents are to be valued at Rs 8,000, Machinery at Rs 25,000 and Premises at Rs 25,000.
 (c) The share of profit of Mithya should be calculated on the basis of the profit of 2022.
(d) Provide interest @ 12% p.a. on capital. (8 Marks)