Anil, Vishal and Sunil are partners sharing profits and losses in the ratio of \(4 : 3 : 3\). Their capitals on 01.04.2025 are ₹ 1,00,000, ₹ 80,000 and ₹ 50,000 respectively.
Vishal died on 31.12.2025. The partnership deed provides the following :
a) Interest on capital at 12% per annum.
b) Salary to Vishal ₹ 2,000 per month.
c) Vishal's share of goodwill ₹ 14,000 [as per A.S. -- 26].
d) Vishal's share of accrued profit upto the date of death, based on previous year profit.
Firm's previous year profit was ₹ 36,000.
Prepare Vishal's Executors Account.
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Time calculation is the most critical step in death-of-a-partner questions. Count the months carefully from the Balance Sheet date to the date of death (April 1 to Dec 31 = exactly 9 months).
Step 1: Understanding the Concept:
When a partner dies, their legal representatives (executors) are entitled to the deceased partner's capital balance along with their share of profits, interest, salary, and goodwill calculated up to the exact date of death.
Step 2: Detailed Explanation:
Let us calculate the amounts payable to Vishal up to his date of death (31.12.2025).
The accounting year starts on 01.04.2025. Vishal survived for 9 months (April to December).
Vishal's profit-sharing ratio = \(\frac{3}{10}\). Calculations: 1. Opening Capital: ₹ 80,000. 2. Interest on Capital:
Interest = Capital \(\times\) Rate \(\times\) Time
\( = 80,000 \times \frac{12}{100} \times \frac{9}{12} = \text{₹ } 7,200 \). 3. Salary:
Salary per month = ₹ 2,000.
Salary for 9 months = \(2,000 \times 9 = \text{₹ } 18,000 \). 4. Share of Goodwill:
Already calculated and given as ₹ 14,000. 5. Share of Accrued Profit:
Based on the previous year's profit (₹ 36,000).
Estimated Profit for 9 months = \(36,000 \times \frac{9}{12} = \text{₹ } 27,000\).
Vishal's Share = \(27,000 \times \frac{3}{10} = \text{₹ } 8,100\).
*(Alternatively: \(36,000 \times \frac{3}{10} \times \frac{9}{12} = \text{₹ } 8,100\)).*
All these amounts are due to Vishal and will be credited to his Capital Account, which is then transferred to his Executor's Account.
