Pia, Sia and Jiya are partners in a firm sharing profits and losses in the ratio of 3:2:1. Pia died on 31st October, 2021. Her capital as on 1st April, 2021, was ₹24,000 and her share of profit for the year 2021-22 till the date of her death, was ascertained as ₹2,000.
Additional information:
(i) Office Equipment of the firm, the book value of which was ₹10,000 on 1st April, 2021, was revalued on the date of Pia’s death at ₹13,600. (ii) The amount of ₹35,000 due to Pia’s executor in full settlement of the claim, was transferred to her executor’s loan account.
You are required to prepare Pia’s capital account to be rendered to her executor.
OR
Vinay, Tarun and Arjun are partners in a firm sharing profits and losses in the ratio of 4:3:2 respectively. On Tarun’s retirement from the firm on 1* April, 2022, his capital account, after all adjustments, stood at ₹1,14,000. The partners decided that:
(i) Tarun to be paid 50% of the amount due to him immediately and the balance by - accepting a Bill of Exchange (without interest) payable at the expiry of 3 months. (ii) The continuing partners to re-adjust their capitals in their new: profit-sharing ratio - in. the reconstituted firm. Any surplus / deficit in their capital accounts to be adjusted through their current accounts.
Upon re-adjustment of their capitals, Vinay’s capital showed a deficit of = 1,000 while Arjun’s capital had a surplus of ₹1,000.
You are required to pass journal entries to record:
(i) The closing of the retiring partner’s capital account. (ii) Adjustment of surplus / deficit in the capital accounts of the continuing partners.
,
,