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Sandeep, Maheep… (Class 12 Accountancy SQP 2023-24, Q25)

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AccountancyCBSE Class 12 · Sample paper, session 2023-24 · 6 marks · Long answer

CBSE Class 12 Accountancy sample paper 2023-24: question 25

From the official CBSE sample question paper for 2023-24, section A, question 25, for 6 marks. Try it first; the hints and our step-by-step solution are below.

Q25 · 6 marks · Long answerReconstitution of a Partnership Firm – Retirement/Death of a Partner

Sandeep, Maheep and Amandeep were partners in a firm sharing profits in the ratio of 2: 2: 1. The firm closes its books on 31st March every year. On 30th June, 2020 Maheep died. The partnership deed provided that on the death of a partner his executors will be entitled to the following:
a) Balance in his capital account which amounted to ₹1,15,000 and interest on capital till date of death which amounted to ₹5,000.
b) His share in the profits of the firm till the date of his death amounted to ₹20,000.
c) His share in the goodwill of the firm. The goodwill of the firm on Maheep's death was valued at ₹1,50,000.
d) Loan to Maheep amounted ₹20,000.
It was agreed that the amount will be paid to his executor in three equal yearly instalments with interest @10% p.a. The first instalment was to be paid on 30.06.2021.

Calculate the amount to be transferred to Maheep's executors Account and prepare the executor's account till it is finally settled.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2023-24.

Hints

Open one hint at a time and try again before the next.

Hint 1

Goodwill share is 2/5; the loan taken by Maheep is deducted.

Hint 2

Interest runs from the date of death and is split at each 31st March year end.

Hint 3

Each instalment = ₹ 60,000 + one year's interest on the opening principal.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Amount due to the executors. Capital ₹ 1,15,000 + interest on capital ₹ 5,000 + profit share ₹ 20,000 + goodwill 2/5 × ₹ 1,50,000 = ₹ 60,000, less loan to Maheep ₹ 20,000 = ₹ 1,80,000. Each instalment repays ₹ 60,000 of principal plus interest at 10% p.a.

    2 marks

  2. Maheep's Executors Account

    Particulars₹Particulars₹
    31.03.2021 To Balance c/d1,93,50030.06.2020 By Maheep's Capital A/c1,80,000
    31.03.2021 By Interest A/c (9 months)13,500
    1,93,5001,93,500
    30.06.2021 To Bank A/c (1st instalment)78,00001.04.2021 By Balance b/d1,93,500
    31.03.2022 To Balance c/d1,29,00030.06.2021 By Interest A/c (3 months)4,500
    31.03.2022 By Interest A/c (9 months)9,000
    2,07,0002,07,000
    30.06.2022 To Bank A/c (2nd instalment)72,00001.04.2022 By Balance b/d1,29,000
    31.03.2023 To Balance c/d64,50030.06.2022 By Interest A/c (3 months)3,000
    31.03.2023 By Interest A/c (9 months)4,500
    1,36,5001,36,500
    30.06.2023 To Bank A/c (3rd instalment)66,00001.04.2023 By Balance b/d64,500
    30.06.2023 By Interest A/c (3 months)1,500
    66,00066,000

    Instalments: ₹ 60,000 + interest on ₹ 1,80,000 for a year (₹ 18,000) = ₹ 78,000; ₹ 60,000 + ₹ 12,000 = ₹ 72,000; ₹ 60,000 + ₹ 6,000 = ₹ 66,000.

    4 marks

Answer: Amount transferred ₹ 1,80,000; instalments ₹ 78,000 (30.06.2021), ₹ 72,000 (30.06.2022) and ₹ 66,000 (30.06.2023), closing the account

Where the marks are

  • Amount due ₹ 1,80,000 (2 marks)
  • Executors account with interest split at 31st March each year (4 marks)

Revise the chapter

Practise this chapterBoard-style questions from Reconstitution of a Partnership Firm – Retirement/Death of a Partner, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2023-24: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.