Q. Puneet, Pankaj and Pammy are partners in a business sharing profits and losses in the ratio of 2 : 2 :1 respectively. Their balance sheet as on March 31, 2007 was as follow
Balance SheetDr as on March 31, 2007 CrCapital and LiabilitiesAmt.(Rs)AssetsAmt.(Rs)Sundry Creditors1,00,000Cash at Bank20,000Capital AccountsStock30,000Puneet60,000Sundry Debtors80,000Pankaj1,00,000Investments70,000Pammy40,000––––––––2,00,000Furniture35,000Reserve50,000Buildings1,15,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯3,50,000––––––––––––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯3,50,000––––––––––––––––––––
Mr Pammy died on September 30, 2007. The partnership deed piovided the following
(i) The deceased partner will be entitled to his share of profit up to the date of death calculated on the basis of previous year's profit.
(ii) He will be entitled to his share of goodwill of the firm calculated on the basis of 3 years' purchase of average of last 4 years profit. The profits for the last four financial years are given below for 2003-04; Rs. 80,000; for 2004-05, Rs. 50,000; for 2005-06, Rs. 40,000; for 2006-07, Rs. 30,000. The drawings of the deceased partner up to the date of death amounted to Rs. 10,000. Interest on capital is to be allowed at 12% per annum.
Surviving partners agreed that Rs. 15,400 should be paid to the executors immediately and the balance in four equal yearly instalments with interest at 12% pa on outstanding balance. Show Mr Pammy's capital account, his executor's account till the settlement of the amount due.