Question - 42

On 1-4-2012 A, B and C are partners sharing profits and losses in the ratio of 3:2:1 They had a joint life policy of Rs. 1,20,000 and the annual premium of Rs. 8,000 has been charge to profit and loss A/c every year accounts are closed on 31st march annually. C died on 1st August 2012 Besides his capital and insurance money C's legal representative are entitled to :

  1. Interest on capital at 10% per annual up to the date of death.
  2. Partner's share in profit based on the average profit of the last four copleted years.
  3. Partenr's share in goodwill which is to be calculated at three year's purchase of the everage profit of the last four year. C's capital on 1st April, 2012 stood at Rs. 1,80,000 and his drawing from that date to the death amuonted ot Rs. 11,000 profit and loss for the last four years were Rs. 30,000, Rs. 56,000; Rs. 10,000 (Loss) and Rs. 68,000.
Prepare C's Legal representative's Account.

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