Question - 43 

A, B and C are partners in a firm sharing profit in the ratio of 2:1:1 respectively their balance sheet was as ahead on 31st Dec., 2017:

Liabilities : Creditors Rs. 4,000, A's Capital Rs. 10,000, B's Capial Rs. 6,000, C's Capital Rs. 4,000.

Assets : Cash Rs. 1,000, Debtors Rs. 4,500, Closing Stock Rs. 5,500, A's loan Rs. 3,000, Freehold properties Rs. 10,000.

A died on 1st Jan., 2018 firm had a joint Life policy of Rs. 10,000 Insurance money was received on 3rd Jan., 2018 According to hte partnership deed, on the retirement or death of a partner goodwill is to be valued at two years purchase ofhte average profit of last three years profit. Profit for 2015, 2016 and 2017 were Rs. 5,500; Rs. 4,800; and Rs. 6,500 respectively the amount of capital and goodwill due to deceased partner was paid off on 1st Feb., 2018 the deficit of cash was received from bank as a loan on the mortgage of assets.

Prepare partners capital account and Balance Sheet of B and C after payment was made ot A's representative.

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