The Balance Sheet of X, Y and Z as at 31st March, 2020 was:

Bills Payable2,000Cash at Bank5,800
Employees’ Provident Fund5,000Bills Receivable800
Workmen Compensation Reserve6,000Stock9,000
General Reserve6,000Sundry Debtors16,000
Capital A/c :Plant and Machinery6,500
X – 22,750Building30,000
Y 15,250Advertising Suspense6,000
Z 12,00050,000 
 76,100 76,100

The profit-sharing ratio was 3: 2: 1. Z died on 31st July, 2020. The Partnership Deed provides that:
(a) Goodwill is to be calculated on the basis of three years’ purchase of the five years’ average profit. The profits were: 2020: Rs. 24,000; 2019: Rs. 16,000; 2018: Rs. 20,000 and 2017: Rs. 10,000 and 2016: Rs. 5,000.
(b) The deceased partner to be given share of profits till the date of death on the basis of profits for the previous year.
(c) The Assets have been revalued as: Stock Rs. 10,000; Debtors Rs. 15,000; Furniture Rs. 1,500; Plant and Machinery Rs. 5,000; Building Rs. 35,000. A Bill Receivable for Rs. 600 was found worthless.
(d) A Sum of Rs. 12,233 was paid immediately to Z’s Executors and the balance to be paid in two equal annual instalments together with interest @ 10% p.a. on the Amount outstanding.
Give Journal entries and show the Z’s Executors’ Account till it is finally settled.


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