10. Priya Riya and Siya are partners sharing profits in the ratio of 4:3:1 respectivey. It is provided in the partnership deed that on the death of any partner, her share of goodwil was to be valued at half of the profits crdited to her account during the four previous completed years.
Riya died on 1st January 2012. The firm's profits for the last four years were: 2008 2009 Rs. 1,20,000, 2009 Rs. 80,000, 2010 Rs. 40,000 and 2011 Rs. 80,000. Determine the amount that should be credited to Riya in respect of her share of goodwill. On the date of Riya's death, one of the old debtor whose account was cosed last year by transferring his debt amounting to Rs. 8,000 to bad debts account, has now promised to pay the amount fully.
Pass the necessary Journal entries for the above mentioned transactions at the time of Riya's death.
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