Question

Zaina, Yash and Kiran were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Zaina died on 1st July, 2024. As per the partnership deed, Zaina’s share of profit or loss till the date of her death was to be calculated on the basis of sales. Sales for the year ended 31st March, 2024 amounted to ₹ 4,00,000 and that from 1st April to 30th June, 2024 was ₹ 1,50,000. The profit for the year ending 31st March, 2024 was ₹ 1,00,000. Calculate Zaina’s share of profit in the firm till the date of her death and pass necessary journal entry for the same.

Hint:

If profit is to be based on sales, apply a simple sales ratio to yearly profit, then distribute as per old ratio.

Answer 1

Step 1: Calculate proportionate profit.
Profit is to be calculated based on sales. \[ \text{Profit for the year} = ₹ 1,00,000,\ \text{Annual Sales} = ₹ 4,00,000 \] \[ \text{Sales till 30th June 2024} = ₹ 1,50,000 \] \[ \text{Profit till death} = \frac{1,50,000}{4,00,000} \times 1,00,000 = ₹ 37,500 \] Step 2: Find Zaina’s share (2/5). \[ \text{Zaina’s share} = \frac{2}{5} \times ₹ 37,500 = ₹ 15,000 \] Journal Entry: \[ \text{Profit and Loss Suspense A/c Dr. ₹ 15,000}
\text{To Zaina’s Capital A/c ₹ 15,000} \]