Question

A, B and C were partners sharing profits and losses in the ratio of 2 : 2 : 1. C died on 30th June, 2025. Profit and Sales for the year ended 31st March, 2025 were ₹ 1,00,000 and ₹ 10,00,000 respectively. Sales during April to June, 2025 were 1,50,000.

You are required to calculate share of profit of C till the date of his death.

Answer 1

Calculation of Profit Percentage to Sales (based on previous year’s data):

Profit Percentage = `"Previous Year’s Profit"/"Previous Year’s Sales" xx 100`

Profit Percentage = `(1,00,000)/(10,00,000) xx 100`

= 10%

Calculation of Estimated Profit for the Intervening Period (April to June, 2025):

Sales during April to June, 2025 = ₹ 1,50,000

Estimated Profit = Sales for the period × Profit Percentage

Estimated Profit = 1,50,000 × 10%

= 15,000

Calculation of C’s Share of Profit:

Old Profit-Sharing Ratio (A : B : C) = 2 : 2 : 1

C’s share proportion = `1/5`

C’s share proportion = `15,000 xx 1/5`

C’s share of profit till the date of his death = 3,000