Question

Manoj, Rakesh and Harsh were partners sharing profits in the ratio of 2 : 2 : 1. Manoj died on 30th June, 2025. Rakesh and Harsh decided to continue the business. Share of profit or loss of the deceased partner from the beginning of the year up to the date of death was to be determined on the basis of last year’s profit. Last year’s loss was 2,00,000.

Pass the necessary journal entry to record Manoj’s share of profit/loss up to the date of death.

Answer 1

Journal Entry
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
2025 June 30	Manoj’s Capital A/c ...Dr.		20,000	-
	To Profit & Loss Suspense A/c		-	20,000
	(Being Manoj’s share of estimated loss up to his date of death debited to his capital account)

Working Notes:

Last year’s performance = ₹ 2,00,000 (Loss)

Old Profit-Sharing Ratio (Manoj : Rakesh : Harsh) = 2 : 2 : 1

Manoj’s share proportion = `2/3`

Firm’s Loss for 3 months = `2,00,000 xx 3/12`

= 50,000

Manoj’s Share of Loss = `50,000 xx 2/5`

= 20,000