Question

Saurabh, Reena, and Deepak were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. Saurabh died on 31st December, 2024. As per the partnership deed, Saurabh’s share of profit or loss till the date of death was to be calculated on the basis of sales. Sales for the year ended 31st March, 2024, amounted to ₹ 10,00,000, and those from 1st April, 2024, to 31st December, 2024, amounted to ₹ 7,50,000.

The profit for the year ending 31st March, 2024, was calculated as ₹ 5,00,000. The books of accounts are closed on 31st March every year. Calculate Saurabh’s share in the profit of the firm till the date of his death.

Answer 1

Sales for the year ended 31st March, 2024 = ₹ 10,00,000

Profit for the year ended 31st March, 2024 = ₹ 5,00,000

Sales from 1st April, 2024 to 31st December, 2024 = ₹ 7,50,000

Rate of Profit to sales = `"Profit"/"Sales" xx 100`

= `(5,00,000)/(10,00,000) xx 100`

= 50%

Profit upto Saurabh’s Death (31st Dec., 2024) = `50/100 xx 7,50,000`

= 3,75,000

Saurabh’s Share of Profit = `3,75,000 xx 5/10`

= ₹ 1,87,500

Journal Entry
Date	Particulars	L.F.	Amount (₹)	Amount (₹)
2024 Dec. 31	Profit and Loss Suspense A/c   Dr.		1,87,500	−
	To Saurabh’s Capital A/c		−	1,87,500
	(Being Saurabh’s share of profit till the date of death credited to his capital account)