Question

Piyush, Aadi, and Sudha were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 3. Aadi died on 1st October, 2024. As per the partnership deed, Aadi’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 ₹ 6,00,000, and those from 1st April to 30th September, 2024, amounted to ₹ 2,00,000. The profit for the year ending 31st March, 2024, was calculated as ₹ 1,50,000. The books of accounts are closed on 31st March every year. Calculate Aadi’s share of profits in the firm and pass the necessary journal entries for the same. Show your working clearly.

Answer 1

Sales for the year ended 31st March, 2024 = ₹ 6,00,000

Profit for the year ended 31st March, 2024 = ₹ 1,50,000

Sales from 1st April, 2024 to 30th September, 2024 = ₹ 2,00,000

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

= `(1,50,000)/(6,00,000) xx 100`

= 25%

Profit upto Aadi’s Death (30th Sep., 2024) = 25% of ₹ 2,00,000 = ₹ 50,000

Aadi’s share of Profit = `50,000 xx 3/10`

= ₹ 15,000

Journal
Date	Particulars	L.F.	Amount (₹)	Amount (₹)
2024 Oct. 1	Profit and Loss Suspense A/c   ...Dr.		15,000	−
	To Aadi’s Capital A/c		−	15,000
	(Being Aadi’s share of profit till the date of death credited to his capital account)