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Solution - Retirement and Death of a Partner - Effect of Retirement I Death of a Partner on Change in Profit Sharing Ratio

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Geeta, Sita and Meeta were partners in a firm sharing profits in the ratio of 5:3:2. The firm closes its books on 31st March every year. On 30-6-2015 Geeta died. On that date her capital account showed a debit balance of Rs.5,000 and Goodwill of the firm was valued at Rs.3,70,000. There was a debit balance of Rs.12,000 in the profit and loss account. Geeta's share of profit in the year of her death was to be calculated on the basis of the average profit of last 5 years which was Rs.80,000.

Pass necessary journal entries in the books of the firm on Geeta's death.

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X, Y and Z are partners sharing profit in ratio of 1/2, 2/5, and 1/10. Find the new ratio of remaining partners if Z retires.

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