Question

Which of the following Journal entries will be passed for the deceased partner’s share in profit from the date of the last Balance Sheet till the date of death calculated based on the net profit of the previous year, if their profit-sharing ratio do not change:

Options

• Deceased Partner’s Capital A/с   ...Dr.

     To Profit & Loss A/c

• Deceased Partner’s Capital A/с   ...Dr.

     To Profit & Loss Suspense A/c

• Profit & Loss A/c   ...Dr.

     To Deceased Partner’s Capital A/c

• Profit & Loss Suspense A/c   ...Dr.

     To Deceased Partner’s Capital A/c

Answer 1

Profit & Loss Suspense A/c   ...Dr.

   To Deceased Partner’s Capital A/c

Explanation:

The partner’s share from the last balance‑sheet to the date of death is an estimated/interim profit, so it’s booked to the suspense (interim) account and credited to the deceased partner’s capital (amount due to estate). If it’s an estimated loss, reverse the entry (deceased’s capital Dr. To Profit & Loss Suspense).