Question

X, Y and Z were partners sharing profits and losses in the ratio of 3 : 2 : 1. Y died on 30th June, 2025. Profit from 1st April, 2025 to 30th June, 2018 was ₹ 3,60,000. X and Z decided to share the future profits in the ratio of 3 : 2 with effect  from 1st July, 2025.

Pass the necessary journal entries to record Y’s share of profit up to the date of death.

Answer 1

Journal Entry
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
	X’s Capital A/c   ...Dr.		36,000	-
	Z’s Capital A/c   ...Dr.		84,000	-
	To Y’s Capital A/c		-	1,20,000
	(Being proportionate profit dispensed to deceased partner)

Working Notes:

1: Calculation of Y’s Share of Profit

`"Y's share" = "Firms profit" xx "Y's profit share"`

`"Y's share" = 3,60,000 xx 2/6 = 1,20,000` (to be borne by gaining partners in gaining ratio)

2: Calculation of Gaining Ratio
Gaining Ratio = New Ratio − Old Ratio

`"X's gain" = 3/5 - 3/6 = 3/30`

`"Z's gain" = 2/5 - 1/6 = 7/30`

`"Gaining ratio" = 3 : 7`

`"X's share" = 1,20,000 xx 3/10 = 36,000`

`"Z's share" = 1,20,000 xx 7/10 = 84,000`