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Ajay, Bhawna and Shreya were partners sharing profits in the ratio of 2 : 2 : 1. On 1st July, 2024, Shreya died. The books of account are closed on 31st March every year. Sales for the year 2023-24 were ₹5,00,000, and sales from 1st April to 30th June, 2024 were ₹1,40,000. The rate of profit during the past three years had been 10% on sales. Since Shreya’s legal representative was her only son, who is specially abled, it was decided that the profit for the purpose of settling Shreya’s account is to be calculated at 20% on sales. Calculate Shreya’s share of profit till the date of her death and pass the necessary Journal entry. (CBSE 2018 C, Modified)
Profit for 1st April to 30th June, 2024, calculated at 20% on sales for settlement purposes = 1,40,000 × 20/100 = ₹28,000.
Shreya’s share of profit = 28,000 × 1/5 = ₹5,600.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| 2024 Jul 1 | Profit & Loss Suspense A/c Dr. | 5,600 | ||
| To Shreya’s Capital A/c | 5,600 | |||
| (Shreya’s share of profit, computed at the special rate of 20% on sales, credited to her Capital Account) |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Chapter 6 Q.20 - Death of a Partner", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 6 - Death of a Partner.
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