Question

Alisha, Bobby, and Pooja were partners in a firm sharing profits and losses in the ratio of \( 5 : 3 : 2 \). Pooja died on 30\textsuperscript{th September, 2023. Pooja’s share in the profits of the firm till the date of death was to be calculated on the basis of sales. Sales during the year 2022–23 were ₹ 30,00,000, and sales from 1\textsuperscript{st} April, 2023, to 30\textsuperscript{th} September, 2023, were ₹ 10,00,000. The profit for the year ended 31\textsuperscript{st} March, 2023, was ₹ 3,00,000.} Calculate Pooja’s share of profit up to the date of death and pass the necessary journal entry for the same in the books of the firm.

Hint:

When calculating a deceased partner’s share of profit, always use the proportionate sales or time basis as specified in the question.

Answer 1

To determine Pooja’s profit share, profit is allocated proportionally to sales. The profit for sales of ₹ 10,00,000 is calculated as follows: \[ \text{Profit for Sales of ₹ 10,00,000} = \frac{\text{Profit for ₹ 30,00,000 Sales}}{\text{Total Sales}} \times \text{Relevant Sales}. \] Substituting the given values: \[ \text{Profit for ₹ 10,00,000 Sales} = \frac{₹ 3,00,000}{₹ 30,00,000} \times ₹ 10,00,000 = ₹ 1,00,000. \] Pooja’s profit share is determined using the profit-sharing ratio of \( 5 : 3 : 2 \). Her share is calculated as: \[ \text{Pooja’s Share of Profit} = ₹ 1,00,000 \times \frac{2}{10} = ₹ 20,000. \] Journal Entry: \begin{center} \begin{tabular}{|l|c|c|} \hline Particulars & Dr Amount (₹) & Cr Amount (₹) \hline Profit and Loss Suspense A/c Dr & 20,000 & To Pooja’s Capital A/c & & 20,000 \hline \end{tabular} \end{center}