# 12th | Ts grewal 2021-2022 Question 13 to 16 | Death of a partner

#### Page No 7.31:

Question 13: Hadha, lina and Reeta were partners sharing profits equally. Reeta died on 31st July, 2021. Radha and Tina decided to continue the business. Share of profit or loss of the deceased partner from the beginning of the year up to the date of death was to be determined on the basis of last year’s profit, which was 4,50,000.

Pass necessary Journal entry to record Reeta’s share of profit/loss up to the date of death.

 Date Particulars L.F. (Dr.) ` (Cr.) ` 2020 31st July Profit and Loss Suspense A/c   To Reeta’s Capital A/c  (Being profit transferred on the basis of last years profit) Dr. 50,000 50,000

Working Notes:

Hadha, lina and Reeta were partners sharing profits equally (1:1:1)

Reeta died on 31st July, 2021 after 4 month of beginning of the year (from 1 April 2021 to 31st July, 2021)

Last year’s profit = ` 4,50,000

Reeta’s share of Profit for 3 month = 4,50,000 × 4 × 1 ÷ 12 × 3 = ` 50,000

#### Page No 7.31:

Question 14: Manoj, Rakesh and Harsh were partners sharing profits in the ratio of 2:2:1. Manoj died on 30th June, 2021. Rakesh and Harsh decided to continue the business. Share of profit or loss of the deceased partner from the beginning of the year up to the date of death was to be determined on the basis of last year’s profit. Last year’s loss was ` 2,00,000.

Pass necessary Journal entry to record Manoj’s share of profit/loss up to the date of death

 Date Particulars L.F. (Dr.) ` (Cr.) ` 2020 31st July Manoj’s Capital A/c   To Profit and Loss Suspense A/c (Being profit transferred on the basis of last years loss) Dr. 20,000 20,000

Working Notes:

Manoj, Rakesh and Harsh were partners sharing profits (2:2:1)

Manoj died on 30th June, 2021 after 3 month of beginning of the year (from 1 April 2021 to 31st June, 2021)

Last year’s loss = ` 2,00,000

Reeta’s share of Loss for 3 month = 2,00,000 × 3 × 2 ÷ 12 × 5 = ` 20,000

#### Question 15:

X, Y and Z were partners in a firm. Z died on 31st May, 2020. His share of profit from the closure of the last accounting year till the date of death was to be calculated on the basis of the average of three completed years of before death. Profits for the year ended 31st March, 2018, 2019 and 2020 were `18,000, ` 19,000 and  ` 17,000 respectively.
Calculate Z's share of profit till his death and pass necessary Journal entry for the same when:
(a) there is no change in profit-sharing ratio of remaining partners, and
(b) there is change in profit-sharing ratio of remaining partners, new ratio being 3 : 2.

 Journal S.No. Particulars L.F. Debit ( `) Credit ( `) (a) Profit & Loss Suspense A/c Dr. 1,000 To Z’s Capital A/c 1,000 (Proportionate profit dispensed to deceased partner) (b) X’s Capital A/c Dr. 800 Y’s Capital A/c Dr. 200 To Z’s Capital A/c 1,000 (Proportionate profit dispensed to deceased partner)

Working Notes:

WN1: Calculation of Z’s Share of Profit

Z's share=Firm's Average Profit×Z's Profit Share×Period for which Z remained in the business

Average Profits=Total Profits Number of Years=18,000+19,000+17,000/3=54,000/3=` 18,000

Z's share=18,000×13×2/12=1,000 to be borne by gaining partners in gaining ratio in case b

WN2: Calculation of Gaining Ratio

Gaining Ratio = New Ratio − Old Ratio

X's gain=3/5−1/3=415

Y's gain=2/5−1/3=115

Gaining Ratio=4:1

X's share=18,000×4/5=800

Y's share=18,000×1/5=200

#### Page No 7.31:

Question 16: A, B and C were partners sharing profits and losses in the ratio of 2: 2:1. C died on 30th June, 2020. Profit and Sales for the year ended 31st March, 2020 were ` 1,00,000 and ` 10,00,000 respectively. Sales during April to June, 2020 were ` 1,50,000. You are required to calculate share of profit of C till the date of his death.

A, B and C were partners sharing profits (2:2:1)

C died on 30th June, 2021 after 3 month of beginning of the year (from 1 April 2021 to 31st June, 2021)

Profit for the year ended 31st March, 2020 were ` 1,00,000

Sales for the year ended 31st March, 2020 were ` 10,00,000

Percentage of Profit ended 31st March, 2020 were 10,00,000 × 100 ÷ 1,00,000 = 10 %

Sales during April to June, 2020 were ` 1,50,000

Profit from April to June, 2020 were ` 1,50,000 × 10 ÷ 100 = 15,000

C’s share of Loss for 3 month = 15,000 × 1 ÷ 5 = ` 3,000

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