Ram, Manohar and Joshi were partners in a firm. Joshi died on 31st May, 2018. 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 financial years of profits before death. Profits for the years ended 31st March, 2016, 2017 and 2018 were ₹ 7,000; ₹ 8,000 and ₹ 9,000 respectively. Calculate Joshi's share of profit till the date of his death and pass necessary Journal entry for the same.

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Solution

Joshi’s Profit Share (from April 01, 2018 to May 31, 2018)

Journal

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

Profit and Loss Suspense A/c

Dr.

444

To Joshi’s Capital A/c

444

(Joshi’s profit share credited to his capital account)

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Journal
Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
Profit and Loss Suspense A/c	Dr.		444
To Joshi’s Capital A/c				444
(Joshi’s profit share credited to his capital account)

Joshi’s Profit Share (from April 01, 2018 to May 31, 2018) Journal Particulars L.F. Debit Amount Rs Credit Amount Rs Profit and Loss Suspense A/c Dr. 444 To Joshi’s Capital A/c 444 (Joshi’s profit share credited to his capital account)

Joshi’s Profit Share (from April 01, 2018 to May 31, 2018)

Journal

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

Profit and Loss Suspense A/c

Dr.

444

To Joshi’s Capital A/c

444

(Joshi’s profit share credited to his capital account)