Question

X, Y and Z were partners sharing profits and losses in the ratio of 3 : 2 : 1. Y died on 30th June, 2018. Profit from 1st April, 2018 to 30th June, 2018 was ₹ 3,60,000. X and Z decided to share the future profits in the ratio of 3 : 2 respectively with effect from 1st July, 2018. Pass the necessary Journal entries to record Y's share of profit up to the date of death.

Answer 1

Journal
S.No.	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	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
	(Proportionate profit dispensed to deceased partner)

Working Notes:
WN1: Calculation of Y’s Share of Profit

$\begin{array}{l}\mathrm{Y}\text{'}\mathrm{s}\mathrm{share}=\mathrm{Firm}\text{'}\mathrm{s}\mathrm{Profit}\times \mathrm{Y}\text{'}\mathrm{s}\mathrm{Profit}\mathrm{Share}\\ \mathrm{Y}\text{'}\mathrm{s}\mathrm{share}=3,60,000\times \frac{2}{6}=1,20,000\left(\mathrm{to}\mathrm{be}\mathrm{borne}\mathrm{by}\mathrm{gaining}\mathrm{partners}\mathrm{in}\mathrm{gaining}\mathrm{ratio}\right)\end{array}$

WN2: Calculation of Gaining Ratio

Gaining Ratio = New Ratio − Old Ratio

$$\begin{gathered} \begin{array}{l}\mathrm{X}\text{'}\mathrm{s}\mathrm{gain}=\frac{3}{5}-\frac{3}{6}=\frac{3}{30}\\ \mathrm{Z}\text{'}\mathrm{s}\mathrm{gain}=\frac{2}{5}-\frac{1}{6}=\frac{7}{30}\\ \mathrm{Gaining}\mathrm{Ratio}=3:7\end{array} \\ \begin{array}{l}\mathrm{X}\text{'}\mathrm{s}\mathrm{share}=1,20,000\times \frac{3}{10}=36,000\\ \mathrm{Z}\text{'}\mathrm{s}\mathrm{share}=1,20,000\times \frac{7}{10}=84,000\end{array} \end{gathered}$$