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X, Y and Z were partners in a firm sharing profit in 3 : 2 : 1 ratio. The firm closes its books on 31st March every year. Y died on 30th June, 2018. On Y’s death the goodwill of the firm was valued at ₹60,000. Y’s share in the profits of the firm till the time of his death was to be calculated on the basis of previous year’s profit which was ₹ 1,50,000. Pass necessary journal entries for the treatment of goodwill and Y’s share of profit at the time of his death. |
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Answer» tion of Y's Share of Goodwill :Goodwill of the Firm= Rs 60,000Y's Share of Goodwill = 60,000 × = Rs 20,00020,000 will be debited to X's & Z's CAPITAL A/c in gaining ratio of 3 : 1X will pay = 20,000 × = Rs 15,000Z will pay = 20,000 × = Rs 5,000 Calculation of Y's Share of Profit PREVIOUS YEAR's Profit = Rs 1,50,000Y's share of Profit (TILL death) = Previous Year's Profit × Y's Profit Share × 3 months (April 01, 2017 till June 30, 2017)Y's share of Profit (till death) = 1,50,000 × 26 × = Rs 12,500 |
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