12th | Death of a Partner | Question No. 21 To 25 | Ts Grewal Solution 2025-2026

Raman, Param and Karan were partners sharing profits and losses in the ratio of 3:2:1. Param died on 31st December, 2024. Accounts of the firm are closed on 31st March every year. Sales for the year ended 31st March, 2024 was  ₹ 12,00,000 and sales for the nine months ended 31st December, 2024 was  ₹ 6,00,000.

Loss for the year ended 31st March, 2024 was  ₹ 90,000. Calculate deceased partner’s share of profit/loss from the beginning of the accounting year up to 31st December, 2024.

 

Answer:

Date	Particulars		L.F.	(Dr.)  ₹	(Cr.)  ₹
2024 31st Dec.	Param’s Capital A/c To Profit and Loss Suspense A/c (Being loss transferred)	Dr.		15,000	15,000

Working Notes:

Sales for the year ended 31st March, 2024 was  ₹ 12,00,000

Loss for the year ended 31st March, 2024 was  ₹ 90,000

Percentage of Loss for the year ended 31st March, 2024 was 90,000 × 100 ÷ 12,00,000 = 7.5 %

Sales for the nine months ended 31st December, 2024 was  ₹ 6,00,000.

Param’s share of Loss for the nine months ended 31st December, 2024 was  ₹ 6,00,000 × 7.5 ÷ 100 = 15,000

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

 

Answer:

Date	Particulars		L.F.	(Dr.)  ₹	(Cr.)  ₹
2024 30st Sep.	Bikram’s Capital A/c (WN-1) To Profit and Loss Suspense A/c (Being loss transferred)	Dr.		1,20,000	1,20,000
30st Sep.	Profit and Loss Suspense A/c (WN-2) To Akhil’s Capital A/c To Charu’s Capital A/c (Being loss transferred)			1,20,000	36,000 84,000
	Or (Alternative Journal Entry)
30st Sep.	Bikram’s Capital A/c (WN-1) To Akhil’s Capital A/c (WN-2) To Charu’s Capital A/c (WN-2) (Being loss transferred)	Dr.		1,20,000	36,000 84,000

 

Working notes:

WN-1

Loss from the beginning of the accounting year till the date of death was estimated at  ₹ 3,60,000

Bikram’s Share of Loss till the beginning of the accounting year till the date of death  ₹ 3,60,000 × 2/6 = 1,20,000

WN-2

Old share of Akhil is 3/6 and Charu is 1/6

Akhil and Charu New share future profits in the ratio of 3:2 w.e.f. 1st October, 2023.

Akhil = 3/6 - 3/5= 15-18/30=-3/30 (Gain)

Charu = 1/6 - 2/5= 5-12/30= -7/30 (Gain)

Gaining ratio of Akhil and Charu is 3:7

Akhinl = 1,20,000 × 3/10 = 36,000

Charu = 1,20,000 × 7/10 = 84,000

 

Abha, Beena and Chanda were partners in a firm sharing profts and losses in the ratio of 5 : 3 :2. Abha died on 1st July, 2025. The Partnership Deed provided that Abha's executors are entitled to her share of profit till the date of death calculated on the basis of sales for the immediate previous year. Sales for the year ended 31st March, 2025 was Rs. 12,00,000 and the profit for the same year was 3,00,000. Sales shows a growth trend of 20% and percentage of profit earning remains the same.

Journalise the transaction along with working notes.

Answer:

Date	Particulars		Dr. ( ₹)	Cr. ( ₹)
	Abha's Capital A/c		45,000
	ToProfit & Loss Suspense A/c			45,000
	(Being Capital Written-off with the share of loss)

 

Working Note:

Profit 3,00,000 Grows as Sales shows a growth trend of 20% =

Profit for the current year =3,00,000×120/100=3,60,000

Abha’s share of profit for 3 Month =3,60,000×3/12×5/10=45,000

 

X, Y and Z were partners in a firm sharing profits in the ratio of 4 : 3 : 1. The firm closes its books on 31st March every year. On 1st February, 2025.Y died and it was decided that the new profit-sharing ratio between X and Z will be equal. Partnership Deed provided for the following on the death of a partner:
(a) His share of goodwill be calculated on the basis of half of the profits credited to his account during the previous four completed years. The firm's profits for the last four years were:

Year	2021	2022	2023	2024
Profits (  ₹)	1,50,000	1,00,000	50,000	1,00,000

(b) His share of profit in the year of his death was to be computed on the basis of average profit of past two years.
Pass necessary Journal entries relating to goodwill and profit to be transferred to Y's Capital Account.

 

Answer:

Journal
Date	Particulars		L.F.	Debit  (  ₹)	Credit  (  ₹)
2025
Feb 1	Z’s Capital A/c	Dr.		75,000
	To Y’s Capital A/c				75,000
	(Adjustment of Y’s share of Goodwill )
Feb 1	Z’s Capital A/c	Dr.		23,438
	To Y’s Capital A/c				23,438
	(Adjustment of Y’s share of Profit)

 

Working Notes:

WN1:Calculation of Gaining Ratio

X :Y :Z=4:3:1(Old ratio)

X :Z=1:1(New ratio)

Gaining Ratio = New Ratio - Old Ratio

X's Gain=1/2−4/8=4−4/8=0

Z's Gain=1/2−1/8=4−1/8=3/8

X:Z=0:3

WN2: Calculation of Retiring Partner’s Share of Goodwill
Y's share of goodwill=4,00,000×3/8×1/2= ₹ 75,000

Y's share of goodwill will be brought by Z only.

WN3: Calculation of Retiring Partner’s Share of Profit

Y's share of profit=75,000×3/8×10/12= ₹ 23,438

Average profit for last two years= ₹ 75,000

Pass necessary Journal entries for the above transactions in the books of the firm. (CBSE 2020)

 

Answer:            

Date	Particulars		L.F.	(Dr.)  ₹	(Cr.)  ₹
	Saleem’s capital A/c Raheem’s capital A/c To Kareem’s capital A/c (Being Kareem’s Sacrifice compensated)	Dr. Dr. Dr.		60,000 45,000	1,05,000
	P&L SuspenseA/c To Kareem’s capital A/c (Being Profit transferred to capital accounts till the date death)	Dr.		22,500	22,500
	Kareem’s capital A/c To Kareem’s Executor’s A/c  (Being Kareem’s capital A/c has been transferredKareem’s Executor’s A/c)	Dr.		7,35,000	7,35,000

 

Working notes:

WN-1 Calculation of goodwill

The goodwill of the firm was valued at  ₹ 3,50,000

Karim’s Share of Goodwill = 3,50,000×3/10 =  ₹ 1,05,000

Goodwill Share of Karim is in Goodwill will be compensated by Saleem and Raheem in 4:3

Saleem = 1,05,000× 4/7 = 60,000

Raheem = 1,05,000× 3/7 = 45,000

 

WN-2 Karim’s share of Profit till the date of death

The average profits = 1,70,000+1,30,000+1,90,000 +1,10,000/4=1,50,000

Karim’s share of Profit =  ₹ 1,50,000×3×6/10×12=22,500