Question 21:

Raman, Param and Karan were partners sharing profits and losses in the ratio of 3:2:1. Param died on 31st December, 2025. Accounts of the firm are closed on 31st March every year. Sales for the year ended 31st March, 2025 was  ₹ 12,00,000 and sales for the nine months ended 31st December, 2025 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, 2025.

 

Answer:

Working Notes:

Sales for the year ended 31st March, 2025 was  ₹ 12,00,000

Loss for the year ended 31st March, 2025 was  ₹ 90,000

Percentage of Loss for the year ended 31st March, 2025 was 90,000 × 100 ÷ 12,00,000 = 7.5 %

Sales for the nine months ended 31st December, 2025 was  ₹ 6,00,000.

Param’s share of Loss for the nine months ended 31st December, 2025 was  ₹ 6,00,000 × 7.5 ÷ 100 = 15,000

Question 22:

Akhil, Bikram and Charu were partners sharing profits and losses in the ratio of 3:2:1. Bikram died on 30th September, 2025. Loss from the beginning of the accounting year till the date of death was estimated at  ₹ 3,60,000. Akhil and Charu decided to share future profits in the ratio of 3:2 w.e.f. 1st October, 2025.

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

 

Answer:

 

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, 2025.

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

 

Question 23:

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:

 

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

 

Question 24:

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, 2026.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:

(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:

 

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

Question 25:

Karim, Saleem and Raheem were partners in a firm sharing profits and losses in the ratio of 3:4:3. The firm closes its books on 31st March every year. On 1st October, 2019, Karim died. On Karim’s death, the goodwill of the firm was valued at  ₹3,50,000. Karim’s share in the profits of the firm in the year of his death was to be calculated on the basis of average profits of last four years. The profits for the last four years were 2015-16-  ₹1,70,000; 2016-17-  ₹1,30,000;2017-18-  ₹1,90,000 and 2018-19-  ₹1,10,000. The total amount payable to Karim’s executors on his death was  ₹7,35,000. It was paid on 15th October, 2019.

Pass necessary Journal entries for the above transactions in the books of the firm.

(CBSE 2020)

 

Answer:            

 

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