23 :- Abha, Beena and Chanda were partners in a firm sharing profits 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 Rs 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.
Solution :-
WORKING NOTES :
(i) Calculation of Abha’s share of profit
Sales for the previous year = Rs 12,00,000
Profit of previous year = Rs 3,00,000
% of profit with respect to sales = 3,00,000/12,00,000 x 100
= 25%
Sales for the current year = 12,00,000 + 12,00,000 x 20%
= 12,00,000 + 2,40,000
= Rs 14,40,000
Sales from 1st April to 30th june = 14,40,000 x 3/12
= Rs 3,60,000
Profit from 1st April to 30th june = 3,60,000 x 25%
= Rs 90,000
Abha’s share in profit = 90,000 x 5/10 = Rs 45,000