20 :- Ajay, Bhawna and Shreya were partners sharing profits in the ratio of 2:2:1. On 1st July, 2024, Shreya died. The books of accounts are closed on 31st March, every year. Sales for the year 2023-24 Rs 5,00,000 and that from 1st April to 30th June,2024 were Rs 1,40,000. Rate of profit during the past three years had been 10% on sales. Since Shreya’s legal representative was her only son, who is differently abled, it was decided that the profit for the purpose of setting Shreya’s account is to be calculated as 20% on sales.
Calculate Shreya’s share of profits till the date of her death and pass necessary journal entries for the same.
Solution :-
WORKING NOTES :–
(i) Calculation of Shreya’s share of profit
Profit on sales from 1st April to 30th June = Rs 1,40,000 x 20% = Rs 28,000
Shreya’s share of profit till his death = Rs 28,000 x 1/5 = Rs 5,600