13 :- Ram, Manu and Hari were partners in a firm. Hari died on 30th June, 2024. His share of profits from the closure of the last accounting year till the date of death was to be calculated on the basis of the average of three completed financial years of profits before death. Profits for the years ended 31st March 2022,2023 and 2024 were Rs 1,10,000; Rs 1,20,000 and Rs 1,30,000 respectively.
Calculate Hari’s share of profit till the date of his death and pass necessary Journal entry for the same.
Solution :-
Calculation of Hari’s share in profit
Average profit of past 3 years = 1,10,000 + 1,20,000 + 1,30,000/3
= 3,60,000/3
= Rs 1,20,000
Profit upto 30th june 2024 = 1,20,000 x 3/12
= Rs 30,000
Hari’s share in profit = 30,000 x 1/3
= Rs 10,000