6 :- X, Y and Z were partners in a firm sharing profit in the ratio of 3:2:1. The firm closes its books on 31st March every year. Y died on 30th June, 2024. On Y’ death, goodwill of the firm was valued at Rs 60,000. Y’s share in the profit of the firm till the date of his death was to be calculated on the basis of previous year’s profit which was Rs 1,50,000. Pass necessary journal entries for goodwill and Y’s share of profit at the time of his death.
Solution :-
WORKING NOTES :-
(i) Calculation of Y’s share of goodwill
Goodwill of the firm = Rs 60,000
Y’s share of goodwill = 60,000 x 2/6 = Rs 20,000
Rs 20,000 will be debited in X and Z capital account in their gaining ratio
X will pay = 20,000 x 3/4 = Rs 15,000
Y will pay = 20,000 x 1/4 = Rs 5,000
(ii) Calculation of Y’s share of profit
Previous year profit = Rs 1,50,000
Y’s share of profit till death = Previous year profit x Y’s share profit x 3 months
= Rs 1,50,000 x 2/6 x 3/12
= Rs 12,500