# ) Nisha, Myrah and Shilpa were partners for 2 : 1 : 1. Shipla died on July 01, 2021. Profits for last three years were ?20,000, ?35,000 and ?17,000 respectively. The books were closed on March 31. Pass Journal entry for Shilpa?s profit share till his death. (b) Zo, Mo and Lo were partners for 2 : 1 : 1. Lo died on July 01, 2020. Sales for the previous year was ?60,000 and profits were ?30,000. Sales from April 01, 2020 to July 01, 2021 amounted to ?25,000. Ascertain Lo?s share of profit and pass Journal entry.

Solution:
(a) Journal
 Date Particulars LF Debit Credit Profit & Loss  a/c    Dr     To Nisha's capital a/c     To Myrah's capital a/c     To Shilpa's capital a/c (Profits distributed on Shilpa's death on the ratio 2:1:1) 6000 3000 1500 1500
Note: Current years profit is estimated with an average profit of past 3 years  = 20000+35000+17000/3 = 24000
Profit till July 1st = 24000 x 3/12 = 6000

(b)Journal
 Date Particulars LF Debit Credit Profit & Loss a/c   Dr    To Lo's capital a/c  (Profit shared on Lo's death) 12,500 12,500

Note:
Profit %=Last years profit/last years sales x 100 = 60,000/30,000 x 100 = 200%
current years estimated profit = Current Year’s Sales up to the date of death × Profit %
25000 x 200% = 50,000

Decease Partner’s share = Firm’s Profit as per Step 2 × Deceased Partner’s ratio
=   50,000 x 1/4 = 12,500

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