Check sibling questions

Harihar, Hemang and Harit were partners with fixed capitals of ₹3,00,000, ₹ 2,00,000 & ₹ 1,00,000 respectively. They shared profits in the ratio of their fixed capitals. Harit died on 31st May, 2020, whereas the firm closes its books of accounts on 31st March every year. According to their partnership deed, Harit’s representatives would be entitled to get share in the interim profits of the firm on the basis of sales. Sales and profit for the year 2019-20 amounted to ₹8,00,000 and ₹2,40,000 respectively and sales from 1st April, 2020 to 31st May 2020 amounted to ₹ 1,50,000. The rate of profit to sales remained constant during these two years. You are required to:

(i) Calculate Harit’s share in profit.

Answer

Calculation of Harit's share in Profit till the date of death
Sales for 2019-20 800000
Profit for 2019-20 240000
   
Profit % = 240000 /800000 x 100
  = 30%
Sales from 1st April to 31st May,2020     = 150000
Profit for that period                     = 45000 (30%*150000)
   
Harit's share in profit          = 45000 x 1/6
  = 7500

 

NOTE : Profit % remained constant during the two years.

Therefore, we have taken last year profit % .

(ii) Pass journal entry to record Harit’s share in profit.

Answer

Journal Entry for Harit's share in Profit
Profit and Loss Suspense A/c  Dr 7500  
                     To Harit's Capital A/c   7500

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Transcript

Harihar, Hemang and Harit were partners with fixed capitals of ₹3,00,000, ₹ 2,00,000 & ₹ 1,00,000 respectively. They shared profits in the ratio of their fixed capitals. Harit died on 31st May, 2020, whereas the firm closes its books of accounts on 31st March every year. According to their partnership deed, Harit’s representatives would be entitled to get share in the interim profits of the firm on the basis of sales. Sales and profit for the year 2019-20 amounted to ₹8,00,000 and ₹2,40,000 respectively and sales from 1st April, 2020 to 31st May 2020 amounted to ₹ 1,50,000. The rate of profit to sales remained constant during these two years. You are required to: (i) Calculate Harit’s share in profit. Answer Calculation of Harit's share in Profit till the date of death Sales for 2019-20 800000 Profit for 2019-20 240000 Profit % = 240000 /800000 x 100 = 30% Sales from 1st April to 31st May,2020 = 150000 Profit for that period = 45000 (30%*150000) Harit's share in profit = 45000 x 1/6 = 7500 NOTE : Profit % remained constant during the two years. Therefore, we have taken last year profit % . (ii) Pass journal entry to record Harit’s share in profit. Answer Journal Entry for Harit's share in Profit Profit and Loss Suspense A/c Dr 7500 To Harit's Capital A/c 7500

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Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 12 years. He provides courses for Maths and Science at Teachoo.