Question

Karim, saleem and Raheem were partners in a firm sharing profits and losses in the ratio of 3:4:3.The firm closes its books on 31st march every year. On 1-10-2019 karim died. On karim's death the goodwill of the firm was valued at 350000. Karim's share in the profits of the firm in the year of his death was to be calculated on the basis of average profits of last four years.The profits for the last four years were 2015-16 -170000;2016-17 -130000; 2017-18 - 190000 and 2018-19 - 110000.The total ampunt payable to karim's executors on his death was 735000.It was paid on 15-10-2019.pass necesaary journal entries for the above transactions in the books of the firm.

Answer 1

Answer:

P/l Suspense A/c Dr. 22,500

   To Kareeem's Capital A/c 22,500

Explanation:

Average Profit = (1,70,000+1,30,000+1,90,000+1,10,000)/4

                        = 6,00,000/4

                         = 1,50,000

K's Share of profit = 1,50,000*3/10*6/12

                             = 4,50,000/10   *    6/12

                            = 22,500

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Answer 2

Given: Karim, Saleem and Raheem were partners in a firm and transactions are given after Karim died.

To prepare journal entries for the given transactions in the books of the firm.

Explanation: