P,Q and R were partners in a firm sharing profits in the ratio 2:2:1 the firm closes its books - Accountancy - Reconstitution- Retirement/Death of a Partner

Question

P,Q and R were partners in a firm sharing profits in the ratio
2:2:1 the firm closes its books on 31 march every year P died at 3
months after the last accounts were prepared on that date the
goodwill of the firm was valued at rs 90,000 on the death of a
partner his share of profit in the year of death was to be
calculated on basis of average profits of last 4 years the profit
of last 4 years were 2007 - rs 2,00,000 2006 - rs 1,80,000 2005 -
2,10,000 2004 - 1,70,000(loss) pass necessary journal for the
treatment of goodwill and p's share of profit on his date of
death

Amit Chatterjee · Accepted Answer

Since, in this question, nothing explicitly has been mentioned
regarding the ratios, so the new ratio between Q and R is 2:1 and
the gaining ratio is also 2:1 (you can calculate it on your own)
Thus, for goodwill, we need to simply pass on the JE as Remaining
Partners' Capital A/c Dr To Retiring Partner's Capital A/c

Q Dr 24,000
R Dr 12,000
To P 36,000

Calculation of Goodwill = 90,000×P's share =90,000×25=36,000Q's share =36,000×Q's Gaining Share =36,000×23=24,000R's share =36,000×R's Gaining Share =36,000×13=12,000

Calculation of P's Share upto date of his death

Average Profit = 2,00,000+1,80,000+2,10,000 -1,70,0004=1,05,000P's up-to-date profit =1,05,000×P's profit share×No
 of months he remained in business12                                        =1,05,000×25×312=10,500