Q.A, B and C are partners in a firm sharing profits and losses in the ratio 5:3:2. The firm closes its books every year on 31st March. C dies on 31st July 2024. The firm's profit for the year ended 31st March 2024 (the previous year) was ₹1,80,000. In the absence of any partnership deed provision to the contrary, calculate C's share of profit for the period from 1st April 2024 to the date of death, on the time basis.
Step 1 — C's profit-sharing ratio. A : B : C = 5 : 3 : 2 (10 parts total), so C's share = 2/10 = 1/5.
Step 2 — C's notional full-year share of the previous year's profit. 1/5 × ₹1,80,000 = ₹36,000. This is used as a reasonable stand-in for what C's share of the current year would likely be, since the actual current-year profit is not yet known.
Step 3 — Apportion by time. C was alive from 1st April to 31st July 2024 — a period of 4 months out of the 12-month accounting year. C's share up to death = ₹36,000 × 4/12 = ₹12,000.
Step 4 — Dual-solve check (reverse the order of the two steps). Instead of computing C's full-year share first, first estimate the firm's profit for just the 4-month period: ₹1,80,000 × 4/12 = ₹60,000. Then apply C's own ratio to this: 1/5 × ₹60,000 = ₹12,000. Both orders of calculation give the identical figure, confirming the answer.
Step 5 — Accounting entry. Profit & Loss Suspense A/c Dr ₹12,000; To C's Capital A/c ₹12,000. This Suspense account balance is later closed off against the firm's actual profit for the full year in which C died.
C's share of profit up to the date of death = ₹12,000
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