Sarthaks Test
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X, Y and Z were partners in a firm sharing profit in 3:2:1 ratio. The firm closes its books on 31st March every year. Y died on 30th June, 2016. On Y’s death the goodwill of the firm was valued at Rs.60,000 Y’s share in the profits of the firm till the time of his death was to be calculated on the basis of previous year’s profit which was Rs.1,50,000. Pass necessary Journal entries for the treatment of goodwill and Y’s share of profit at the time of his death.

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Working Notes:

Y's share of Profit ( till death ) = previous year's profit x Y's profit share x 3 months ( April 01 2016 till june 30,2016

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