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A, B and C are partners sharing profits and losses in the ratio of 3: 2: 1. B died on 30th June, 2021. For the year ended 31st March, 2022, proportionate profit of 2021 is to be taken into consideration. During the year ended 31st March, 2022, bad debts of Rs. 2,000 had to be adjusted. Profit for the year ended 31st March, 2021 was Rs. 14,000 before adjustment of bad debts. Calculate B’s share of profit till the date of his death.

SOLUTION

Profit for the year 2020-21 before adjusting bad debts = Rs. 14,000
Bad debts = Rs. 2,000
Profits after adjusting bad debts = 14,000 – 2,000 = Rs. 12,000
Proportionate profit of the firm (from April 01, 2021 to June 30, 2022)
= 12,000 × 3/12 = 3,000

B’s share of profit (from April 01, 2021 to June 30, 2022) =
= 3,000 × 2/6 = 1,000


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