Riya, Tiya, Priya were partners in a firm sharing profit in a ratio of 4:3:2. The profit of the firm for the year ending March 31, 2020 was ₹3,60,000. Tiya died on June 30, 2020.

Which account will be debited and by how much on account of share or profit up to the date of death?

Profit and loss suspense A/c ₹30,000

The correct answer is option 3- Profit and loss suspense A/c ₹30,000.

Old ratio 4:3:2
Profit of the firm ₹3,60,000
Based on last year profit, Profit upto her death=
                               = 3,60,000 x 3/9 x 3/12
                               = 3,60,000 x 1/3 x 1/4
                               = 1,20,000/4
                               = 30,000

Profit and loss suspense account is debited in case of death.

Following journal entry is passed for this-
Profit and loss suspense A/c Dr. ₹30,000.
   To Tiya's Capital A/c                         ₹30,000.