P, Q & R are partners in a partnership firm named RAWAT SOLUTIONS and sharing profits in the ratio of 4:3:1. Q retires and sold his share of profits to other partners for ₹8,100. ₹3,600 was paid by P and ₹4,500 was paid by R. Profit for the year after Q's retirement is ₹10,500.

Pass the journal entry for the distribution of profit?

Profit and Loss Appropriation A/c    Dr. ₹10,500
                   To P's Capital A/c                       ₹7,000
                   To R's Capital A/c                       ₹3,500

The correct answer is option 3-
Profit and Loss Appropriation A/c    Dr. ₹10,500
                   To P's Capital A/c                       ₹7,000
                   To R's Capital A/c                       ₹3,500

New share = Old share + Acquired share

P's new share = 4/8 + 1/6
                       = (12 +4)/24
                       = 16/24 or 2/3

R's new share = 1/8 + 5/24
                       = (3 +5)/24
                       = 8/24 or 1/3

New ratio = 2/3 : 1/3
                = 2:1

As Q is retired from the firm and this profit is after his retirement so it will be distributed in the new ratio means 2:1.
P's share = 10,500 x 2/3
               = 21,000/3
               = 7,000
R's share = 10,500 x 1/3
               = 3,500

Profit is distributed through profit and loss appropriation account so journal entry will be-
Profit and Loss Appropriation A/c    Dr. 10,500
                   To P's Capital A/c                    7,000
                   To R's Capital A/c                    3,500