A, B and C were partners in a firm sharing profits equally on 31st March 2021. Mr. C died on 30th June 2021. Calculate the amount of profits of current year to be credited to his Capital Account on the basis of following. C's share of profits was to be calculated on the basis of sales, and it is specified that the sales during the previous year was ₹8,00,000 with profit ₹1,00,000 and sales from 1st April 2021 to 30th June 2021 was ₹1,50,000.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → ₹6,250
On the basis of sales, the profit earned on last year’s sales is applied to the sales of the current period.
Profit on ₹1 of sales = ₹1,00,000 ÷ ₹8,00,000 = ₹0.125
Profit on sales up to 30th June = ₹1,50,000 × 0.125 = ₹18,750
C’s share (profits shared equally) = ₹18,750 × 1/3
= ₹6,250
In the book’s example the figures are the same, but Champak’s share is 4/10, so he gets Rs. 7,500.
NCERT (2026-27 edition):
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