A, B and C are partners with a profit-sharing ratio of respectively. C died on 1st October 2021. The journal entry to be passed to give C his share of profit immediately will be:
- AProfit and Loss Suspense A/c Dr. To C's Capital A/c
- BC's Capital A/c Dr. To Profit and Loss Suspense A/c
- CA's Capital A/c Dr.B's Capital A/c Dr. To C's Capital A/c
- DC's Capital A/c Dr. To A's Capital A/c To B's Capital A/c
Solution & Step-by-step Explanation
When a partner dies mid-year, their estimated share of profit up to the date of death is transferred to their capital account by debiting the Profit and Loss Suspense Account. The entry is:
\text{Profit & Loss Suspense A/c Dr.}
\text{Profit & Loss Suspense A/c Dr.}