Charu, Harsha and Vaishali are equal partners in a firm. Charu retired from the firm on 30th June, 2022 and according to the agreement, the share of profits of a retiring or a deceased partner up to the date of the retirement/death is to be calculated on the basis of the average profit for the last 5 years. The net profits for the last 5 years were: I – ₹ 14,000; II – ₹ 18,000; III – ₹ 16,000; IV – ₹ 10,000 (Loss) and V – ₹ 16,000. The firm closes its books on 31st March, every year.

Pass the necessary Journal entry to record Charu’s share of profit up to the date of retirement.

Anurag Pathak Changed status to publish March 3, 2024
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