Deceased Partner’s Share

Correct answer: C. ₹46,000

Total amount = capital + share in the reserve fund = ₹40,000 + ₹6,000 = ₹46,000. Therefore, option C is correct. An amount such as ₹45,000 results from an incorrect addition. In the examination, identify each amount credited to the deceased partner’s account and add them carefully.

Correct answer: A. Determine the amount payable to the deceased partner’s legal representative

The purpose is to determine the correct amount payable to the deceased partner’s legal representative after adjusting items such as capital, current account, accumulated profits, goodwill and the partner’s share of profit up to the date of death. Increasing sales, reducing costs or eliminating income tax is unrelated to this calculation. Exam tip: remember that the key accounting obligation on a partner’s death is settlement of the amount due to the deceased partner’s representative.

Correct answer: C. ₹52,000

Total amount payable = capital balance + share of profit = ₹50,000 + ₹2,000 = ₹52,000. Therefore, option C is correct. Option B results from incorrectly adding only ₹1,000. In such questions, add the stated capital and profit share unless other adjustments are specified.

Correct answer: C. ₹80,000

Remaining amount payable = Total amount payable − Amount already paid = ₹95,000 − ₹15,000 = ₹80,000. Therefore, option C is correct. ₹85,000 would result from subtracting the payment incorrectly. In such questions, subtract the amount already paid from the deceased partner’s total amount due.

Correct answer: A. Deceased partner’s capital account

The deceased partner’s share of profit earned up to the date of death but remaining undistributed is credited to that partner’s capital account. Under the fixed-capital method, it may instead be credited to the partner’s current account. It is not directly credited to the remaining partners’ capital accounts, the Realisation Account, or the Goodwill Account. Exam tip: Adjustments due to a deceased partner are generally credited to the deceased partner’s capital or current account.

Correct answer: C. ₹70,000

The amount payable under these two items is calculated by adding the deceased partner's capital and share of goodwill. Thus, total amount = ₹65,000 + ₹5,000 = ₹70,000. ₹65,000 represents only the capital, while ₹68,000 and ₹72,000 result from incorrect addition. Exam tip: Add all the relevant items specifically mentioned in the question to find the total amount due.

Correct answer: A. Death of the partner

The deceased partner’s share is determined because the partner has died. The settlement may include the partner’s share of profit or loss up to the date of death, goodwill, and the balance of the capital account, payable to the legal representative. Retirement is also a reconstitution event, but it is different from death. Exam tip: whenever the term “deceased partner” appears, link it to the partner’s death.

Correct answer: C. ₹100000

Net amount payable = total share payable − drawings = ₹120000 − ₹20000 = ₹100000. Therefore, option C is correct. Drawings must be deducted from the amount due, not added to it. Exam tip: whenever drawings are given in such a calculation, subtract them from the partner’s share payable.

Correct answer: A. It is the partner’s share of the firm’s profits earned up to death

Accumulated profits, such as a general reserve or credit balance of the Profit and Loss Account, represent profits earned by the firm up to the partner’s death. The deceased partner’s share is credited to the partner’s Capital or Current Account because it becomes payable to the legal representative. Profit earned after death is not included in this share. Exam tip: accumulated profits are credited to partners’ accounts, while accumulated losses are debited in the old profit-sharing ratio.

Correct answer: C. ₹34,000

The deceased partner’s capital and share of the reserve fund are added: ₹30,000 + ₹4,000 = ₹34,000. Therefore, ₹34,000 is correct. Choosing ₹33,000 or ₹35,000 would result from an addition error. In an examination, remember to add only the deceased partner’s share of the reserve fund, not the entire reserve fund.

Correct answer: A. The cash balance decreases

When the amount due to the deceased partner is paid from the firm's cash, cash or bank balance decreases; therefore, option A is correct. Option B is incorrect because payment causes cash to flow out, not in. Exam tip: Settlement of a payable through cash means a reduction in cash.

Correct answer: B. ₹80,000

The deceased partner’s share of loss is deducted from the total amount. Therefore, net amount = total share − share of loss = ₹85,000 − ₹5,000 = ₹80,000. ₹90,000 would result only if the amount represented a share of profit to be added. In exams, remember: add profit and deduct loss.

Correct answer: C. ₹120000

The capital and the share of goodwill given in the question are added: ₹100000 + ₹20000 = ₹120000. Therefore, option C is correct. This amount is based only on these two items; adjustments such as profit or loss, reserves, or other liabilities are not included. Exam tip: Add the items credited to the deceased partner’s account and subtract any items that reduce the amount.

Correct answer: A. Because it is part of the profit accrued up to the date of death

The net gain arising from the revaluation of assets and liabilities is treated as accruing up to the date on which the partner was associated with the firm. Therefore, the deceased partner’s share of revaluation profit, calculated in the profit-sharing ratio, is credited to their account. Option C is incorrect because revaluation profit is generally a book gain, not an immediate cash receipt. Exam tip: In a partner’s death adjustment, include their share of profit up to death, revaluation profit, and accumulated profits.

Correct answer: C. ₹1,00,000

The balance payable is calculated by subtracting the amount already paid from the total amount due: ₹1,30,000 − ₹30,000 = ₹1,00,000. Therefore, option C is correct. ₹90,000 would result if ₹40,000 had been paid, not ₹30,000. In such questions, subtract the payment already made from the total amount payable.

Correct answer: A. To properly settle the amount due to the deceased partner’s legal representative

On a partner’s death, the partner’s capital and current accounts are adjusted for items such as reserves, goodwill, revaluation, and profit up to the date of death. The purpose is to determine and properly settle the amount payable to the deceased partner’s legal representative. Increasing sales or routine expenses is unrelated to this calculation. Exam tip: the final amount is generally payable to the deceased partner’s legal representative.

Correct answer: C. ₹1,50,000

The amount payable to a deceased partner equals the total of all items credited or otherwise adjusted in the partner’s account. Therefore, when the total amount due is ₹1,50,000, the amount payable is also ₹1,50,000. Exam tip: If the question gives the total amount due and mentions no deduction or further adjustment, use that total as the answer.

Correct answer: A. Amount due from the firm

The legal representative is entitled to the amount due from the firm after adjusting the deceased partner’s capital, current account, goodwill, reserves, and share of profit or loss up to the date of death. There is no automatic claim on profits earned after death or on the capital introduced by a new partner. Exam tip: remember that the claim is for the amount due to the deceased partner.

Correct answer: B. ₹60,000

The total amount due to the deceased partner’s estate is calculated as capital plus the share of accumulated profits: ₹55,000 + ₹5,000 = ₹60,000. Therefore, option B is correct. An amount such as ₹58,000 results from an addition error; always add all amounts credited to the deceased partner’s account.

Correct answer: A. Because interest for that period is accrued and payable under the partnership agreement

If the partnership agreement provides interest on capital, the interest accrued up to the date of death becomes an amount due to the deceased partner and is credited to the partner’s account. An automatic increase in sales, stock, or cash is not the reason. Exam tip: In death-related adjustments, separately calculate the deceased partner’s share of interest, salary, and profit up to the date of death.

Correct answer: B. ₹90,000

A revaluation loss reduces the amount payable to the partner. Therefore, net amount = ₹95,000 − ₹5,000 = ₹90,000. Exam tip: deduct a revaluation loss and add a revaluation profit when calculating the amount due.

Correct answer: A. Deceased partner’s share of goodwill

The deceased partner’s share of goodwill is credited to his or her account, so it increases the amount payable to the partner’s estate. Drawings, accumulated loss and revaluation loss are debited and therefore reduce the claim. Exam tip: credit items such as goodwill and profit increase the claim, while debit items such as losses and drawings reduce it.

Correct answer: B. ₹90,000

The total amount payable to the deceased partner is calculated by adding the Capital Account balance and the share of goodwill: ₹75,000 + ₹15,000 = ₹90,000. Therefore, option B is correct. Choosing ₹85,000 reflects an addition error. In such questions, add all credit items due to the deceased partner.

Correct answer: A. Firm's liability

The amount due to the deceased partner, including the balance arising from capital, profit or goodwill, remains a liability of the firm until it is paid. It is generally transferred to the deceased partner’s executor’s loan account. It is not income or profit; in exams, an unpaid amount due should be identified as a liability.

Correct answer: C. ₹100000

Remaining amount payable = Total amount payable − Amount paid = ₹125000 − ₹25000 = ₹100000. Therefore, option C is correct. The ₹95000 distractor results from making an incorrect subtraction. In such questions, subtract the amount already paid from the deceased partner’s total amount due.