Deceased Partner’s Share

Profit is assumed to accrue evenly throughout the year. Therefore, estimated profit for 8 months = ₹5,40,000 × 8/12 = ₹3,60,000. Option B represents 6 months’ profit, option C represents 9 months’ profit, and option D represents 4 months’ profit. Exam tip: For a time-based estimate, multiply the annual profit by the relevant number of months and divide by 12. This is the firm’s total estimated profit; the deceased partner’s share would then be calculated using the profit-sharing ratio.

“Up to the date” means the deceased partner’s proportionate share in the profit earned from the beginning of the current accounting year up to the date of death. Option B refers to the previous complete year, whereas option C covers the period after death. Exam tip: For the year of death, calculate profit for the period from the start of the accounting year up to the date of death.

Estimated firm profit up to the date of death = ₹9,60,000 × 3/12 = ₹2,40,000. The deceased partner’s share = ₹2,40,000 × 1/4 = ₹60,000. Therefore, option A is correct. Option B represents the firm’s profit for three months, not the deceased partner’s share. In the exam, first apply the time proportion and then apply the partner’s profit-sharing ratio.

The deceased partner’s share of profit up to the date of death is credited to his capital or current account. This increases the credit balance payable to his legal representative. Therefore, option A is correct; the adjustment increases, rather than decreases, the firm’s liability. Exam tip: Credit the deceased partner’s account with the profit share earned up to the date of death.

Profit up to the date of death = Annual profit × proportion of the year elapsed = ₹1,50,000 × 4/12 = ₹50,000. Hence, option A is correct. Option B results from using an incorrect time ratio, whereas annual profit must be apportioned over 12 months. In the examination, multiply the annual profit by the number of elapsed months divided by 12.

The deceased partner’s profit share is estimated for the period up to the date of death so that the correct amount payable to the partner’s capital or executor’s account can be determined. Option B concerns the firm’s tax liability, while options C and D are unrelated to this adjustment. In an exam, remember that the estimate is generally based on past profits and an appropriate time or sales ratio.

The profit up to the date of death is calculated on a time basis. Therefore, ₹4,20,000 × 9/12 = ₹3,15,000. Option D represents the profit for the full 12 months, whereas only 9 months are relevant here. Exam tip: For retirement or death during the year, multiply the annual profit by the relevant months divided by 12.

Under the time-basis method, the estimated annual profit is apportioned according to the period elapsed from the beginning of the accounting year to the date of death and is then multiplied by the deceased partner’s profit-sharing ratio. Therefore, the elapsed period directly affects the calculation; furniture cost and the number of postage bills do not determine the time proportion. Exam tip: calculate the elapsed months or days first, and then apply the profit-sharing ratio.

Profit up to the date of death is calculated in proportion to the part of the year that has elapsed: ₹12,00,000 × 6/12 = ₹6,00,000. Therefore, option A is correct. ₹3,00,000 would represent only three months’ profit, whereas six months is half of the year. Exam tip: Profit up to death = Annual profit × elapsed months/12.

A deceased partner is entitled to a proportionate share of the firm’s profit only up to the date of death, and this amount is credited to the partner’s capital or current account before being settled with the legal representatives. Option B is incorrect because, when death occurs during the year, the profit up to that date may be estimated without waiting for year-end. Exam tip: always divide the accounting period into the period up to death and the period after death.

Profit up to the date of death = Annual average profit × fraction of the year elapsed × the partner’s profit-sharing ratio. Therefore, ₹7,80,000 × 5/12 × 1 = ₹3,25,000. Option B incorrectly uses 6 months instead of 5. Exam tip: Convert the annual profit into the proportion applicable to the elapsed months, and then multiply by the partner’s profit-sharing ratio if one is provided.

A partner who remains a partner up to the date of death is entitled, under the partnership agreement, to his share of the profit earned from the beginning of the accounting year until that date. This amount may be estimated using the previous year’s profit, time basis, or sales basis, as applicable. Thus, R directly explains the entitlement stated in A. Exam tip: Include profit only up to the date of death; post-death profit belongs to the continuing partners according to the revised arrangement.

Using the time ratio, profit for 7 months = ₹2,16,000 × 7/12 = ₹1,26,000. Therefore, option A is correct. Option B corresponds to six months, option C to four months, and option D to eight months. In exams, multiply the annual profit by the number of relevant months divided by 12.

Profit up to the date of death = Annual profit × Months elapsed / 12 = ₹10,80,000 × 2/12 = ₹1,80,000. This calculation assumes that profit accrues evenly throughout the year. If the partner’s profit-sharing ratio is also given, this amount must be multiplied by that ratio to determine the deceased partner’s actual share. Exam tip: For profit up to the date of death, multiply annual profit by the elapsed months divided by 12.

The deceased partner’s share of profit earned up to the date of death is credited to the deceased partner’s Capital Account or Current Account. Since this amount is ultimately payable to the deceased partner’s executor, it represents a liability for the firm, not a revenue receipt or capital gain. Exam tip: Always credit the deceased partner’s account with the profit share earned up to the date of death.

Profit share up to the date of death = Average annual profit share × elapsed months/12 = ₹9,00,000 × 4/12 = ₹3,00,000. ₹2,25,000 would represent only three months’ share, so it is incorrect. Exam tip: For the period up to death, multiply the annual profit share by the number of completed months divided by 12.

A deceased partner is generally entitled to a share of the profit earned from the beginning of the accounting year up to the date of death, according to the profit-sharing ratio. Therefore, determining the time period identifies the appropriate portion of the estimated annual profit to be credited to the deceased partner’s account. Capital, bank balance, and debt are not determined by this period. Exam tip: Always restrict the profit period to the date of death.

Estimated profit up to the date of death = Average annual profit × months completed/12 = ₹6,60,000 × 11/12 = ₹6,05,000. Option D incorrectly treats the entire annual profit as earned, although only 11 months had elapsed. Exam tip: To calculate the deceased partner’s actual share, multiply this amount by the partner’s profit-sharing ratio.

The deceased partner’s share of profit earned up to the date of death is payable to the partner’s legal representatives. It is credited to the representatives’ account along with the deceased partner’s capital, current account and other adjustments; payment of this amount settles their claim. Customers, suppliers and the bank are not claimants to the deceased partner’s profit share. Exam tip: Include profit up to the date of death in the amount payable to the deceased partner’s legal representatives.

Profit up to the date of death = Annual profit × months elapsed/12 = ₹3,24,000 × 5/12 = ₹1,35,000. Therefore, option A is correct. Option B uses a 6-month ratio, while option C uses a 4-month ratio. In such questions, divide the annual profit by 12 and multiply by the number of completed months.

When a partner dies before the end of the accounting year, the profit for the complete year has not yet been determined. However, the deceased partner’s legal representative is entitled to the partner’s share of profit earned up to the date of death, so that profit must be estimated or calculated for that period. The other options relate to capital, salary, or machinery accounting, not to the deceased partner’s profit share. Exam tip: This share is commonly calculated up to the date of death using the previous year’s profit, sales, or time basis.

The period up to death is 3 months, which is \(3/12\) of the year. Therefore, the time-apportioned profit is ₹15,00,000 × \(3/12\) = ₹3,75,000. Option B, ₹5,00,000, represents profit for 4 months and is therefore incorrect. In an examination, express the elapsed period as a fraction of 12 months and multiply it by the annual profit. The deceased partner’s final share would additionally require applying the partner’s profit-sharing ratio.

The deceased partner’s share of profit is calculated only for the period from the date of the last accounts up to the date of death. Therefore, including profit for the period after death is incorrect. Applying a time ratio to the previous year’s profit or estimating profit on the basis of average profit up to the date of death are generally accepted methods. Exam tip: always stop the profit calculation at the date of death.

Estimated profit of the firm up to the date of death = ₹4,80,000 × 6/12 = ₹2,40,000. The deceased partner’s share = ₹2,40,000 × 1/4 = ₹60,000. Therefore, ₹60,000 is correct. ₹2,40,000 represents the firm’s total estimated profit and does not apply the partner’s 1/4 profit-sharing ratio. Exam tip: first calculate the firm’s profit for the relevant time period, then apply the deceased partner’s profit-sharing ratio.

The deceased partner’s share of profit earned up to the date of death is credited to the partner’s account and forms part of the amount payable to the executor or legal representative. Hence, the main purpose is to determine the deceased partner’s claim correctly. The future profit-sharing ratio is a separate adjustment, and this calculation does not discharge the firm’s liabilities. Exam tip: calculate profit only for the period from the beginning of the accounting year up to the date of death.