Deceased Partner’s Share

Correct answer: A. ₹7,20,000

Profit up to the date of death for 9 months = Estimated annual profit × 9/12 = ₹9,60,000 × 9/12 = ₹7,20,000. Therefore, option A is correct. Option B, ₹6,40,000, represents the profit for 8 months. Exam tip: Multiply the annual profit by the completed months and divide by 12.

Correct answer: A. Capital Account

The deceased partner’s share of profit up to the date of death is credited to the partner’s capital account under the fluctuating capital system, with the Profit and Loss Suspense Account generally debited. The Cash Account is not credited because no immediate cash receipt is involved. For exams, remember that under the fixed capital system, the amount is generally credited to the partner’s Current Account.

Correct answer: A. ₹1,89,000

Profit up to the date of death = Annual profit × elapsed fraction of the year = ₹3,24,000 × 7/12 = ₹1,89,000. Therefore, option A is correct. Option B represents profit for 8 months, while option C represents profit for 6 months. If the deceased partner’s profit-sharing ratio were given, that ratio would also have to be applied to this time-apportioned profit. Exam tip: Divide annual profit by 12 and multiply by the number of months elapsed.

Correct answer: A. Legal representatives or executors

The deceased partner’s share of profit earned up to the date of death is credited to the deceased partner’s Capital or Current Account and then transferred to the Executor’s Account. The amount is ultimately payable to the executor or legal representatives. The incoming partner becomes a partner in the reconstituted firm but does not receive the deceased partner’s entitlement. Exam tip: Remember the sequence—calculate profit up to the date of death, credit it to the deceased partner, and settle it with the executor or legal representatives.

Correct answer: A. ₹3,50,000

Since the average profit is annual, the estimated profit for 5 months is ₹8,40,000 × 5/12 = ₹3,50,000. Therefore, option A is correct. Option B represents only 4 months’ profit, so it is incorrect. Exam tip: To calculate profit up to the date of death or retirement, divide the annual average profit by 12 and multiply it by the relevant number of months; the deceased partner’s actual share is then calculated using the partner’s profit-sharing ratio.

Correct answer: A. देयता (Liability)

The deceased partner’s share of profit up to the date of death is credited to the partner’s capital account. If the amount is not paid immediately, it becomes payable to the deceased partner or the executor and is therefore shown as a liability of the firm. It is not treated as income because the profit has already been determined and appropriated. Exam tip: An amount due but unpaid to a partner or executor is generally presented as a liability.

Correct answer: A. ₹2,00,000

Profit up to the date of death is calculated on a time basis: ₹12,00,000 × 2/12 = ₹2,00,000. Therefore, option A is correct. Option B represents only one month’s profit, while options C and D represent three and four months’ profit respectively. To determine the deceased partner’s actual share, this amount must subsequently be multiplied by the partner’s profit-sharing ratio. Exam tip: For profit up to retirement or death, multiply annual profit by the elapsed months divided by 12.

Correct answer: A. मृत्यु की तिथि

The date of death determines the relevant period—from the beginning of the accounting year or the date of the last accounts up to the date of death. Profit for this period is then estimated using the previous year’s profit or another agreed basis, and the deceased partner’s share is calculated. The bank balance and capital account number do not determine the profit period. Exam tip: First identify the period between the last accounting date and the date of death.

Correct answer: A. ₹4,18,000

The deceased partner’s share of profit up to the date of death is calculated on a time basis. Therefore, the share for 11 months = ₹4,56,000 × 11/12 = ₹4,18,000. Option B represents the amount for only 10 months, while option D represents the full 12-month amount. Exam tip: Divide the annual profit by 12 and multiply it by the number of months involved.

Correct answer: A. ₹6,40,000

The time-apportioned share up to death is calculated as: annual share of profit × elapsed months/12. Thus, ₹7,68,000 × 10/12 = ₹6,40,000. Option B would represent only nine months’ share, so it is incorrect. In the examination, use the number of months completed from the beginning of the accounting year as the numerator.

Correct answer: A. Average profit of the previous years

The profit up to the date of death is generally estimated on the basis of the average profit of the preceding years, which reduces the effect of unusually high or low profit in any one year. Profit of the previous year alone is used only when specifically agreed or required. In an exam, when the deed is silent, select ‘average profit’.

Correct answer: A. ₹1,84,000

The deceased partner’s estimated share of profit is calculated on a time basis: ₹2,76,000 × 8/12 = ₹1,84,000. Option B represents 10 months, option C represents 6 months, and option D represents 9 months of profit. Exam tip: multiply the annual profit by the number of months elapsed divided by 12.

Correct answer: A. It will increase

The deceased partner’s share of profit up to the date of death is credited to his account. A credit entry for this profit increases the balance of his capital account, so option A is correct. Option D may apply when the amount is credited to the current account instead of the capital account, as is generally done under the fixed capital method. Exam tip: first identify the account to which the profit share is credited.

Correct answer: A. ₹2,55,000

Estimated profit up to the date of death = Average annual profit × fraction of the year elapsed = ₹10,20,000 × 3/12 = ₹2,55,000. Therefore, option A is correct. Option B corresponds to four months and option C to two months. Exam tip: Convert annual average profit into profit for the relevant period by multiplying it by months/12.

Correct answer: A. To include the deceased partner’s profit share in the amount payable to the legal representative

The deceased partner is entitled to the share of profit earned up to the date of death. This share is calculated using the agreed basis, such as time, sales, or average past profits, credited to the deceased partner’s capital or current account, and included in the amount payable to the legal representative. The new profit-sharing ratio and goodwill adjustment are separate calculations; calculating the profit share is not meant to estimate cash needs or increase goodwill. Exam tip: calculate the deceased partner’s profit share only up to the date of death.

Correct answer: A. ₹1,30,000

Since one year has 12 months, profit for 1 month = ₹15,60,000 × 1/12 = ₹1,30,000. Option B represents two months’ profit, option C represents half a month’s profit, and option D represents three months’ profit. Exam tip: first divide the annual profit by 12 to obtain monthly profit, and then apply the deceased partner’s profit-sharing ratio.

Correct answer: A. Both A and R are correct, and R is the correct explanation of A

A partner retains the right to his agreed share of the firm’s profit up to the date of death. Accordingly, the profit attributable to that period is credited to the deceased partner’s account or to the account of the legal representative. The amount may be estimated on the basis of actual profit, time, sales, or average past profit, as provided in the partnership deed. Since he was a partner during that period, the Reason correctly explains the Assertion. Exam tip: Do not credit the deceased partner with the profit for the entire year; consider only the period up to the date of death.

Correct answer: A. ₹2,10,000

The estimated profit up to the date of death is calculated in proportion to the number of months: ₹5,04,000 × 5/12 = ₹2,10,000. Therefore, option A is correct. Option B represents four months’ profit, while option C represents six months’ profit. For exams, remember that if the deceased partner’s actual share is required, this amount must also be multiplied by the partner’s profit-sharing ratio.

Correct answer: A. Deceased Partner’s Executor’s Account

The deceased partner’s share of profit up to the date of death is first credited to the partner’s capital account. The total amount due, including capital, accumulated profits and other adjustments, is then transferred to the deceased partner’s Executor’s Account. Therefore, option A is correct. The Profit and Loss Appropriation Account is used to determine and allocate profit, not to record the final amount payable to the deceased partner. Exam tip: The final amount payable to a deceased partner is transferred to the Executor’s Account.

Correct answer: A. ₹7,84,000

The profit share up to the date of death is calculated on a time basis: ₹13,44,000 × 7/12 = ₹7,84,000. Therefore, option A is correct. Option B corresponds to six months, while option C corresponds to eight months. Exam tip: multiply the annual profit share by the number of months completed divided by 12.

Correct answer: A. To determine the period for which profit is to be apportioned

A deceased partner is entitled to the proportionate profit earned up to the date of death. The time ratio helps apportion the annual profit between the period up to death and the remaining period. Therefore, option A is correct; increasing capital or reducing liabilities is not the purpose of the time ratio. Exam tip: convert the relevant period into months or days before calculating the ratio.

Correct answer: A. ₹3,00,000

Estimated profit up to death = average annual profit × fraction of the year elapsed = ₹18,00,000 × 2/12 = ₹3,00,000. Hence, option A is correct. ₹4,50,000 would represent profit for three months, so option B is incorrect. This is the firm’s total estimated profit; the deceased partner’s individual share would additionally require multiplication by that partner’s profit-sharing ratio. Exam tip: when profit is estimated month-wise, divide the annual profit by 12 and multiply by the number of completed months.

Correct answer: A. ₹4,92,000

Profit credited up to the date of death = Annual share of profit × fraction of the year completed = ₹9,84,000 × 6/12 = ₹4,92,000. Therefore, option A is correct. Option B represents only four months’ profit, not six months’ profit. Exam tip: For death or retirement adjustments, multiply the annual profit by the elapsed months divided by 12; if the partner’s profit-sharing ratio is given, apply that ratio before calculating the time proportion.

Correct answer: A. लाभ का सामान्यीकृत और उचित अनुमान लगाने हेतु

The actual profit up to the date of death is usually determined only when the final accounts are prepared. Therefore, the average of past profits provides a fair, normalised estimate for the intervening period and reduces the effect of abnormal fluctuations. Reducing tax or increasing cash is not the purpose of using average profit. Exam tip: Treat average profit as an estimate of profit for the interim period, not as a cash inflow.

Correct answer: A. ₹2,80,000

Estimated profit up to the date of death = Annual profit × fraction of the year elapsed = ₹6,72,000 × 5/12 = ₹2,80,000. Hence, option A is correct. Option B represents six months’ profit, while option C represents three months’ profit; option D uses an incorrect proportion for five months. Exam tip: To calculate the deceased partner’s actual share, multiply this interim profit by the partner’s profit-sharing ratio.