Deceased Partner’s Share

Correct answer: A. कानूनी प्रतिनिधियों का

The deceased partner’s share of profit earned up to the date of death is credited to the partner’s Capital Account or Executor’s Account and becomes payable to the legal representatives. Therefore, accurate calculation safeguards the correct amount of their claim. Customers, suppliers and the bank are not direct claimants to this profit share. In an examination, remember that profit up to the date of death is settled with the deceased partner’s legal representatives.

Correct answer: A. ₹8,55,000

Share of profit up to death = estimated annual share of profit × elapsed months/12. Therefore, ₹11,40,000 × 9/12 = ₹8,55,000. Option B corresponds to 8 months, while C and D represent amounts based on 6 and 10 months respectively. Exam tip: For profit up to the date of death, multiply the annual profit or the partner’s annual share by the fraction of the accounting year completed; apply the partner’s profit-sharing ratio if the annual figure is the firm’s total profit.

Correct answer: A. Equitable determination of rights

A deceased partner is legally entitled to the share of profit earned up to the date of death. Crediting this amount to the partner’s capital or current account ensures a fair determination of the amount payable to the legal representative or executor. The matching principle in option D concerns recording related revenue and expenses in the same accounting period; it does not primarily deal with settling a deceased partner’s claim. Exam tip: Profit up to the date of death is calculated separately and credited to the deceased partner’s account.

Correct answer: A. ₹2,88,000

The firm’s profit up to the date of death is estimated by applying the elapsed-months fraction to the average annual profit: ₹4,32,000 × 8/12 = ₹2,88,000. Therefore, option A is correct. This is the firm’s total estimated profit; the deceased partner’s individual share would additionally require the profit-sharing ratio. Exam tip: Multiply the annual average profit by elapsed months/12.

Correct answer: A. ₹91,500

Profit earned up to the date of death = ₹14,64,000 × 3/12 = ₹3,66,000. The deceased partner’s share = ₹3,66,000 × 1/4 = ₹91,500, so option A is correct. Option B represents 1/4 of the full annual profit and ignores the three-month time adjustment. Exam tip: first apportion the annual profit for the period up to death, and then apply the deceased partner’s profit-sharing ratio.

Correct answer: A. Increases

The deceased partner’s share of profit earned up to the date of death is credited to the partner’s capital account. This increases the capital balance, which forms part of the amount payable to the legal representative after other adjustments. Therefore, the claim increases. Exam tip: a share of profit is credited, whereas a share of loss is debited.

Correct answer: A. ₹7,26,000

Profit up to the date of death = Full-year profit × elapsed months/12 = ₹7,92,000 × 11/12 = ₹7,26,000. Therefore, option A is correct. Option D represents profit for the entire 12-month year, not for the 11 months completed before death. Exam tip: For interim profit, multiply annual profit by the fraction of the year elapsed, assuming profit accrues evenly.

Correct answer: A. Average profit of previous years

When the deed does not prescribe a specific method, the average profit of the previous few years is generally used to estimate the profit up to the partner’s date of death. Bank balance and total assets show the financial position of the business, not its profit, while cash sales alone cannot determine actual profit. Exam tip: check the partnership deed first; if it is silent, consider the previous-profit or average-profit basis.

Correct answer: A. ₹4,16,000

The profit share up to the date of death is calculated on a time basis. Therefore, the amount is ₹12,48,000 × 4/12 = ₹4,16,000. Option B represents only three months’ profit and is therefore incorrect. Exam tip: multiply the annual profit share by the number of months completed divided by 12.

Correct answer: A. To determine the estimated profit for the period elapsed up to death

When a partner dies during an accounting year, the deceased partner is entitled to a share of the profit earned up to the date of death. Therefore, the previous or estimated annual profit is apportioned according to the elapsed period, such as months divided by 12, unless the partnership agreement provides another basis. Time does not determine the profit-sharing ratio or directly value goodwill. Exam tip: identify the annual profit basis first, then apply the fraction representing the period up to death.

Correct answer: A. ₹7,00,000

Estimated profit up to death = average annual profit × fraction of the year elapsed. Therefore, ₹16,80,000 × 5/12 = ₹7,00,000. Option B represents the profit for 6 months, so it is not correct. Exam tip: Divide the annual average profit by 12 to obtain monthly profit, then multiply by the number of months elapsed.

Correct answer: A. ₹10,64,000

The profit share up to the date of death is calculated on a time basis: ₹18,24,000 × 7/12 = ₹10,64,000. Here, ₹18,24,000 is already stated to be the deceased partner’s annual share of profit, so no additional profit-sharing ratio is applied. Option B corresponds to six months, option C to eight months, and option D to ten months. Exam tip: For death during the accounting year, multiply the annual share by the number of completed months divided by 12.

Correct answer: A. यह मृत्यु की तारीख तक की अवधि के अनुमानित लाभ में उसका अनुपातिक हिस्सा होता है

The deceased partner’s share of profit is calculated for the period up to the date of death. Since the actual profit for that period may not yet be available, it is usually estimated using the previous year’s profit, sales, or another basis specified in the partnership deed. The amount is then adjusted in the deceased partner’s capital or current account, or credited to the executor’s account. Thus, taking the profit for the entire year or considering only cash receipts is incorrect. Exam tip: Always calculate the period only up to the partner’s date of death, not up to the year-end.

Correct answer: A. ₹3,92,000

Profit up to the date of death = Annual profit × fraction of the year elapsed = ₹5,88,000 × 8/12 = ₹3,92,000. Therefore, option A is correct. ₹2,94,000 represents six months’ profit, while ₹4,41,000 represents nine months’ profit. Exam tip: divide the annual profit by 12 to find monthly profit, then multiply by the number of completed months. 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. On the basis of the previous year’s profit

When interim accounts are not prepared, the deceased partner’s profit up to the date of death is generally estimated using the previous year’s profit. The previous year’s profit is apportioned according to the time elapsed and then multiplied by the deceased partner’s profit-sharing ratio. Capital, bank balance and drawings do not measure the firm’s profit, so they are not suitable bases. Exam tip: If the partnership deed specifies average profit or another basis, follow that provision.

Correct answer: D. ₹1,70,000

The firm’s estimated profit for the 2 months up to death is ₹20,40,000 × 2/12 = ₹3,40,000. Since the deceased partner’s profit-sharing ratio is 1:1, his share is ₹3,40,000 × 1/2 = ₹1,70,000. Therefore, option D is correct. Option A represents the firm’s total profit for two months, not the deceased partner’s share. Exam tip: first apply the time ratio to the annual profit, then apply the partner’s profit-sharing ratio.

Correct answer: A. Because it recognises the partner’s right to the profit earned during the period up to death

Since the partner contributed to the business up to the date of death, the partner is entitled to the proportionate share of profit earned during that period, even though the annual accounts may be prepared later. This amount is generally estimated using the previous year’s profit ratio, sales, or another agreed basis and is credited to the deceased partner’s capital account or executor’s account. Option B is incorrect because the entire year’s profit is not automatically divided equally. Exam tip: Calculate the profit share only for the period from the beginning of the accounting year up to the date of death.

Correct answer: A. ₹1,80,000

Profit estimated up to the date of death = average annual profit × fraction of the year elapsed. Therefore, ₹21,60,000 × 1/12 = ₹1,80,000. This is the estimated profit of the firm, not the deceased partner’s personal share; the partner’s profit-sharing ratio would be required to calculate that share. Exam tip: For a month-based calculation, divide the annual profit by 12 and multiply by the number of elapsed months.

Correct answer: A. The deceased partner’s proportionate share of profit earned up to the date of death

The deceased partner is credited with the share attributable to the estimated profit earned by the business up to the date of death, according to the profit-sharing ratio. Profit earned after death does not belong to the deceased partner, and cash receipts alone do not measure accounting profit. Exam tip: unless the agreement specifies otherwise, the interim profit is commonly estimated using the previous year’s profit, time ratio, or sales ratio.

Correct answer: A. ₹18,00,000

The period up to the date of death is 9 months. Assuming profit accrues evenly, estimated profit = previous year’s profit × 9/12 = ₹24,00,000 × 9/12 = ₹18,00,000. Therefore, option A is correct. ₹16,00,000 represents 8 months’ profit, while ₹20,00,000 and ₹22,00,000 correspond to 10 and 11 months, respectively. In the exam, multiply the previous year’s profit by the ratio of elapsed months to 12.

Correct answer: A. Average profit of previous years

When the partnership deed is silent, the average profit of previous years is generally used to make a reasonable estimate of profit up to the date of death. It gives a balanced indication of the firm’s normal earning capacity. Current-year sales alone do not represent profit, and cash balance and total liabilities are not measures of profit. Exam tip: The estimated profit is multiplied by the relevant time fraction and the deceased partner’s profit-sharing ratio to calculate the share.

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

The deceased partner’s share of profit earned up to the date of death is credited to his capital account because it increases the amount payable to him. This amount, along with his capital balance, goodwill share, accumulated profits and other adjustments, forms part of his total claim. Therefore, both A and R are true, and R correctly explains A. Exam tip: The profit up to the date of death is generally adjusted by debiting the Profit and Loss Suspense Account and crediting the deceased partner’s Capital Account.

Correct answer: A. ₹12,50,000

Profit up to the date of death = Estimated annual profit × elapsed months / 12. Therefore, ₹30,00,000 × 5/12 = ₹12,50,000, so option A is correct. Option C represents profit for six months, not five months. In such questions, convert the elapsed period into a fraction of the 12-month financial year.