Deceased Partner’s Share

Revaluation loss is debited to the partners’ capital accounts in their old profit-sharing ratio. Therefore, the deceased partner’s share of the loss is debited to the account and reduces its balance. A revaluation profit would increase the balance, not a loss. Exam tip: revaluation profit is credited, whereas revaluation loss is debited.

The deceased partner’s share in goodwill is calculated as: Total goodwill × Share = ₹1,80,000 × 1/9 = ₹20,000. Therefore, option A is correct. The nearby distractor ₹18,000 would represent 1/10 of the goodwill, not 1/9. Exam tip: To find a partner’s goodwill share, multiply the firm’s total goodwill by the partner’s profit-sharing fraction.

To estimate the profit earned up to the date of death in the current year, profit is apportioned in the ratio of the elapsed period to the full accounting period. This is based on the assumption that profit accrues over time. Changes in capital, stock, or bank balance are not the reason for using the time ratio. Exam tip: For the deceased partner’s profit share, form the time ratio using the period from the beginning of the year to the date of death against the complete profit period.

The deceased partner is entitled to the reserve according to the profit-sharing ratio. Therefore, the amount = ₹45,000 × 2/9 = ₹10,000. Dividing ₹45,000 by 9 gives ₹5,000, and multiplying it by 2 gives ₹10,000. Exam tip: To calculate a partner’s share in a reserve, multiply the total reserve by that partner’s ratio share.

A deceased partner is generally entitled to a share of the profit earned up to the date of death. Expenses incurred after that date relate to the period in which the partner was no longer associated with the firm, so they are excluded from calculating the partner’s share. Option B is incorrect because some expenses may involve cash payments. Exam tip: Link the deceased partner’s profit entitlement specifically to the period ending on the date of death.

The partner’s share is 1/6 of ₹66,000: ₹66,000 ÷ 6 = ₹11,000. Therefore, option A is correct.

The amount due to the deceased partner’s legal representatives is determined after adjusting items such as capital, current account balance, goodwill, revaluation, and the partner’s share of profit up to the date of death. Accurate calculation ensures a fair settlement and prevents disputes between the continuing partners and the legal representatives. Increasing sales or stock is unrelated to this determination. In an examination, remember to deduct drawings, losses, and other relevant adjustments while calculating the amount due.

The deceased partner is entitled to the share of profit earned up to the date of death according to the pre-existing profit-sharing ratio. Therefore, identifying that ratio is the first essential basis of the calculation. Bank balance, stock and sales are financial particulars of the business, but they do not directly determine the partner’s share of profit. Exam tip: Profit up to the date of death is generally calculated as estimated profit for the period multiplied by the deceased partner’s profit-sharing ratio.

The deceased partner is entitled to a share of accumulated profits up to the date of death, so it is credited to the capital account. Future or post-death profits are excluded. Exam tip: include only items relating up to the death date.

Accumulated profits, such as a general reserve or a credit balance in the Profit and Loss Account, are credited to the partners’ capital accounts in their old profit-sharing ratio. Therefore, the deceased partner’s capital account increases, and this amount forms part of the total amount payable to the deceased partner’s estate. Accumulated losses have the opposite effect and are debited. Exam tip: remember that profits are credited and losses are debited.

Total amount = capital + share of goodwill = ₹75,000 + ₹15,000 = ₹90,000. Therefore, option A is correct. ₹85,000 and ₹80,000 are lower because they understate the addition by ₹5,000 and ₹10,000 respectively. In the examination, add only the items specified in the question because no other adjustment is given here.

A partner is entitled only to the profit earned during the period in which he or she was a partner. Therefore, the deceased partner’s estimated share of profit up to the date of death is credited to the capital account, whereas profit earned after death belongs to the continuing or new partners. Option B is incorrect because profit up to the date of death can be estimated using past profit, sales, or time basis. Exam tip: Adjust the deceased partner’s profit share only up to the date of death.

On a time basis, estimated profit = previous year’s annual profit × the fraction of the year completed up to death. Therefore, ₹1,92,000 × 5/12 = ₹80,000. The annual profit is apportioned for 5 out of 12 months. In such questions, remember to divide the elapsed months by 12.

The deceased partner is credited with his or her share of goodwill because the partner contributed to the firm’s reputation and earning capacity. This credit is added to the partner’s capital or current account and therefore increases the final amount payable. Hence, option A is correct; goodwill adjustment does not directly increase expenses, losses or debt. Exam tip: While calculating the amount due to a deceased partner, include the capital balance, share of goodwill, profit or loss adjustments and other entitled items.

The deceased partner is entitled to the reserve in proportion to his or her profit-sharing ratio. Calculation: ₹54,000 × \(\frac{1}{9}\) = ₹6,000. Therefore, option A is correct. ₹9,000 would represent \(\frac{1}{6}\) of the reserve, not \(\frac{1}{9}\). Exam tip: To find a partner’s share in a reserve, multiply the total reserve by that partner’s profit-sharing fraction.

The amount due is determined through the deceased partner’s capital account, and cash or bank is used for immediate settlement. An executor’s loan account is required only when the amount is not paid immediately and remains outstanding. Therefore, it is not necessary when payment is made at once. Exam tip: whenever the question mentions ‘immediate payment’, remember that no executor’s loan account is opened.

The deceased partner’s share of profit = Total profit × Profit-sharing ratio = ₹1,26,000 × 2/7 = ₹36,000. Therefore, option A is correct. Divide ₹1,26,000 by 7 to get ₹18,000, then multiply by 2. In such questions, always multiply the total profit by the partner’s fraction.

The deceased partner’s share of goodwill is calculated as ₹1,44,000 × 1/12. Thus, ₹1,44,000 ÷ 12 = ₹12,000. This amount is considered while adjusting the deceased partner’s Capital or Current Account. In such questions, multiply the total goodwill by the partner’s share fraction.

Revaluation loss relates to the period during which the deceased partner was a member of the firm. Therefore, it is distributed among the old partners in their old profit-sharing ratio, and the deceased partner’s share of the loss is deducted from the amount due to him or her. The idea that a partner shares only profits is incorrect because partners share both profits and losses. Exam tip: Profits, losses, and revaluation results up to the date of death or retirement are generally distributed among the old partners in the old ratio.

The deceased partner’s capital and their share of accumulated profits are added to determine the amount credited to the partner’s account. Thus, total amount = ₹1,20,000 + ₹18,000 = ₹1,38,000. The option ₹1,28,000 results from an incorrect addition. In the exam, identify each adjustment separately before calculating the final amount.

The deceased partner’s share of profit is generally estimated for the period from the beginning of the current accounting year up to the date of death. The amount is usually calculated on a time basis using the previous year’s profit or average profit. Option B is incorrect because it relates to the period after death. In exams, remember that profit is apportioned only up to the date of death.

The deceased partner’s share of profit = Total profit × Partner’s fraction = ₹84,000 × \(\frac{3}{14}\). Dividing ₹84,000 by 14 gives ₹6,000, and multiplying by 3 gives ₹18,000. Therefore, option A is correct. As an exam tip, divide by the denominator first and then multiply by the numerator to reduce calculation errors.

Proper accounting includes adjustments for the deceased partner’s capital and current accounts, goodwill, revaluation profit or loss, accumulated profits, and the profit or loss up to the date of death. This ensures the correct determination and settlement of the amount payable to the deceased partner’s legal heirs. An automatic increase in sales, profit, or stock value is not a consequence of this accounting. Exam tip: focus on the accurate settlement of the deceased partner’s claim.

The deceased partner’s share in the reserve = ₹1,20,000 × \(\frac{5}{100}\) = ₹6,000. Therefore, option A is correct. ₹5,000 is not the result of calculating 5% of ₹1,20,000. In the exam, multiply the total amount by the percentage and divide by 100.

The balance of the deceased partner’s capital account is included in determining the amount payable to the partner’s estate. Other adjustments may include the partner’s share of goodwill, revaluation profit or loss, accumulated profits, and profit up to the date of death. Future sales or future income do not form part of the deceased partner’s final settlement. Exam tip: remember that the final amount includes the capital balance along with the partner’s accrued rights and necessary adjustments.