If the previous year’s profit was ₹1,20,000 and the partner died 6 months into the current year, what will be the estimated profit up to the date of death?

Correct answer: ₹60,000

The estimated profit up to the date of death is calculated in proportion to the time elapsed. Thus, estimated profit = ₹1,20,000 × 6/12 = ₹60,000. ₹1,20,000 represents the profit for the full year, whereas 6 months represent half of the year. In such questions, always apply the time-proportion method.