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Which ratio is used to determine a deceased partner’s share of profit up to the date of death?

Answer and explanation

Correct answer: Old profit-sharing ratio

The deceased partner’s share of profit up to the date of death is calculated using the old profit-sharing ratio, because that ratio remains applicable until the reconstitution takes effect. The new ratio applies to the continuing partners after reconstitution, while the sacrificing and gain ratios are used for other reconstitution adjustments. Exam tip: use the old ratio for the period before death and the new ratio for the period after death.

Related tags

AccountancyPartnershipReconstitutionDeceased Partner ShareProfit Sharing RatioDeceased Partner’s ShareDeceased Partner S ShareReconstitution Retirement Or Death Of A Partner

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