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The profit of the previous accounting year was ₹84,000. A partner died 9 months after the beginning of the current accounting year. Based on the previous year’s profit, what is the estimated profit up to the date of death?

Answer and explanation

Correct answer: ₹63,000

The estimated profit up to the date of death is calculated in proportion to the elapsed time: ₹84,000 × 9/12 = ₹63,000. Therefore, option A is correct. ₹42,000 represents profit for only 6 months, whereas the relevant period is 9 months. In exams, multiply the previous year’s profit by the number of months elapsed divided by 12.

Related tags

AccountancyPartnership AccountsDeath Of PartnerProfit EstimationTime ProportionDeceased Partner’s ShareDeceased Partner S ShareReconstitution Retirement Or Death Of A Partner

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