Which basis is identified first to calculate a deceased partner’s share of profit up to the date of death?

Correct answer: Profit-sharing ratio

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.