If a firm’s estimated annual profit is ₹9,00,000 and a partner dies after completing 8 months of the accounting year, what amount of estimated profit should be considered up to the date of death?

Correct answer: ₹6,00,000

Profit up to the date of death = Estimated annual profit × fraction of the year elapsed = ₹9,00,000 × 8/12 = ₹6,00,000. This calculation assumes that profit accrues uniformly throughout the year. Therefore, option A is correct; the relevant fraction is 8/12, not 8/10. Exam tip: For profit up to the date of death, multiply the estimated annual profit by the number of elapsed months divided by 12.