A firm earns an annual profit of ₹16,20,000. If a partner dies after 4 months of the financial year, what profit is attributable up to the date of death on a time basis?

Correct answer: ₹5,40,000

Profit attributable to the period up to death = Annual profit × 4/12 = ₹16,20,000 × 4/12 = ₹5,40,000. Hence, option A is correct. Option B represents three months’ profit, option C represents six months’ profit, and option D represents two months’ profit. Exam tip: For profit up to the date of death, multiply the annual profit by the elapsed months divided by 12.