If the average annual profit for the last 3 years is ₹6,00,000 and a partner dies 4 months after the beginning of the accounting year, what profit is estimated up to the date of death?

Correct answer: ₹2,00,000

The profit up to the date of death is estimated using the time ratio. Therefore, estimated profit = ₹6,00,000 × 4/12 = ₹2,00,000. Option B incorrectly applies a three-month proportion instead of four months. Exam tip: Treat the average annual profit as the profit for 12 months and multiply it by the number of months completed up to the date of death.