If the average annual profit of previous years is ₹10,20,000 and a partner dies 3 months after the beginning of the accounting year, what will be the estimated profit of the firm up to the date of death?

Correct answer: ₹2,55,000

Estimated profit up to the date of death = Average annual profit × fraction of the year elapsed = ₹10,20,000 × 3/12 = ₹2,55,000. Therefore, option A is correct. Option B corresponds to four months and option C to two months. Exam tip: Convert annual average profit into profit for the relevant period by multiplying it by months/12.