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A partner’s normal annual share of profit is ₹12,48,000. The partner dies 4 months after the beginning of the financial year. What amount of profit share is payable up to the date of death?

Answer and explanation

Correct answer: ₹4,16,000

The profit share up to the date of death is calculated on a time basis. Therefore, the amount is ₹12,48,000 × 4/12 = ₹4,16,000. Option B represents only three months’ profit and is therefore incorrect. Exam tip: multiply the annual profit share by the number of months completed divided by 12.

Related tags

Partnership AccountsDeceased PartnerProfit Till DeathTime ProportionDeceased Partner’s ShareDeceased Partner S ShareReconstitution Retirement Or Death Of A PartnerAccountancy

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