wiz-icon
MyQuestionIcon
MyQuestionIcon
2
You visited us 2 times! Enjoying our articles? Unlock Full Access!
Question

A, B and C are the partners sharing profits in the ratio 7 : 5: 4. C died on 30th June and profit for the accounting year was Rs. 48,000. How much share in profits for the period 1st April to 30th June will be credited to C's Account?

A
Rs.12,000
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
Rs.3,000Rs.3,000
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
C
Rs.18000
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D
Rs.4,000
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution

The correct option is A Rs.3,000Rs.3,000
At the time of death of a partner the firm gets reconstituted. In the reconstitution all assets and liabilities are revalued, profit sharing ratio gets revised, goodwill is raised etc. and finally the amount due to deceased partner is determined and discharged. The representative of deceased partner will be entitled to the partner's share of profit from the beginning of the year to the date of the death. This amount should be credited to his executor's account.
C's profit share = 4/16 or 1/4
Profit for the year = Rs. 48000
Profit from 1.4.2006 - 30.6.2006 = Rs. 48000 / 4
= Rs. 12000
O's share in profit till the date of death = Rs. (12000 * 1) / 4
= Rs. 3000

flag
Suggest Corrections
thumbs-up
0
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Retirement of a Partner - II
ACCOUNTANCY
Watch in App
Join BYJU'S Learning Program
CrossIcon