Question

How will you compute the amount payable to a deceased partner ?

Answer 1

In case of a death, the legal executor of the deceased partner is entitled for a claim which includes his share of profit or loss, interest on capital, interest on drawings. In that case for computing the amount payable is calculated by preparing the deceased partner's capital account as follows.

$\begin{array}{cccccccc}\text{Dr}& & & & \text{Deceased Partners' Capital Account}& & & \text{Cr}\end{array}\begin{array}{cccccccc}\text{Date}& \text{Particulars}& \text{JF}& \text{Amt. (Rs)}& \text{Date}& \text{Particulars}& \text{JF}& \text{Amt. (Rs)}\\ & \text{Revaluation A/c}& & & & \text{Balance b/d}& & \\ & \text{(Loss)}& & & & & & \\ & \text{Profit and Loss}& & & & \text{Profit and Loss}& & \\ & \text{Suspense A/c}& & & & \text{Suspense A/c}& & \\ & \text{(Share of loss up to the}& & & & \text{(Share of profit up}& & \\ & \text{date of the death)}& & & & \text{to the date of}& & \\ & & & & & \text{the death)}& & \\ & & & & & \text{Goodwill}& & \\ & \text{Accumulated Losses}& & & & \text{Reserves and}& & \\ & \text{A/c}& & & & \text{Profits}& & \\ & \text{Goodwill A/c}& & & & \text{Revaluation}& & \\ & \text{(Written off)}& & & & \text{A/C(gain)}& & \\ & \text{Partner Exectuor's}& & & & & & \\ & \text{A/c(Payment due)}& & & & \text{Policy A/c}& & \\ & \text{(Balancing Figure)}& & & & \text{Interest on}& & \\ & & & & & \text{Capital A/c}& & \\ & & & & & \text{Salary A/c}& & \\ & & & & & \text{Commission}& & \\ & & & & & \text{A/c}& & \end{array}$

Note In the above capital account, the legal exectuor will be entitled for the balancing figure that is the excess of the credit side orver the debit side of the deceased partner's capital account.