In case of deceased partner the share of profits til the date of death is calculated as ____________.

(last years profit or avg profit of past few years ) x proportionate period (from b/s date to date of death) x share of deceased partner

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

average of last 5year profit x proportionate period (from b/s date to date of death) x share of deceased partner

No worries! We‘ve got your back. Try BYJU‘S free classes today!

(last years profit or avg profit of past few years ) x share of deceased partner

No worries! We‘ve got your back. Try BYJU‘S free classes today!

None of above

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is D (last years profit or avg profit of past few years ) x proportionate period (from b/s date to date of death) x share of deceased partner
As it is considered cumbersome to prepare final accounts during death and since Death is natural and don't have any specified time frame , the business activities might have earned some profit from the B/s Date till date of death .
Hence his proportionate time frame profit is calculated on either last years profit or average of past few years as agreed upon.

Suggest Corrections

Similar questions

Q. Suppose partner A dies after 3 month from the date of B/s admission ,his share in profits was 1/4.
it was decided to calculate his share of profits till death on last years profit Rs. 10000.
calculate profit share of deceased partner share of profit till the date of death.

A, B and C are partners in a firm whose books are closed on 31st March each year. C died on 30th September, 2009 and according to the agreement, the share of profit of a deceased partner up to the date of the death is to be calculated on the basis of the average profits for the last four years. The net profits for the last 4 years have been 2006 : Rs. 16,000; 2007 : Rs. 12,000; 2008 : Rs. 1,000 (loss) and 2009 : Rs. 23,000. Calculate C’s share of profits upto the date of death.

Q. The executors of the deceased partner are entitled to a share of profit earned by the firm from the date of last balance sheet and to the date of death. Which of the entry will be passed for this purpose? (Name of the deceased partner was Mr.X)

Q. Akhil, Nikhil and Sunil were partners sharing profits and losses equally. Following was their Balance Sheet as at 31st March, 2018:

Liabilities		₹	Assets	₹
Trade Creditors		40,000	Building	2,00,000
General Reserve		45,000	Plant and Machinery	80,000
Capital A/cs:			Stock	35,000
Akhil	1,95,000		Debtors	80,000
Nikhil	1,20,000		Cash at Bank	85,000
Sunil	80,000	3,95,000
		4,80,000		4,80,000

Sunil died on 1st August, 2018. The Partnership Deed provided that the executor of a deceased partner was entitled to:
(a) Balance of Partners' Capital Account and his share of accumulated reserve.
(b) Share of profits from the closure of the last accounting year till the date of death on the basis of the profit of the preceding completed year before death.
(c) Share of goodwill calculated on the basis of three times the average profit of the last four years.
(d) Interest on deceased partner's capital @ 6% p.a.
(e) ₹ 50,000 to be paid to deceased's executor immediately and the balance to remain in his Loan Account.
Profits and Losses for the preceding years were: 2014-15 − ₹ 80,000 Profit; 2015-16 − ₹ 1,00,000 Loss; 2016-17 − ₹ 1,20,000 Profit; 2017-18 − ₹ 1,80,000 Profit.
Pass necessary Journal entries and prepare Sunil's Capital Account and Sunil's Executor Account.

Ram, Manohar & Joshi were partners in a firm. Joshi died on 28th February. His share in profits from the closure of the last accounting year ended 31st December till the date of death was to be calculated on the basis of avg. of 3 completed years of profits before death. Profits of the last 3 years were 7000, 8000 & 9000 respectively. Calculate Joshi`s share of profits.

Join BYJU'S Learning Program