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Profit or Loss Suspense A/c

On the death ...

Question

On the death of partner, the deceased partner's executor is paid his share of profit for the relevant period. This repayment is recorded in Profit and Loss __________ Account.

A

Reserve

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B

Suspense

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C

Appropriation

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D

Adjustment

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Solution

The correct option is B
Suspense

On the death of partner, the deceased partner's executor is paid his share of profit for the relevant period. This repayment is recorded in Profit and Loss Suspense Account

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Q. On death of a partner, his executor is paid the share of profits of the dying partner for the relevant period. This payment is recorded in the Profit & Loss ______ Account.

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Q. On the death of a partner, his executor is paid the share of profits of the died partner for the relevant period. This payment is recorded in Profit & Loss _______ A/c

Q. On the death of a partner, his executor is paid the share of profits of the dying partner for the relevant period. This payment is recorded in Profit & Loss __________ A / C.

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.

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