Accountancy Part AReconstitution of Partnership Firm: Retirement and Death

Vipul died on June 30, 2021. It is specified that the sales during th…

Vipul died on June 30, 2021. It is specified that the sales during the year 2020-21 was ₹10,00,000 and the sales from 1^st April 2021 to June 30, 2021 was ₹2,00,000. Calculate the amount of profit credited to Vipul at the time of his death, if the profit of 2020-21 was ₹2,00,000, considering previous year profit percentage as base, his share of profit is 1/4th.

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → ₹ 10,000

Profit as a percentage of sales in 2020-21 = ₹2,00,000 / ₹10,00,000 × 100 = 20%

Profit from April 1, 2021 to June 30, 2021 = 20% of ₹2,00,000 = ₹40,000

Vipul’s share = ₹40,000 × 1/4 = ₹10,000

NCERT (2026-27 edition):
Death of a Partner – “… In case, the agreement provides, that share of profit of the deceased partner will be worked out on the basis of sales, and it is specified that the sales during the year 2015-16 were Rs. 8,00,000 and the sales from April 1, 2017 to June 30, 2017 were Rs. 1,50,000 Champak’s share of profits for the period from April 1, 2017 to June 30, 2017 shall be calculated as follows.”