Practicing Success
On which of the following bases the profit can be calculated for the retiring partner for the intervening period if he retires in the middle of the year? |
Average profit Sales Last year profit Any of these |
Any of these |
Profit can be calculated on any of the above basis. The base can be mentioned in the partnership deed or it will be mutually decided by the partners. Closing the books and preparing the final accounts for the period following the death of a partner can be a complex and time-consuming process. To simplify this procedure, the deceased partner's share of the profit can be determined using alternative methods. |