Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

A, B and C are partners in a firm sharing profit/loss in the ratio of 2 : 2 : 1. On March 31, 2019, C died. Accounts are closed on Dec., 31 every year. The sales for the year 2018 was Rs6,00,000 and the profits were Rs 60,000. The sales for the period from Jan. 1, 2019 to March 31, 2019 were 2,00,000. The share of deceased partner till his death in the current year's profits on the basis of sales is :

Options:

₹4000

₹3000

₹5000

₹20000

Correct Answer:

₹4000

Explanation:

Profit on sales of year 2018 =60,000/6,00,000*100=10%
Profit on sales for period Jan 1, 2019 to March 21, 2019 = 10/100*2,00,000=20,000
Share of C in profits=1 /5*20,000=4,000