What will be the share of a deceased partner, whose ratio was 1/4, if the turnover in the year of death till the date of death was ₹8,00,000 and in the previous year was ₹20,00,000? Profit in the previous year was ₹4,00,000.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → ₹40,000
When the deceased partner’s share of profit is worked out on the basis of turnover (sales), the profit is first expressed as a rate on the previous year’s turnover and then applied to the turnover up to the date of death.
Rate of profit on turnover (previous year) = ₹4,00,000 / ₹20,00,000 × 100 = 20%
Profit up to the date of death = ₹8,00,000 × 20% = ₹1,60,000
Deceased partner’s share = ₹1,60,000 × 1/4 = ₹40,000
₹1,60,000 is the firm’s profit for the period, not the partner’s share; it must still be multiplied by 1/4.
NCERT (2026-27 edition): |