The sum due to the retiring partner and to the legal representatives/executors (in case of death) includes the following, in addition to credit balance of his capital/current A/c, share of goodwill, gain on revaluation of assets and liabilities:
Answer & explanation
Correct answer: option 2
The correct answer is option 2- Share in accumulated profits and profits up to the date of retirement/death.
The sum due to the retiring partner and to the legal representatives/executors (in case of death) includes Share in accumulated profits and profits up to the date of retirement/death, in addition to credit balance of his capital/current A/c, share of goodwill, gain on revaluation of assets and liabilities.
The sum due to the retiring partner (in case of retirement) and to the legal representatives/ executors (in case of death) includes:
- (i) credit balance of his capital account;
- (ii) credit balance of his current account (if any);
- (iii) his share of goodwill;
- (iv) his share of accumulated profits (reserves);
- (v) his share in the gain of revaluation of assets and liabilities
- (vi) his share of profits up to the date of retirement/death;
- (vii) interest on his capital, if involved, up to the date of retirement/death; and
- (viii) salary/commission, if any, due to him up to the date of retirement/death.