Calculate the share of profit or loss of the deceased partner if he retires after 3 months of the current accounting year from the partnership firm from the following information-
Share of deceased partner in firm= 1/4th
Profits for the last few years are as follows-
₹1,75,000(2018)
₹1,00,000(2019)
₹75,000(2020)
₹50,000(2021)
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹6,250.
Average profit = (1,75,000 + 1,00 000 + 75,000 + 50,000)4
= 4,00,000/4
= ₹1,00,000
Profit for the current year 3 months on basis of average profit = 1,00,000*3/12
= ₹25,000
Deceased partner share = 25,000*1/4
= ₹6,250