Mohit, Sohan and Rahul are partners sharing profits in the ratio of 2:2:1. Sohan died on 30th September 2025. According to the deed, his legal representatives are entitled to:
(a) Balance in Capital Account: Rs. 60,000
(b) His Share of goodwill is valued at: Rs. 19,200
(c) Share in profits up to the date of death: Rs. 3,200
(d) Interest on capital account @ 12% p.a.
Amount payable to Sohan's Executors A/c will be:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 86,000
The executors of a deceased partner receive everything the partner was entitled to up to the date of death. That includes interest on capital for the part of the year he was alive, since the deed allows it.
Balance in Capital Account = Rs. 60,000
Share of goodwill = Rs. 19,200
Share in profits up to the date of death = Rs. 3,200
Interest on capital for 6 months (April 01 to September 30, 2025) = Rs. 60,000 × 12/100 × 6/12 = Rs. 3,600
Amount payable to Sohan’s Executors A/c = Rs. 60,000 + Rs. 19,200 + Rs. 3,200 + Rs. 3,600 = Rs. 86,000
Leaving out the interest on capital gives Rs. 82,400; the interest runs only for the six months Sohan was a partner during the year.
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