Identify the correct sequence to be followed at the time of Death of Partner.

A. Calculation of gaining Ratio
B. Treatment of goodwill
C. Payment made to executor
D. Calculation of Amount transferred to Decreased Partner's Executor
E. Preparation of deceased Partner Capital Account

Choose the correct answer from the options given below:

A, B, E, D, C

The correct answer is option 2- A, B, E, D, C.

The correct sequence to be followed at the time of the death of a partner is as follows-

A: Calculation of Gaining Ratio – The gaining ratio is determined. This ratio represents the portion of the deceased partner's share that the remaining partners will take, based on their new profit-sharing ratio.

B: Treatment of Goodwill – After calculating the gaining ratio, goodwill should be addressed. This could involve either adjusting goodwill in the books or paying compensation for the goodwill to the deceased partner’s estate.

E: Preparation of Deceased Partner's Capital Account – After the goodwill, the capital account of the deceased partner is prepared. This will include calculating their share of profits up to the date of death and all other related adjustments, if applicable.

D: Calculation of Amount Transferred to Deceased Partner's Executor – Finally, after preparing the deceased partner's capital account, the amount to be transferred to the deceased partner’s executor is calculated, which may include the share of the deceased partner’s capital and profits.

C: Payment made to executor- At last payment is made to the deceased partner's executor.