Manav, Nath and Narayan were partners in a firm sharing profits in th…

Manav, Nath and Narayan were partners in a firm sharing profits in the ratio of 1 : 2 : 1. The firm closes its books on 31st March every year. On 30th September, 2025 Nath died.

Match List-I with List-II

List-I		List-II
(A)	There was a debit balance of Rs. 30,000 in the profit and loss account.	(I)	Nath's Capital A/c will be debited by Rs. 5100
(B)	Nath's share of profit/loss in the year of his death was to be calculated on the basis of average profit/loss of last 5 years. the average loss is Rs. 90,000.	(II)	Nath's Capital A/c will be debited by Rs. 15000
(C)	There was a Goodwill appearing in the books for Rs. 25000.	(III)	Nath's Capital A/c will be debited by Rs. 12500
(D)	There was a drawing of Nath of Rs. 85000 on which interest is to be charged at 12%.	(IV)	Nath's Capital A/c will be debited by Rs. 22,500

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → (A) - (II), (B) - (IV), (C) - (III), (D) - (I)

Nath’s share is 2/4 = 1/2. He died on 30th September, so his part of the year is 6 months (1st April to 30th September). Every item here is a deduction from his account.

(A) There was a debit balance of Rs. 30,000 in the profit and loss account. — this matches (II) Nath’s Capital A/c will be debited by Rs. 15000. An accumulated loss is shared in the profit sharing ratio.
1/2 × Rs. 30,000 = Rs. 15,000

(B) Nath’s share of profit/loss in the year of his death was to be calculated on the basis of average profit/loss of last 5 years. the average loss is Rs. 90,000. — this matches (IV) Nath’s Capital A/c will be debited by Rs. 22,500. His share of loss up to the date of death is charged to him.
Loss for 6 months = Rs. 90,000 × 6/12 = Rs. 45,000
Nath’s share = 1/2 × Rs. 45,000 = Rs. 22,500

(C) There was a Goodwill appearing in the books for Rs. 25000. — this matches (III) Nath’s Capital A/c will be debited by Rs. 12500. Existing goodwill is written off in the old ratio.
1/2 × Rs. 25,000 = Rs. 12,500

(D) There was a drawing of Nath of Rs. 85000 on which interest is to be charged at 12%. — this matches (I) Nath’s Capital A/c will be debited by Rs. 5100. Interest on drawings runs up to the date of death, 6 months.
Rs. 85,000 × 12/100 × 6/12 = Rs. 5,100

NCERT (2026-27 edition):
Ascertaining the Amount Due to Retiring/Deceased Partner – “… The following deductions, if any, may have to be made from his share: (i) debit balance of his current account (if any); (ii) his share of goodwill to be written off, if necessary; (iii) his share of accumulated losses; (iv) his share of loss on revaluation of assets and liabilities; (v) his share of loss up to the date of retirement/death; (vi) his drawings up to the date of retirement/death; (vii) interest on drawings, if involved, up to the date of retirement/death.”