Calculate the share of profit or loss of the deceased partner if he retires after 4 months of the current accounting year from the partnership firm. Last year's loss is ₹90,000 and the partner's share is 1/3rd in the firm.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹10,000 (loss).
Last year loss = ₹90,000
4 month loss = 90,000 x 4/12
= ₹30,000
Deceased partner share of loss = 30,000 x 1/3
= ₹10,000
Note: In partnership accounting, it is a standard rule that when a partner retires or dies during the year, their share is calculated on a time basis using the previous year’s profit/loss as an estimate.