Read the following passage and answer the question.
In a partnership firm, A B, and C are partners sharing profits and losses in the ratio of 3:2:1. Their capitals were of ₹1,00,000, ₹2,00,000 and ₹50,000 respectively. On August 2nd, 2021, B died. A and C decided to give the share of B to his executive on 5th August. Sales and profits for the previous year were ₹5,00,000 and ₹3,00,000 respectively, whereas the sale of the firm till the date of B's death was ₹3,00,000. Goodwill of the firm was revalued at ₹2,40,000. The firm follows the financial accounting year.
The total amount payable to B's executor would be-
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹3,40,000.
Profit of current year upto death of B = Profit of the previous year x (Current year's sale/Previous year's sale)
= 3,00,000 x (3,00,000/5,00,000)
= ₹1,80,000
B's share in profit = 1,80,000 x 2/6
= ₹60,000
Amount payable to B = Capital + Profit + Premium for goodwill
= 2,00,000 + 60,000 + 80,000
= ₹3,40,000