ABC Ltd. is a firm with Amit, Ankit and Arjit as partners. The profit sharing ratio is 1:1:1. Ankit retires in the middle of the year from the firm, which of the following amount will not be considered in calculation of amount due to Ankit ?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Share in Employees Provident Fund
The amount due to a retiring partner is made up of what belongs to him as a partner: his capital and current account balances, his share of goodwill, of accumulated profits, of revaluation gain and of profit up to the date of retirement, less his share of losses. The Employees Provident Fund is a liability of the firm to its employees; it is not the partners’ money, so Ankit has no share in it.
Option (2) Share in Profit & Loss Suspense Account — Included in the sum due. It carries his share of profit for the part of the year before he left.
Option (3) Share in Revaluation Loss — Included in the sum due. His share of a revaluation loss is deducted in working out what he gets.
Option (4) Share in existing accumulated reserve — Included in the sum due. Reserves are undistributed profits of the old partners and go to all of them, including Ankit.
NCERT (2026-27 edition):
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