Share of profit of deceased partner from beginning of year to date of death is usually computed using
ACapital ratio (typical) (typical)
BSacrificing ratio (typical) (typical)
CBank rate (typical) (typical) (typical)
DLast year profit prorated for the period
Answer & Solution
Correct answer: D. Last year profit prorated for the period
1. A common method (Time Basis) prorates last year's profit for the number of months till the death.
2. Alternatively the Turnover/Sales basis may be used if past-period sales data exist.
3. Both methods rely on existing trends, not on capital or sacrificing ratios.
4. Hence (C) is the standard approach.
_Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 5 "Reconstitution of Partnership (Death of Partner)", §5.2 ¶§5.2_
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