A, B and C were partners sharing profits and losses in the ratio of 2 : 2 : 1. Books are closed on 31st March every year. C dies on 5th November, 2018. Under the partnership deed, the executors of the deceased partner are entitled to his share of profit to the date of death, calculated on the basis of last year’s profit. Profit for the year ended 31st March, 2018 was Rs2,40,000. C’s share of profit will be :
Rs28,000
Incorrect AnswerRs32,000
Incorrect AnswerRs48,000
Incorrect AnswerExplanation:
- The partnership ratio is 2 : 2 : 1, meaning C holds a 1/5 share in profits.
- The profit for the year ending 31st March 2018 is Rs 2,40,000.
- To calculate C's share of profit up to C's death on 5th November 2018:
- First, determine the daily profit by dividing the annual profit by 365 days: Rs 2,40,000 / 365 = Rs 657.53 (approximately).
- Then, calculate the profit up to 5th November: There are 219 days from 1st April to 5th November.
- Rs 657.53 * 219 = Rs 1,44,000.
- C's share is 1/5 of Rs 1,44,000, which is Rs 28,800.
- Option 3: Rs 28,800 is the correct answer.
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By: santosh