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CMA Intermediate · Financial Accounting · Death of Partner

A, B and C share profits in the ratio 5:3:2. On 1 July 2026 A dies. The books at 31 March 2026 show A's capital Rs 3,00,000 and a General Reserve of Rs 1,00,000. Ignoring other items, what is the credit to A's capital account on account of General Reserve?

A is credited with Rs 50,000. The General Reserve of Rs 1,00,000 belongs to all partners in their old profit-sharing ratio of 5:3:2, so A's share is five-tenths of it. Using B's or C's fraction would give an incorrect amount.

  1. ARs 20,000
  2. BRs 30,000
  3. CRs 50,000Correct
  4. DRs 1,00,000

Explanation

General reserve is distributed among all partners in the old profit-sharing ratio. A's share = 1,00,000 x 5/10 = Rs 50,000. Rs 30,000 would be B's share and Rs 20,000 would be C's share, so using those ratios is a wrong-base error.

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