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CMA Intermediate · Financial Accounting · Death of Partner

X, Y and Z share profits 3:2:1. Z dies on 30 September 2026. Profit for the year ended 31 March 2026 was Rs 3,60,000, and profit for 2026-27 is to be estimated on the basis of last year's profit, accruing evenly. What amount is credited to Z's capital account as share of profit up to death?

Z's share is Rs 30,000. Profit up to death for six months is Rs 1,80,000 (half of Rs 3,60,000), and Z's one-sixth share of this equals Rs 30,000. Using a full year's profit would wrongly give Rs 60,000.

  1. ARs 30,000Correct
  2. BRs 60,000
  3. CRs 10,000
  4. DRs 1,80,000

Explanation

Profit for 6 months = 3,60,000 x 6/12 = 1,80,000. Z's share is 1/6 = 30,000. The figure of Rs 60,000 is Z's share of a full year's profit, which ignores time apportionment. Rs 1,80,000 is the whole firm's profit for six months.

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