Question : Raman, Daman and Karan were partners sharing profits in the ratio of 3: 2: 1. Daman died on 30th June 2020. Raman and Karan decided to continue the business. Share of profit o loss of the deceased partner from the beginning of the year up to the date of death was to be determined on the basis of last year’s profit, which was Rs. 3,60,000. Choose the correct option
Option 1: Profit and loss account debited by Rs 30,000.
Option 2: Profit and loss account credited by Rs 30,000
Option 3: Profit and loss suspense account will be debited by Rs 30,000
Option 4: Profit and loss suspense account will be credited By Rs 30,000
Correct Answer: Profit and loss suspense account will be debited by Rs 30,000
Solution : Answer = Profit and loss suspense account will be debited by Rs 30,000
In the case of the death of a partner, the share of profit or loss of the deceased partner until the date of death is determined based on the last year's profit. To adjust this amount in the books, the Profit and Loss Suspense Account is debited by the amount representing the share of the deceased partner's profit or loss. Hence, the correct option is 3.
Question : Raman, Daman and Karan were partners sharing profits in the ratio of 3: 2: 1. Daman died on 30th June 2020. Raman and Karan decided to continue the business. Share of profit o loss of the deceased partner from the beginning of the year up to the date of death was to be
Question : Sanjay, Ajay and Karan were partners sharing profits in the ratio of 3: 2: 1. Karan died on 31st July, 2020. Sanjay and Karan decided to continue the business. Share of profit or loss of the deceased partner from the beginning of the year up to the date of death was to be
Question : Kumar, Verma and Naresh were partners in a firm sharing profit & loss in the ratio of 3: 2: 2. On 23rd January 2015 Verma died. Verma's share of profit till the date of his death was calculated at Rs.2,350.
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