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How Will You Compute the Amount Payable to a Deceased Partner? - Accountancy

Answer in Brief

How will you compute the amount payable to a deceased partner?

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Solution

The legal executer of the deceased partner is entitled for the balancing figure of the deceased partner's capital account. The balancing figure of the deceased partner's capital account is derived after posting the below mentioned items in Step 1 and Step 2.
Step 1: The following items are posted in the debit side of the deceased partner's capital account.
 a) Credit balance of the deceased partner's capital account and/or current account.
b) Deceased partner’s share of profit up to the date of his/her death.
c) Deceased partner’s share of goodwill.
d) Deceased partner’s share in accumulated reserves and profit account.
e) Deceased partner’s share in gain on revaluation of assets and liabilities.
f) Deceased partner’s share of Joint Life Policy.
g) Interest on capital, if any, up to the date of the death.
h) Salary or commission, if any, up to the date of the death.

Step 2: The following items are posted in the credit side of the deceased partner's capital account.
a) Debit balance of the deceased partner's capital account and/or current account.
b) Amount withdrawn in the form of drawings up to the date of death of the partner.
c) Interest on drawings, if any, up to the date of the death.
d) Deceased partner’s share in loss on revaluation of assets and liabilities.
e) Deceased partner’s share of loss up to the date of the death.
f) Deceased partner’s share in the accumulated losses of the firm.

The legal executor is entitled for the balancing figure that is the excess of the credit side over the debit side of the deceased partner's capital account.
                       Deceased Partner's Capital Account
Dr.                                                                                             Cr.

Date

Particulars

J.F.

Amt (Rs.)

Date

Particulars

J.F.

Amt (Rs.)

 

Revaluation A/c (Loss)

 

 

 

Balance b/d

 

 

 

Profit and Loss Suspense A/c
(Share of loss up to the date of the death)

 

 

 

Profit and Loss Suspense A/c
(Share of profit up to the date of the death)

 

 

 

 

 

 

 

Goodwill

 

 

 

Accumulated Losses A/c

 

 

 

Reserves and Profits

 

 

 

Goodwill A/c (Written off)

 

 

 

Revaluation A/c (gain)

 

 

 

Partner Executor's A/c
(Balancing Figure)

 

 

 

Joint Life Policy A/c

 

 

 

 

 

 

 

 

 

Interest on Capital A/c

 

 

 

 

 

 

Salary A/c

 

 

 

 

 

 

Commission A/c

   

 

 

 

 

 

 

   
Concept: Ascertaining the Amount Due to Retiring/Deceased Partner
  Is there an error in this question or solution?
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APPEARS IN

NCERT Class 12 Accountancy - Not-for-profit Organisation and Partnership Accounts
Chapter 4 Reconstitution of a Partnership Firm – Retirement/Death of a Partner
Exercise | Q 2 | Page 214
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