Page 2 - LM DEATH OF A PARTNER

• Since, it is contemplated burdensome to close the books and outline

final a/c, for the period, the dead partner’s share of profit may be

computed on the ground of previous year’s gain (or aggregate of past

few years) or on the base of sales

How death of a partner is different from Retirement of a Partner:

Accounting treatment in the case of death is same as in the case of return

except the following:

1. The deceased partners claim is transferred to his executer’s account.

2. Normally the retirement takes place at the end of the Accounting pried but

the death may occur at any time. Hence the claim of deceased part shall also

include his share or profit or loss, interest on capital, interest on drawings if

any from the date of the last balance sheet to the date his death.

Amount due to DECEASED Partner:

Amount due to Retiring/Deceased Partner (To be credited to his capital

account)

1. Credit Blanca of his capital.

2. Credit Balance of his current account (if any).

3. Share of Goodwill. (By gaining partners)

4. Share of Reserves of Undistributed profits.

5. His share in the profit on revaluation of assets and liabilities.

6. Share in profits up to the date of Retirement/Death. (By p & L suspense A/c)

7. Interest on capital if involved.

8. Salary if any