Question

A, T and N are partners sharing profits in the ratio of 3: 2: 1 N dies on 31st May 2014. Sales for the year 2013-2014 amounted to TZS 4,00,000 and the profit on sales is TZS 60,000. Accounts are closed on 31 March every year. Sales from 1st April 2014 to 31st May 2014 is ` 1,00,000 Calculate the deceased partner’s share in the profit up to the date of death?

Answer 1

The deceased partner N's share in the profit up until the date of death on 31st May 2014 is TZS 2,500, calculated from the sales and profit figures provided and based on N's share in the partnership.

Step-by-step explanation:

To calculate the deceased partner’s share in the profit up to the date of death, we need to follow these steps:

1. First, calculate the profit for the period from April 1, 2014, to May 31, 2014. Given that the total sales for the year 2013-2014 are TZS 4,00,000 with a total profit of TZS 60,000, we can assume the same profit ratio for the next two months. The sales for April 1, 2014, to May 31, 2014, are TZS 1,00,000. Therefore, the profit for these two months would be (1,00,000 / 4,00,000) * 60,000 = TZS 15,000.
2. Next, calculate N’s share based on the profit-sharing ratio of 3:2:1. N’s ratio is 1, so the share would be (1 / 6) of TZS 15,000 which equals TZS 2,500.

The deceased partner N’s share in the profit up to the date of death is therefore TZS 2,500.