AccountancyCBSE Class 12 · Reconstitution of a Partnership Firm – Retirement/Death of a Partner

Deceased Partner's Share of Profit and Executor's Account: Class 12 Methods

Updated 15 October 2026 · Fact-checked

A partner who dies mid-year gets his share of profit up to the date of death. It is estimated on a time basis (base profit × months ÷ 12) or a sales basis (last year's profit rate × sales till death), credited to his capital through Profit and Loss Suspense, and paid via his Executor's Account.

Estimate profit only up to the date of death, then follow the chain: Suspense to Capital to Executor's A/c to heirs.

Illustration drawn for QuestionBuddy.

Understand Deceased Partner's Share of Profit and Executor's Account

Why estimate? When a partner dies during the year, the firm's books are not closed on that date. But his heirs are entitled to his share of profit up to the date of death. So the profit is estimated.

1. Time basis. Assumes profit is earned evenly through the year.

Share = Base profit × months from the start of the year to death ÷ 12 × his share.
Base profit: last year's profit, or the average of a stated number of past years, as the question says.

2. Sales (turnover) basis. Assumes profit moves with sales.

Rate of profit = last year's profit ÷ last year's sales × 100.
Profit up to death = sales from the start of the year to the date of death × rate.
Share = that profit × his share.

Use it when sales are seasonal or the question gives sales figures.

Entry. Profit and Loss Suspense A/c Dr; To Deceased Partner's Capital A/c. (The suspense account is a temporary account; it is closed when the year's actual profit is known.) Some questions ask that it be debited to the continuing partners in the gaining ratio instead; follow the question.

Deceased partner's capital account. Credit: opening capital, share of reserves and accumulated profits, revaluation profit, share of goodwill, share of profit till death, interest on capital (if allowed). Debit: drawings, interest on drawings, revaluation loss, share of accumulated losses. Balance is transferred: Deceased Partner's Capital A/c Dr; To Executor's A/c.

Executor's Account. It is the account of the person entitled to receive the deceased partner's dues. It is credited with the balance transferred and with interest on the unpaid amount; it is debited with payments. If dues are not settled, Section 37 of the Indian Partnership Act, 1932 lets the legal representatives claim either interest at 6% p.a. on the amount due or the share of profit earned by using that amount, as they choose. Questions usually state the interest rate agreed.

Deceased Partner's Share of Profit and Executor's Account: key facts

Time basis: Base profit × months to death/12 × deceased partner's share; Base: last year's profit or average profit, as given.
Rate of profit (sales basis): Last year's profit ÷ last year's sales × 100
Sales basis: Sales up to death × rate of profit × deceased partner's share
Amount due to executor: Capital + reserves + revaluation profit + goodwill + profit till death + interest on capital − drawings − losses; From the deceased partner's capital account.
Section 37 option: 6% p.a. interest on the amount due, or the share of profit earned with it; At the option of the legal representatives.

How to answer Deceased Partner's Share of Profit and Executor's Account questions

Find the period first: count the months from the start of the accounting year to the date of death.

1Count months from 1st April (or the given year start) to the date of death.
2Pick the basis named in the question; if sales figures are given, use the sales basis.
3Compute the share and pass Profit and Loss Suspense A/c Dr To Deceased Partner's Capital A/c.
4Prepare the deceased partner's capital account with all credits and debits.
5Transfer the balance to the Executor's Account; add interest on unpaid amounts year by year.
6Close the executor's account when the last payment is made.

Deceased Partner's Share of Profit and Executor's Account in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Time basis versus sales basis

Suppose a firm sells school uniforms, so most of its sales happen in April, May and June. Last year it earned a profit of ₹3,00,000 on sales of ₹15,00,000. One of the three equal partners dies on 30th June; sales from 1st April to 30th June this year were ₹9,00,000.

Compute his share of profit by both bases and say which is fairer to his family.

Try it first, then show the solutionSolution

Time basis: 3,00,000 × 3/12 × 1/3 = ₹25,000.
Rate of profit = 3,00,000 ÷ 15,00,000 = 20%.
Sales basis: 9,00,000 × 20% × 1/3 = ₹60,000.

Answer: Time basis gives ₹25,000; sales basis gives ₹60,000. Because the business is seasonal and most profit is earned in the first quarter, the sales basis reflects the profit actually earned before his death and is fairer to his family.

Memory hook: Even year: use time; lumpy year: use sales.

Tricks to remember Deceased Partner's Share of Profit and Executor's Account

Short memory aids. Say each one aloud once, then use it on a question the same day.

T × S × M/12
Time basis = Total profit × Share × Months/12.
Use it when: Quick time-basis sums.
Rate from last year, sales from this year
Sales basis borrows last year's profit rate and applies it to this year's sales till death.
Use it when: Sales-basis sums.
Suspense waits for the real profit
Profit and Loss Suspense holds the estimate until the actual year's profit is known.
Use it when: Journal entry.

Deceased Partner's Share of Profit and Executor's Account: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Time basis on last year's profit · 1 mark · MCQBoard level

D, a partner with a 1/4 share, died on 30th June 2025. The firm's profit for the year ended 31st March 2025 was ₹1,20,000. His share of profit till death on the time basis is:
(a) ₹30,000
(b) ₹7,500
(c) ₹10,000
(d) ₹2,500

Try it first, then show the solutionSolution

Months from 1st April to 30th June = 3.
1,20,000 × 3/12 × 1/4 = ₹7,500.

Answer: (b) ₹7,500

Example 2: Average profit basis with entry · 3 marks · Short answerBoard level

A, B and D share profits 2 : 1 : 2. D died on 31st August 2025. His share of profit till death is to be based on the average profit of the last three years: ₹90,000, ₹1,20,000 and ₹1,50,000. Calculate it and pass the entry. (3 marks)

Try it first, then show the solutionSolution

Average profit = 3,60,000 ÷ 3 = ₹1,20,000.
Months = 5 (April to August); D's share = 2/5.
1,20,000 × 5/12 × 2/5 = ₹20,000. Profit and Loss Suspense A/c Dr 20,000 To D's Capital A/c 20,000.

Answer: D's share = ₹20,000; Profit and Loss Suspense A/c Dr 20,000 To D's Capital A/c 20,000.

Example 3: Sales basis · 3 marks · Short answerHarder board level

R, a partner with a 1/3 share, died on 30th September 2025. Last year's sales were ₹10,00,000 and profit ₹1,50,000. Sales from 1st April 2025 to 30th September 2025 were ₹6,00,000. Calculate R's share of profit on the sales basis. (3 marks)

Try it first, then show the solutionSolution

Rate of profit = 1,50,000 ÷ 10,00,000 = 15%.
Profit to death = 6,00,000 × 15% = ₹90,000.
R's share = 90,000 × 1/3 = ₹30,000.

Answer: R's share of profit = ₹30,000.

Example 4: Interest on the amount due to the executor · 3 marks · Short answerHarder board level

The amount due to the executor of a partner who died on 30th June 2025 was ₹1,80,000. ₹80,000 was paid on 1st July 2025, and the balance is to be paid on 30th June 2026 with interest at 10% p.a. Prepare the Executor's Account up to 31st March 2026. (3 marks)

Try it first, then show the solutionSolution

Cr: transfer from capital ₹1,80,000. Dr: Bank ₹80,000.
Interest on 1,00,000 from 1st July 2025 to 31st March 2026 = 1,00,000 × 10% × 9/12 = ₹7,500 (Cr).
Balance c/d = 1,80,000 + 7,500 − 80,000 = ₹1,07,500.

Answer: Executor's Account: Cr 1,80,000 and interest 7,500; Dr Bank 80,000; balance c/d ₹1,07,500 on 31st March 2026.

Example 5: Amount payable to the executor · 6 marks · Long answerHOTS / competency

D was a partner with a 1/5 share. He died on 30th June 2025. On 1st April 2025 his capital was ₹1,00,000; the General Reserve was ₹1,00,000. On his death: revaluation showed a profit of ₹30,000; the firm's goodwill was valued at ₹1,50,000; his share of profit till death is on the time basis on last year's profit of ₹2,40,000; the deed allows interest on capital at 6% p.a.; his drawings till death were ₹8,000. Prepare D's Capital Account to find the amount payable to his executor. (6 marks)

Try it first, then show the solutionSolution

Credits: capital 1,00,000; General Reserve 1/5 × 1,00,000 = 20,000; revaluation 1/5 × 30,000 = 6,000; goodwill 1/5 × 1,50,000 = 30,000.
Profit till death = 2,40,000 × 3/12 × 1/5 = ₹12,000; interest on capital = 1,00,000 × 6% × 3/12 = ₹1,500.
Debit: drawings 8,000.
Balance = 1,00,000 + 20,000 + 6,000 + 30,000 + 12,000 + 1,500 − 8,000 = ₹1,61,500, transferred to D's Executor's A/c.

Answer: Amount payable to D's executor = ₹1,61,500.

Example 6: Sales basis and the reason to prefer it · 3 marks · Short answerHOTS / competency

S, a partner with a 1/4 share, died on 31st July 2025. Last year's sales were ₹8,00,000 and profit ₹1,20,000. Sales from 1st April to 31st July 2025 were ₹3,00,000. (i) Calculate S's share of profit on the sales basis. (ii) When is this basis fairer than the time basis? (3 marks)

Try it first, then show the solutionSolution

Rate = 1,20,000 ÷ 8,00,000 = 15%; profit to death = 3,00,000 × 15% = 45,000.
S's share = 45,000 × 1/4 = ₹11,250.
Fairer when sales (and so profit) are uneven through the year, for example in seasonal businesses.

Answer: (i) ₹11,250. (ii) When sales are seasonal or uneven, since the time basis assumes profit is earned evenly through the year.

Where students lose marks in Deceased Partner's Share of Profit and Executor's Account

The slips examiners see most often, and what to write instead.

Mistake: Counting months from January
Thinking of the calendar year.
Wrong working
Death on 30th June: 6 months.
Right working
Year starts 1st April: 3 months.
Do this: Count from the first day of the firm's accounting year.
Usually costs: 1-2 marks.
Mistake: Applying this year's sales to the full-year profit
Mixing up the two bases.
Wrong working
Share = 1,50,000 × 6/12 × 1/3.
Right working
Share = 6,00,000 × 15% × 1/3 = 30,000.
Do this: Sales basis: rate × sales till death.
Usually costs: 2 marks.
Mistake: Crediting the share of profit to the executor directly
Skipping the capital account.
Wrong working
P&L Suspense A/c Dr To D's Executor's A/c
Right working
P&L Suspense A/c Dr To D's Capital A/c; later the capital balance goes to the executor.
Do this: All dues collect in the capital account first.
Usually costs: 1 mark.
Mistake: Charging interest on the whole amount after a part payment
Ignoring the payment.
Wrong working
Interest on 1,80,000 for 9 months.
Right working
Interest on the unpaid 1,00,000 for 9 months = 7,500.
Do this: Interest runs only on the outstanding balance.
Usually costs: 1 mark.

Exam tips

Write the period explicitly: '1st April 2025 to 30th June 2025 = 3 months'.
If a question gives both profit and sales, check which basis it asks for.
In capital account questions, list credits in a fixed order so nothing is missed.
This topic is asked as 1-mark MCQs, 3-mark calculations and inside 6-mark death questions.

Practice questions on Deceased Partner's Share of Profit and Executor's Account

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
The deceased partner's share of profit till the date of death is debited to:
(a) Profit and Loss Appropriation Account
(b) Profit and Loss Suspense Account
(c) Executor's Account
(d) Revaluation Account
Hint
A temporary account.
Answer
(b) Profit and Loss Suspense Account
Q2 · 1 mark · MCQBoard level
Under Section 37 of the Indian Partnership Act, if a deceased partner's dues are not settled, his legal representatives may claim interest at:
(a) 5% p.a.
(b) 6% p.a.
(c) 9% p.a.
(d) 12% p.a.
Hint
Same as the Act's rate on loans.
Answer
(b) 6% p.a. (or, at their option, the share of profit earned with the unpaid amount)
Q3 · 3 marks · Short answerBoard level
M, a partner with a 1/3 share, died on 31st July 2025. Last year's profit was ₹72,000. Calculate his share of profit till death on the time basis and pass the entry. (3 marks)
Hint
4 months.
Answer
72,000 × 4/12 × 1/3 = ₹8,000. Profit and Loss Suspense A/c Dr 8,000 To M's Capital A/c 8,000.
Q4 · 3 marks · Short answerHarder board level
N, with a 2/5 share, died on 31st December 2025. His share of profit is to be based on the average profit of the last two years, ₹80,000 and ₹1,00,000. Calculate it. (3 marks)
Hint
9 months.
Answer
Average = ₹90,000; 90,000 × 9/12 × 2/5 = ₹27,000.
Q5 · 3 marks · Short answerHarder board level
Last year's sales were ₹12,00,000 and profit ₹2,40,000. A partner with a 3/10 share died on 31st October 2025; sales from 1st April to 31st October 2025 were ₹5,00,000. Calculate his share of profit on the sales basis. (3 marks)
Hint
Rate 20%.
Answer
Rate = 20%; profit to death = 5,00,000 × 20% = 1,00,000; share = 1,00,000 × 3/10 = ₹30,000.
Q6 · 3 marks · Short answerHarder board level
A partner with a 1/4 share died on 30th June 2025. Sales from 1st April to 30th June 2025 were 25% higher than the ₹4,00,000 achieved in the same period last year. The rate of profit on sales is 10%. Calculate his share of profit till death. (3 marks)
Hint
Sales this year first.
Answer
Sales = 4,00,000 × 125% = ₹5,00,000; profit = 50,000; share = 50,000 × 1/4 = ₹12,500.
Q7 · 4 marks · Short answerHarder board level
The amount due to a deceased partner's executor is ₹2,00,000. It is paid in two equal yearly instalments with interest at 10% p.a. on the unpaid balance, the first instalment one year after death. Calculate each payment and the total interest. (4 marks)
Hint
Interest on 2,00,000 in year 1, on 1,00,000 in year 2.
Answer
Year 1: 1,00,000 + interest 20,000 = ₹1,20,000. Year 2: 1,00,000 + interest 10,000 = ₹1,10,000. Total interest ₹30,000.
Q8 · 1 mark · Assertion-reasonHarder board level
Assertion (A): A deceased partner's share of profit up to the date of death is credited to his capital account.
Reason (R): He remained a partner until his death and is entitled to the profit earned up to then.
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true.
Hint
Entitlement till death.
Answer
(a) Both A and R are true, and R is the correct explanation of A.
Q9 · 6 marks · Long answerHOTS / competency
P, with a 1/3 share, died on 31st August 2025. His capital on 1st April 2025 was ₹2,00,000. General Reserve stood at ₹60,000; goodwill was valued at ₹1,20,000; revaluation showed a loss of ₹15,000; last year's profit was ₹1,80,000 (time basis); his drawings were ₹12,000. Calculate the amount payable to his executor. (6 marks)
Hint
Revaluation loss is a debit.
Answer
Credits: capital 2,00,000; reserve 20,000; goodwill 40,000; profit till death 1,80,000 × 5/12 × 1/3 = 25,000. Debits: revaluation loss 5,000; drawings 12,000. Amount payable = 2,00,000 + 20,000 + 40,000 + 25,000 − 5,000 − 12,000 = ₹2,68,000.
Q10 · 3 marks · Short answerHOTS / competency
A partner with a 1/4 share was credited with ₹15,000 as his share of profit till death on the time basis. Last year's profit was ₹1,80,000 and the year starts on 1st April. On what date did he die? (3 marks)
Hint
Solve for months.
Answer
15,000 = 1,80,000 × m/12 × 1/4, so m = 4 months: he died on 31st July.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.Name the two bases for a deceased partner's share of profit.Show answer
Time basis and sales (turnover) basis.
2.Which account is debited for the estimated share of profit?Show answer
Profit and Loss Suspense Account.
3.Last year's profit ₹60,000, share 1/2, death on 30th September. Time-basis share?Show answer
60,000 × 6/12 × 1/2 = ₹15,000.
4.Where is the deceased partner's capital balance transferred?Show answer
To his Executor's Account.
5.Which section of the Partnership Act gives legal representatives the interest option?Show answer
Section 37.

Deceased Partner's Share of Profit and Executor's Account: frequently asked questions

How is a deceased partner's share of profit calculated in Class 12?

On the time basis (base profit × months to death ÷ 12 × share) or the sales basis (sales till death × last year's profit rate × share), as the question directs.

What is the Profit and Loss Suspense Account?

A temporary account debited with the estimated share of profit of a deceased (or retiring) partner, because the year's actual profit is not yet known.

What is an Executor's Account?

The account of the deceased partner's legal representative, credited with the amount due and interest, and debited with payments made.

Which basis should I use if the question gives both profit and sales?

Use the basis the question names; if it gives last year's sales and profit and this year's sales till death, it expects the sales basis.