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Accounting Treatment of Amount Due to Deceased Partner

Last Updated : 05 Apr, 2023
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After making all the adjustments related to the partners, the balance due to the deceased partner is transferred to his/her executor’s account. This amount is paid to the executor in either of the following ways:

1. Lump-sum in a single instalment:

Under this method of payment, the full amount due to the deceased partner is paid at once to his/her executor.

2. In more than one instalment:

Under this method, the amount due is paid to the executor in more than one instalment, and so, an executor is eligible to receive an interest of 6%p.a. The executor at his option can also demand a share in the profit of the firm instead of the interest on such a due amount. The share of profit is determined by dividing the profit in the ratio of a deceased partner’s capital to the total capital employed.


Journal Entries:

1. As a Lump-sum in a single instalment:


2. In more than one instalment:

a. Interest due:


b. Payment made:


Format of an Executor Account:


1. Lump-sum in a single instalment:


Rahul, Tina, and Anjali were partners sharing profits in the ratio of 6: 1: 1. Their Balance Sheet as on 31st March 2021 was:


Anjali in an accident died on 31st December 2021, and the deed provided: 

  1. The deceased partner will be entitled to receive his share of profits up to the date of death on the basis of the previous year’s profits. Net Profit of the last year was ₹ 4,00,000.
  2.  Interest on Capital is to be allowed at 5% p.a.
  3. Drawings till the date of Anjali is ₹ 36,000, and interest is to be charged @5% p.a.
  4. Amount due to the Executor of the deceased partner is paid at once. 

Calculate the amount due to the Executor of the deceased partner, Prepare the necessary accounts and pass the journal entries.





Working Notes:

1. Anjali's~share~of~profit=4,00,000\times\frac{1}{8}=₹50,000    for one year

For 9 months:


2. Interest on Capital for 9 months:


3.  Interest on Drawing for 9 months:


2. In more than one instalment:

Prakash, Sohan, and Rohan shared profits in a ratio of 2: 2: 1. Rohan died on 31st December 2020. Their Balance Sheet on the same date appeared as:


Additional Information:

  1. Interest on Capital was ₹ 300.
  2. Rohan’s share of Goodwill was ₹10,000, to be contributed by the remaining partners equally.
  3. Rohan’s share of profit till the date of death ₹ 1,500.
  4. ₹2,800 was paid immediately to his executor, and the balance is paid in two equal instalments from 1st April 2021 with an interest of 6%p.a.

Prepare Rohan’s Executor’s Account and pass the necessary journal entries.





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