Study Material & Notes for the Chapter 7
Partnership - Death of a partner
III. AMOUNT DUE TO LEGAL REPRESENTATIVE
A. Accounting Treatment
On the death of a partner, the accounting treatment regarding goodwill, revaluation of assets and reassessment of liabilities, accumulated reserves and undistributed profit are similar to that of the retirement of a partner.
B. Payment of Dues
On the death of a partner his/her claim is transferred to his/her executors or legal representatives and settled in the same manner as that of the retired partner.
C. Computation of Amount Due to the Legal Representative
The above adjustments are made in the capital account of the deceased partner and then the balance in the capital account is transferred to an account opened in the name of his/her executor
The payment of the amount of the deceased partner depends on the agreement. In the absence of an agreement, the legal representative of a deceased partner is entitled to interest @ 6% p.a. on the amount due from the date of death till the date of final payment