Question

What is the correct sequence at the time of death of a partner? 
(A) Amount paid to Executor 
(B) Preparation of Revaluation account 
(C) Calculation of Amount Payable to executor of Deceased partner 
(D) Calculation of Revaluation Gain/Loss 
(E) Balance of Executor's loan A/c 
Choose the correct answer from the options given below:

• A. (B), (D), (C), (A), (E)
• B. (B), (D), (A), (C), (E)
• C. (D), (B), (C), (A), (E)
• D. (D), (B), (A), (C), (E)

Hint:

At partner’s death: revalue assets → calculate gain/loss → compute amount payable → pay executor → adjust executor’s loan account.

Answer 1

The Correct Option is A

Step 1: Revaluation Account Preparation
Upon a partner's death, the firm's assets and liabilities are revalued. A Revaluation Account is prepared to determine the profit or loss from this revaluation.
Step 2: Revaluation Gain/Loss Calculation 
The calculated gain or loss from the Revaluation Account is then allocated to the partners' capital accounts according to their profit-sharing ratio. 
Step 3: Deceased Partner's Executor Payment Calculation 
The amount due to the deceased partner's executor is calculated. This includes the deceased partner's capital account balance, their share of profits, and adjustments for revaluation. 
Step 4: Executor Payment Execution 
The firm then disburses the calculated amount to the executor. 
Step 5: Executor's Loan Account Balance Finalization 
Lastly, the outstanding balance of the Executor's Loan Account, if any, is ascertained and recorded. 
Step 6: Sequence Summary 
Therefore, the correct order of these steps is: \((B), (D), (C), (A), (E)\).