Upon the death of a partner, the firm's assets and liabilities need to be ___ and any resulting profit or loss is transferred to the capital accounts.

Revalued

True or False: A partner's estate is not entitled to any profits after their death if the remaining partners have a contract to purchase the deceased partner's interest.

True

What are the two methods for calculating profit up to the date of death of a partner?

Time Basis and Turnover or Sales Basis

According to the partnership agreement, how is goodwill calculated upon the death of a partner?

Goodwill is valued at two years’ purchase of the average net profits for the three preceding completed years.

What happens to a joint life policy when a partner in a firm dies?

The firm receives the value of the joint policy, which can be treated differently based on whether it appears in the balance sheet.

What is the significance of revaluation of assets and liabilities upon a partner's death?

It determines the new values which affect the final settlements and calculations related to the deceased partner's share.

True or False: The surviving partners can decide to ignore the profit-sharing ratio after the death of a partner.

False: The profit-sharing ratio remains the same unless stated otherwise.

How is interest on the capital account of a deceased partner calculated until the date of final payment?

Interest is calculated at the rate of 6% per annum from the date of death until the date of final payment.

Riddle: I can be a lifeline in business, providing funds upon death, yet I remain just a promise until my time comes. What am I?

A joint life policy

What adjustments are made in the capital account of a deceased partner?

The adjustments include calculating profits, interest on capital, and any revaluation gains or losses.