Death of A Partner
The death of a partner dissolves the partnership. On the date of death, the accounts are closed and the net income for the year to date is allocated to the partners' capital accounts. Most agreements call for an audit and revaluation of the assets at this time. The balance of the deceased partner's capital account is then transferred to a liability account with the deceased's estate.
The surviving partners may continue the business or liquidate. If the business continues, the procedures for settling with the estate are the same as those described earlier for the withdrawal of a partner.
Read more about this topic: Partnership Accounting
Famous quotes containing the words death and/or partner:
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—Griffin Jay, Maxwell Shane (1905–1983)
“When a man’s partner is killed he’s supposed to do something about it. It doesn’t make any difference what you thought of him. He was your partner, and you’re supposed to do something about it.”
—Dashiell Hammett (1894–1961)