Joint Life Policy

reena ( (165 Points)

14 June 2011  

Q. A,B n C take a joint life policy. After 5 years B retires. Old Profit sharing ratio is2:2:1. After retirement A n C decide to share profits equally. They had taken a JLP of Rs. 2,50,000 with the surrender value Rs. 50,000. What will be the treatment in the partner's capital account on receiving the JLP amount if :

1) JLPolicy is maintained at the surrender value?

2)Joint Life premium is fully charged to revenue as and when paid?

3)Joint life policy is maintained at surrender along with reserve?

Plz answer with explaination.