Partnership

Yes.  Capital ratio will be determined after adjusting all the reserves and accumulated profits to the date of dissolution. Further, life policy reserve is in the nature of an accumulated profit and must be transferred to capital account of all partners in the ratio of old profit sharing ratio.

Please refer chapters regarding "Life insurance policy and its assignment" under Retirement and death of partner  and "Capital ratio" under Garner vs Murray rule in Dissolution accounting  simultaneously to understand the concepts clearly. Ref. RL Gupta & M Radhaswami.

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