Retirement, Death of a partner-Important Questions

IMPORTANT QUESTIONS

CHAPTER 6: Retirement/Death of partner

  1. X, Y and Z are partners sharing profit in the ratio of 3 : 2 : 1. Y retires and on the date of Y’s retirement. Goodwill already appears in the books at a value of 48,000. New ratio of X and Y is 3 : 2. Pass the necessary journal entries.
  2. X, Y and Z are partners sharing profits in the ratio 3 : 2 : 1. X retires from the partnership. In order to settle his claim the following revaluation of assets and liabilities was agreed upon:
    1. The value of machinery is increased by 50,000.
    2. The value of investment is increased by 4,000.
    3. A provision for outstanding bill standing in the books at 2,000 is now not required.
    4. The value of land & building is decreased by 24,000.
    Give journal entries if
    1. Partners decide to show the revalued amount in the balance sheet.
    2. Partners decide to show the original value of assets & liabilities in the balance sheet and Y and Z agree to share profits in the ratio of 2 : 1.
    Revaluation Account
    Date Particulars Amount Date Particulars Amount
    To land & building
    To partner’s capital A/C
    X 16,000
    X 16,000
    X 16,000
    		24,000



    32,000    		 By machinery A/C
    By investment A/C
    By provision for outstanding bill A/C


    		 50,000
    4,000
    2,000
    56,000 56,000
    Memorandum revaluation A/C
    Date Particulars Amount Date Particulars Amount
    To land & Building A/C
    To machinery A/C
    To investment A/C
    To provision for outstanding bill A/C
    X 16,000
    Y 10,667
    Z 5,333
    		24,000
    50,000
    4,000
    2,000



    32,000     		By machinery A/C
    By investment A/C
    By provision for outstanding bill A/C
    By land & Building
    By partner’s capital A/C
    X 21,333
    Y 10,667

    		50,000
    4,000
    2000
    24,000


    32,000

    1,12,000 1,12,000
  3. A, B and C are partner’s sharing profit and losses in the ratio of ⅖, ⅖ and ⅕ respectively. C retires, A and B decide to share future profits and losses in the ratio 2 : 1. Calculate the gaining ratio.
  4. Aman, Vikram and Sonu are partners sharing profits in the ratio of 4 : 3 : 1. Vikram retires selling his share of profits to Aman & Sonu for Rs. 8,100; Rs. 3,600 paid by Aman and 4,500 paid by Sonu. Profit for the year after Vikram retirement was Rs. 10,500.
    You are required:-
    1. To give necessary journal entries to record the transfer of Vikram’s share to Aman and Sonu.
    2. To calculate new profit sharing ratio and distribute the profits between A and C.
  5. X, Y and Z were in a partnership sharing profits in the ratio of 5 : 3 : 2. X retires and the balance in reserve at the time of retirement of X was 20,000. Pass the necessary journal entry:-
    1. Partner’s decide to distribute the entire reserve
    2. Partner’s decide to distribute only the retiring partners share
    3. Partners decide to show entire amount of reserve in balance sheet and Y and Z share the gains equally.
  6. A, B & C are partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1, their balance sheet on 31.12.17
    Calculate:-
    Liabilities Amount Assets Amount
    Sundry creditors
    General Reserve
    Capital accounts
    A 20,000
    B 40,000
    C 30,000
    		40,000
    5,000



    90,000     		Cash in hand
    Debtors
    Stock
    Furniture
    Building

    		 20,000
    25,000
    30,000
    10,000
    50,000
    1,35,000 1,35,000
    B died on 31st march 2018 and as per partnership deed his executor were entitled for
    1. His capital as on the date of last balance sheet.
    2. His share in general reserve.
    3. His share of goodwill. The goodwill of the firm was valued at 48,000.
    4. His share of accrued profit, calculated on the basis of last year’s profit. The profit for the last year was Rs. 24,000
    5. Interest on capital up to the date of death at 9% per annum.
    6. Prepare B’s capital account.