CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set C

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Read and download free pdf of CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set C. Students and teachers of Class 12 Accountancy can get free printable Worksheets for Class 12 Accountancy Part 1 Chapter 4 Reconstitution of a Partnership Firm Retirement/Death of a Partner in PDF format prepared as per the latest syllabus and examination pattern in your schools. Class 12 students should practice questions and answers given here for Accountancy in Class 12 which will help them to improve your knowledge of all important chapters and its topics. Students should also download free pdf of Class 12 Accountancy Worksheets prepared by school teachers as per the latest NCERT, CBSE, KVS books and syllabus issued this academic year and solve important problems with solutions on daily basis to get more score in school exams and tests

Worksheet for Class 12 Accountancy Part 1 Chapter 4 Reconstitution of a Partnership Firm Retirement/Death of a Partner

Class 12 Accountancy students should refer to the following printable worksheet in Pdf for Part 1 Chapter 4 Reconstitution of a Partnership Firm Retirement/Death of a Partner in Class 12. This test paper with questions and answers for Class 12 will be very useful for exams and help you to score good marks

Class 12 Accountancy Worksheet for Part 1 Chapter 4 Reconstitution of a Partnership Firm Retirement/Death of a Partner

Question : On the retirement of a partner, profit on revaluation of assets and liabilities should be credited to the Capital Accounts of :
(a) All partners in the old profit-sharing ratio
(b) The remaining partners in their old profit-sharing ratio
(c) The remaining partners in their new profit-sharing ratio
(d) None of these.
Answer : A
 
Question : The old profit-sharing ratio among Ram, Shyam and Taja were 2 : 2 ; 1. The new profit-sharing ratio after Shyam’s retirement is 3 : 2. The gaining ratio is :
(a) 3 : 2 (b) 2 : l (c) 1 : 1 (d) 2 : 3
Answer :  C
 
Question : X, Y and Z were partners sharing profit in the ratio 5 : 4 : 3. Z retires and his share was taken up by X and Y in the ratio of 3 : 2. The new profit sharing ratio of X and Y will be :
(a) 5 : 4 (b) 4 : 3 (c) 5 : 3 (d) 17 : 13
Answer : D
 
Question : In case of retirement of a Partner from the firm, the profit on revaluation will be credited to the capital accounts of partners :
(a) In old profit sharing ratio of remaining partners
(b) In new profit sharing ratio of remaining partners
(c) In old profit sharing ratio of all the partners
(d) Only a retiring partner
Answer :  C
 
Question : X, Y and Z are partners sharing profi ts in the ratio of 5 : 4 : 1. What will be the new ratio of the remaining partners if Z retires?
(a) 5 : 4 (b) 3 : 2 (c) 1 : 1 (d) 5 : 1
Answer :  A
 
 

Very Answer Type Questions

 
 
Question : How is new profit ratio calculated on retirement of a partner?
Answer : New Share = Old Share + Acquired Share/Gaining Ratio. 
 
Question : Why is gaining ratio calculated?
Answer : Gaining ratio is calculated to ascertain the amount of goodwill payable to the retiring partner by remaining partners.
 
Question : Explain the treatment of accumulated losses at the time of retirement of a partner.
Answer : At the time of retirement or death of a partner, the amount of accumulated losses shall be written
off by debiting to all partners in their old profi t sharing ratio :
All Partner’s Capital A/c Dr. _____
To Profit & Loss A/c (Old Ratio) _____
 
Question : P, Q and R are partners sharing profits in the ratio of 1/4 : 3/10 : 9/20. What will be the new ratio on the retirement of R?
Answer : New Ratio will be 5 : 6.
 
 

Short Answer Type Questions

 
Question : Briefl y explain the need for the revaluation of assets and liabilities on the reconstitution of a partnership fi rm.
Answer : At the time of reconstitution of a fi rm, assets and liabilities of the fi rm are revalued. The net gain (or loss) due to the revaluation of assets and liabilities is shared by existing partners in their old profi t sharing ratio. To calculate gain (or loss) on revaluation, ‘Revaluation Account’ is opened at the time of admission or retirement (reconstitution of fi rm) of a partner. The objective achieved in this process is that the net benefi t of increase (or decrease) in the valuation of assets and liabilities due to efforts of existing partners is shared by them only.
 
Question : What is the method of calculating the share of profit of outgoing partner, when retirement is after the preparation of fi nal accounts?
Answer : Preparation of profit and loss account after his retirement
On the basis of memorandum of previous year’s profit.
On the basis of sales.
On the basis of certain percentage of capital.
 
Question : What is the need and required entry to be passed in the books of the firm for distribution of specifi c reserve or fund?
Answer : If specifi c reserve or funds like Workmen’s Compensation Fund, Investment Fluctuation Fund, etc.
are more in value than the actual liability or if liability does not exist, they should be distributed among all partners (including the retiring partner) in their old profi t-sharing ratio.
Workmen’ Compensation Fund A/c Dr.
Investment Fluctuation Fund A/c Dr.
To All Partners’ Capital A/cs
(Being excess of funds transferred to Partners’
Capital A/cs in their old ratio)
 
 
Question : Aparna, Manisha and Sonia are partners sharing profits in the ratio of 3:2:1. Manisha retires and goodwill of the firm is valued at Rs. 1,80,000. Aparna and Sonia decided to share future in the  ratio of 3:2. Pass necessary Journal entries.
 
Journal
Aparna’s Capital A/c Dr. 18,000
Sonia’s Capital A/c Dr. 42,000
To Manisha’s Capital A/c 60,000
(Goodwill credited to Manisha’s capital and debited to continuing partners’ capitals in the gaining ratio) 
Class_12_Accountancy _Worksheet_1
 
 
The partners share profits in the ratio of 8 : 4 : 5. C retires from the firm on the same date subject to the following term S and conditions:
 
i) 20% of the General Reserve is to remain as a reserve for bad and doubtful debts.
 
ii) Motor)r Car is to be decreased by 5%.
 
iii) Stock is to be revalued at Rs.17, 500.
 
iv) Goodwill is valued at’ 2 ½ years purchase of the average profits of last 3 years. Profits were; 2001: Rs.11,000; 200l: Rs. 16,000 and 2003: Rs.24,000. C was paid in July, A and B borrowed the necessary amount from the Bank on the security of Motor Car and stock to payoff C. Prepare Revaluation Account, Capital Accounts and Balance Sheet of A and B.

Question : On the retirement of a partner, profit on revaluation of assets and liabilities should the credited to the Capital Accounts of :

(a) All partners in the old profit-sharing ratio
(b) The remaining partners in their old profit-sharing ratio
(c) The remaining partners in their new profit-sharing ratio
(d) None of these
 
Answer : A
 
Question : The old profit-sharing ratio among A, B and C were 2:2:1. The new profit-sharing ratio after B’s retirement is 3 : 2. The gaining ratio is :
(a) 3 : 2
(b) 2 : 1
(c) 1 : 1
(d) 2 : 3
 
Answer :  C
 
Question. Revaluation account or Profit & loss adjustment account is
(a) Real Account
(b) Nominal Account
(c) Personal Account
(d) None of the options

Answer: B

Question. A, B and C are partners sharing profits in the ratio of 5 : 2 : 1. If the new ratio on the retirement of A is 3 :2, what will be the gaining ratio?
(a) 11: 14
(b) 3 : 2
(c) 2 : 3
(d) 14 : 11

Answer: D

Question. On retirement of a partner, goodwill will be credited to the Capital Account of:
(a) Retiring Partner
(b) Remaining Partners
(c) All Partners
(d) None of the Above

Answer: A

Question. A, B and C are partners sharing profits and losses in the ratio of 3 : 2 :1. On 1.3.2016 C died. The average profits of the firm for last four years were ₹ 72,000 Books are closed on 31st December. C’s share of profit till the date of his death will be:
(a) ₹ 2,000
(b) ₹ 12,000
(c) ₹ 1,400
(d) ₹ 24,000

Answer: A

Question. Revaluation Account is prepared at the time of …………
(a) Admission of a partner
(b) Retirement of a partner
(c) Death of a partner
(d) All of the above

Answer: D

Question. P, Q and R are partners sharing profits in the ratio of 5 : 4 : 3. Q retires and P and R decide to share future profits equally. Gaining Ratio will be :
(a) 5 : 3
(b) 1 : 1
(c) 1 : 3
(d) 3 : 1

Answer: C

Question. A, B and C are partners sharing profits in the ratio of 3 : 2 : 1. They had a Joint Life Policy of ₹ 3,00,000. Surrender value of JLP in Balance Sheet is ₹ 90,000. C dies what is share of each partner in JLP ?
(a) ₹ 1,05,000 ; ₹ 70,000; ₹ 35,000
(b) ₹ 45,000 ; ₹ 30,000; ₹ 15,000
(c) ₹ 1,50,000 ; ₹ 1,00,000 ; ₹ 50,000
(d) ₹ 1,95,000 ; ₹ 1,30,000 ; ₹ 65,000

Answer: C

Question. On death of a partner, his excutor is paid the profits of the deceased partner for the relevant period. This payment is recorded in Profit & Loss A/c :
(a) Adjustment
(b) Appropriation
(c) Suspense
(d) Reserve

Answer: C

Question. On the retirement of a partner, full amount of goodwill may be credited to the capital accounts of:
(a) Retiring partners
(b) Remaining partners
(c) All partners
(d) None of these

Answer: C

Question. How unrecorded assets are treated at the time of retriement of a partner ?
(a) Credited to Revaluation Account
(b) Credited to Capital Account of Retiring Partner
(c) Debited to Revaluation Account
(d) Credited to Partner’s Capital Accounts

Answer: A

Question. On retirement of a partner, his capital account will be credited with
(a) His/her share of goodwill.
(b) His share in reserves and surplus.
(c) His share of profit in revaluation
(d) All of the above

Answer: D

Question. According to the partnership Act, (Sec. 37) the interest payable to the deceased partner on the amount left by him will be:
(a) 6% p.a.
(b) 10% p.a.
(c) The Bank rate.
(d) None of the above.

Answer: A

Question. A, B are C are sharing profits in the ratio of \(\frac{1}{2}: \frac{1}{3} \div \frac{1}{6}\) C retired. Gaining ratio will be :
(a) 2 : 1
(b) 2 : 3
(c) 3 : 2
(d) 1 : 2

Answer: C

Question. The ratio in which the continuing partners acquire the outgoing partners share is called
(a) New Profit sharing ratio
(b) Old Profit sharing ratio
(c) None of the options
(d) Gaining Ratio

Answer: D

Question. At the time of retirement of a partner, if goodwill appears in the balance sheet, it must be written off, the capital accounts of all partners are debited in
(a) The old profit sharing ratio
(b) The new profit sharing ratio
(c) The capital ratio
(d) None of the options

Answer: A

Question : A, B and C are partners sharing profit in the ratio 3 : 2 : 1, B retires, A and C decided to share the profit in the ratio of 2 : 1 in future. Gaining ratio of A and C will be :
(a) 3 : 1
(b) 3 : 2
(c) 1 : 1
(d) 2 : 1
 
Answer :  C
 
Question : A, B and C are three partners sharing profit in the ratio 4 : 3 : 2. A retires, B and C decided to share profi ts in future in the ratio of 5 : 3. Gaining ratio of B and C will be :
(a) 3 : 2
(b) 21 : 11
(c) 4 : 3
(d) 4 : 2
 
Answer :  B
 
Question : A, B and C were partners sharing profi ts in the ratio of 5 : 4 : 1 . A retires from the fi rm. New profi t sharing ratio will be :
(a) 5 : 4
(b) 3 : 1
(c) 4 : 1
(d) 5 : 1
 
Answer :  C
 
Question : Kush, Hari and Pratap are partners. On retirement of Kush, the goodwill already appears in the Balance Sheet at Rs. 24.000. The goodwill will be written off:
(a) By debiting all Partners’ Capital Accounts in their old profit-sharing ratio
(b) By debiting remaining Partners’ Capital Accounts in their new profit-sharing ratio
(c) By debiting retiring Partners’ Capital Account from his share of goodwill
(d) None of these.
 
Answer :  B
 

Question : A, B, C are partners sharing profits in the ratio of 5:3:2.B retires and his share is taken over by A and C in the ratio of 2:1. The new PSR will be
a) 13:17
b) 2:1
c) 7:3
d) 2:4

Answer :  C

Question : A, B, C are partners sharing profits in the ratio of 4:3:2. A retires and his share was taken by B and C in the ratio of 5:3.If A gets ₹ 12000 as goodwill then B and C will be debited with
a) ₹6500 and₹ 5500
b) ₹7500 and ₹4500
c) ₹2000 and ₹10000
d) ₹4000 and ₹8000

Answer :  B

Question : A,B,C are partners sharing profits in the ratio of 4:3:2.B retires and remaining partners share profits in the ratio 5:3. Calculate gaining ratio.
a) 2: 3
b) 13:11
c) 2: 4
d) 5:3

Answer :  D

Question : On the retirement of a partner, the amount of profit on revaluation of assets and liabilities is credited to the capital accounts of :
a) Only the retired partner
b) All partners in old PSR
c) Remaining partners in new PSR
d) Remaining partners in old PSR

Answer :  B

Question : When is gaining ratio calculated
a) Admission
b) death
c) retirement
d) death and retirement

Answer :  D

 

Very Short Answer Type Questions

 
Question : Is it the retirement of a partner means reconstitution of a firm?
Answer : Yes, on the retirement of a partner, the old partnership comes to an end but the fi rm continues and a new partnership comes into existence. So retirement means reconstitution of fi rm.
 
Question : How is goodwill treated at the time of retirement of a partner?
Answer : The retiring partner’s share of goodwill is credited to his capital account and debited in remaining partner’s capital accounts in gaining ratio.
 
Question : Explain the treatment of accumulated losses at the time of retirement of a partner.
Answer : At the time of retirement or death of a partner, the amount of accumulated losses shall be written off by debiting to all partners in their old profi t sharing ratio :
All Partner’s Capital A/c Dr. _____
To Profit & Loss A/c (Old Ratio)
 
Question : M, N and O are partners sharing profits in the ratio of 2 : 1 : 1. O retires whose share is wholly taken by M. Calculate new ratio and gaining ratio in this case.
Answer : New ratio 3:1; there will be no Gaining ratio because whole share is taken by M.

Short Answer Type Questions – I

Question : What is meant by reconstitution of a partnership firm? Explain briefly any two occasions on which a partnership fi rm can be reconstituted?
Answer : Any change in existing agreement of partnership amounts to reconstitution of a partnership fi rm.
As a result, the existing agreement comes to an end and new agreement comes into existence and the fi rm continues.
 
Question : What are the various modes or ways of retirement of a partner?
Answer : Modes or Ways of Retirement :
According to the provisions of Section 32 of the India Partnership Act, 1932 a partner may retire :
(i) with the consent of all the other partners;
(ii) by the virtue of an express agreement between the partners; or
(iii) in the case of a partnership at will, by giving notice in writing to all other partners of his intention to retire.
 
Question : Ashish, Vinod and Chander are partners sharing profi ts and losses in the ratio of 2 : 1 : 2 respectively. Chander retires and Ashish and Vinod decide to share the profi ts and losses equally in future. Calculate the gaining ratio.
Answer : 1 : 3.
 
Question :  X, Y and Z are partner sharing profi ts in the ratio of 4 : 3 : 2. Y retires. X and Z decided to share profi t and losses in future in the ratio of 5 : 4. Calculate gaining ratio.
Answer : Gaining Ratio 1:2.
 
Question : X, Y and Z are three partners sharing profi ts and losses in the ratio of 2 : 2 : 1. Y retires and goodwill of the fi rm is valued at Rs. 60,000. No Goodwill Account appears in the books of the firm Pass necessary Journal entries for goodwill. When Goodwill Account is adjusted through Partners’ Capital Accounts (AS-26).
Answer : X and Z’s Capital debited respectively with ` 16,000 and ` 8,000 and Y’s Capital A/c credited with ` 24,000 respectively (X & Z sacrifi cing ratio is 2:1).
 

Short Answer Type Questions – II

 
Question : What is the effect of retirement of a partner to the firm?
Answer : The following are the effects of retirement of a Partner (any three) :
(i) The retirement of a partner will terminate the old partnership and a new partnership comes into existence.
(ii) The combined shares of the remaining Partners is increased. Infact their profit-sharing ratio changes.
(iii) Accumulated Profits and Losses and Reserves are distributed among all the partners.
(iv) The assets and liabilities are revalued and proper adjustments are to be made.
(v) The goodwill of the firm has to be valued and retiring partner’s share of goodwill has to be adjusted.

 

RETIREMENT AND DEATH OF A PARTNER

Q 1 Define Gaining Ratio.

Q 2 Why is revaluation account prepared at the time of retirement of a partner?

Q 3 Calculate gaining ratio in the following cases:
(i) A, B & C are partners sharing profits & Losses in the ratio of 5:4:3. C retires from the firm.
(ii) X, Y & Z are partners sharing profits & losses in the ratio of 1/2, 3/10, & 1/5. Y decides to retire from the firm and X & Z decide to share future P&L in the ratio of 3:2.

Q 4 P, Q & R are partners sharing P&L in the ratio of 4:3:1. Q retires selling his share of profits to P & R for Rs 8100, Rs 3600 paid by P & Rs 4500 by R. The profits for the year after Q’s retirement were Rs 10500. Calculate the new profit sharing ratio & pass the necessary journal entries.

Q 5 Distinguish between gaining ratio & sacrificing ratio.

Q 6 A, B & C were partners in a firm sharing P&L in the ratio of 3:2:1. C retired and the new profit sharing ratio between A & B was 1:2. On C’s retirement goodwill was valued at Rs 30000. Pass the necessary journal entries without opening the goodwill account.

Q 7 When is “Memorandum Revaluation Account” prepared?

Q 8 A, B & C are partners sharing P & L in the ratio of 1/2, 1/3 &1/6 respectively. B retires
from the firm. A & C share future P & L equally. Their capitals after all necessary adjustment were A Rs 22400; B Rs 20200 & C Rs 11400. The cash balance as on that date was Rs 4000. Calculate the amount of cash to be brought in or to be withdrawn by the remaining partners in the following cases:
(i) The entire capital of the firm as newly constituted is fixed at Rs 40000.
(ii) The entire capital of the new firm will be readjusted so that the future capitals are in new profit sharing ratio.
(iii) B is to be paid through cash brought in by A & C in such a way as to make their capitals proportionate to their new profit sharing ratio.
(iv) B is to be paid through cash brought in by A & C in such a way as to make their capitals proportionate to their new profit sharing ratio. Minimum cash balance of Rs 3000 is to be maintained.
(v) Sufficient cash is to be brought in by A & C in such a way as to make their capitals proportionate to their new profit sharing ratio.

Q 9 What all items is the representative of the deceased partner entitled to?

Q 10 List the items that are debited to the deceased partners capital account.

Q 11 What are the two methods of calculation of profits of the deceased partner?
Explain with the help of examples.

Q 12 What is the difference between retirement of a partner & death of a partner?

Q 13 Why is outgoing partner entitled to a share of goodwill of the firm?

Q 14 Where is the payment recorded for the executors share of profit on the death of a partner when (i) remaining partners continue to share in old ratio (ii) the new profit sharing ratio is given .

Q 15 A ,B &C are partners in a firm sharing P & L in the ratio of 3:2:1. B died on 31/3/02.
The profits from 1/1/02 to 31/3/02 amounted to Rs 45000. Give the necessary Journal entries in the following cases:
(i) A & C agree to share future P&L in the ratio of 3:2
(ii) A & C continue to share P &L in the same ratio.

DISSOLUTION OF A PARTNERSHIP FIRM

Q 1 Distinguish between Realisation account & Revaluation account.

Q 2 Why is the balance of cash or bank not transferred to realisation account?

Q 3 Pass the necessary journal entries in the following cases:
(i) An unrecorded asset taken over by a partner
(ii) An unrecorded asset given to our creditor
(iii) Payment to creditors worth Rs 3000 if they accept stock of the same value
(iv) partner A takes over the liability of Mrs A’s loan of Rs 10000.

Q 4 Mention two internal liabilities whose payment does not require cash payment at the time of dissolution of the firm.

Q 5 Explain the provisions of sec 48 of partnership act.

Q 6 Distinguish between firms debts & private debts.

Q 7 Give the circumstances under which partnership firm can be dissolved.

Q 8 Are provisions against assets to be paid? Give reason.

Q 9 How do we deal with the following at the time of dissolution of the firm:
(i) Undistributed profits / losses
(ii) Fictitious assets
(iii) Partners loan account
(iv) If the question is silent regarding realisation of intangible asset
(v) If the question is silent regarding realisation of tangible asset
(vi) If the question is silent regarding payment of liability.

Q 10 Pass the journal entries in the following cases:
(i) Expenses of realisation Rs 7000 were to be borne by Ram, a partner. Ram used firms cash for paying these expenses.
(ii) Expenses of realisation Rs 8000 were to be borne by Ritu, a partner.
(iii) Realisation expenses paid by the firm amounted to Rs 3000. B had to bear these expenses.
(iv) An asset which had already been written off fetched Rs 8000.
(v) The firm had a JLP of Rs 50000 on which the premium paid was regarded as a business expense. The surrender value of the policy was Rs 15000. The Insurance co. Also paid a special bonus of Rs 6000.
(vi) Hari was to be given a commission of 3% on the net cash realised on dissolution & he was to meet all realisation expenses.The cash realised from sale of assets was Rs 76000& cash paid for liabilities amounted to Rs 16000. Actual expenses were Rs 7400.
(vii) L , a creditor to whom Rs 16000 were due to be paid took over machinery at Rs 20000. Balance was paid by him in cash.
(viii) Expenses of realisation were Rs 2000.
(ix) An unrecorded liability 0f Rs 5500 settled at a discount of 20%.
(x) Realisation expenses Rs 2000 were paid by Kishore.
(xi) Dissolution expenses were 9000. Out of the said expense Rs 4000 were to be borne by the firm and the balance by a partner.
(xii) Dissolution expenses were 9000. Out of the said expense Rs 4000 were to be borne by the firm and the balance by a partner. The expenses were paid by a partner.
(xiii) X agrees to do dissolution work for an agreed remuneration of Rs 5000 & the firm bears all realisation expenses which amounted to Rs 8000.

Question :  A,B,C are three partners .B died on 31 st August .Calculate B ‘s share of profits when the annual profit was Rs 54000. Books are closed on 31st march every year
a) 2300
b) 7500
c) 3455 
d) 5700
Answer : B

Question :  A, B, C are three partners and C died .calculate new PSR .
a) 3:4
b)1:1
c) 4:2
d) 3:1
Answer : B

Question :  A, B and C are sharing profits in the ratio of 2:2:1. B died on 31.3.12. Accounts are closed on 31st December. Sales for the year 2011 amounted to ₹ 3,00,000. Sales of ₹1,00,000 amounted between the period from 1st Jan 2012 to 31st March, 2012. The profits for the year 2011 amounted to ₹ 30,000. Calculate deceased partner’s share in the profits of the firm.
a) ₹5,000
b) ₹4,0000
c) ₹1,000
d) ₹6,000
Answer : B

Question :  The legal representatives of a deceased partner is entitled , at his discretion, to interest on amount due from the date of death to the date of payment.
a)3%
b) 5%
c) 7%
d) 6%
Answer : D

Question :  X,Y,Z are partners sharing profits in the ratio of 2:2:1.Y dies and his share is taken over by Z only. Calculate new PSR.
a) 4:5
b) 2:3
c) 5:6
d) 1:2
Answer : B

Question :  On retirement of a partner, the retiring Partner’s Capital Account will be credited with :
(a) His/her share of goodwill
(b) Goodwill of the firm
(c) Share of goodwill of remaining partners
(d) None of these.
Answer : A
 
Question :  A, B and C are partners. On retirement of A, the goodwill already appears in the Balance Sheet at Rs. 24,000. The goodwill will be written off:
(a) By debiting all Partners’ Capital Accounts in their old profit-sharing ratio
(b) By debiting remaining Partners’ Capital Accounts in their new profit-sharing ratio
(c) By debiting retiring Partner’s Capital Account from his share of goodwill
(d) None of these.
Answer : A
 
Question :  The meaning of the retirement of a partner is :
(a) Incoming of a partner in a firm (b) Outgoing of a partner from a firm
(c) Outgoing of all the partners from the firm (d) Death of all the partners.
Answer : B
 
Question :  The meaning of gaining ratio is :
(a) Increase in the share of profits of remaining partners in case of outgoing of a partner
(b) Decrease in the share of profit of old partners in case of incoming of a partner in the firm
(c) New profit sharing ratio
(d) Old profit sharing ratio
Answer :  A
 
Question :  A, B and C were partners sharing profits in the ratio of 3 : 2 : 1. C retires and his share was taken by A and B in the ratio of 3 : 2. The new profi t sharing ratio of A and B will be :
(a) 3 : 5 (b) 1 : 1 (c) 5 : 3 (d) 3 : 2
Answer :  D
 
 

Very Short Answer Type Questions

 

Question : How is new profit ratio calculated on retirement of a partner?
Answer : New Share = Old Share + Acquired Share/Gaining Ratio.
 
Question : What are the rights of a retiring partner?
Answer : A retiring partner has the following rights : (i) Right to get back his capital along with his share in the accumulated profits of the firm; and (ii) Right to get his share in the goodwill of the firm.
 
Question : Explain the treatment of reserves and accumulated profi ts at the time of retirement of a partner.
Answer : At the time of retirement or death of a partner, the balance sheet of the fi rm may show general reserve or undistributed profi ts (Cr. balance of Profit and Loss Account). Such accounts are credited to all partners (including the retiring partner) in their old profi t sharing ratio.
General Reserve A/c Dr. _____
Profi t & Loss A/c Dr. _____
To All Partner’s Capital A/c (Old Ratio)
 
Question : X, Y and Z are partners sharing profits in the ratio of 5 : 4 : 3. Y retires and X and Z decide to share future profits equally. What will be the Gaining Ratio?
Answer : Gaining Ratio will be 1 : 3.
 
 

Short Answer Type Questions

 
Question : What do you mean by Retirement of a Partner?
Answer : Usually, a partner has the right of retiring from the fi rm by giving suitable notice. Technically, on retirement the old partnership comes to an end and a new one forms among the remaining partners. However, the fi rm as such continues.
 
Question : Under what circumstances a partner retires from the firm?
Answer : Section 32(1) of the Partnership Act, 1932 lays down that a partner can retire from a firm in any of the following circumstances :
(i) When all the remaining partners gave their consent ;
(ii) When all the remaining partners enter into an express agreement in this connection; or
(iii) When the partnership at will, by giving a notice in writing to all the remaining partners.
There may be certain other reasons for retirement from a firm, for example old age of a partner, his ill health, misunderstanding with other partners, unlawful activities by other partners, lunacy of any partner, insolvency of a partner etc.
 
Question : Give any two points of distinction between ‘Gaining Ratio’ and ‘Sacrificing Ratio.
Answer : (i) Sacrificing ratio is calculated at the time of admission of a new partner but gaining ratio is calculated at the time of death/retirement of a partner.
(ii) Sacrificing ratio is calculated by deducting new ratio from old ratio but gaining ratio is calculated just reverse.
 
Question : What Journal entry will be made for writing off the goodwill already existing in Balance Sheet?
Answer : All Partners’ Capital A/cs Dr. (In old profi t-sharing ratio)
To Goodwill A/c
(Being Existing Goodwill A/c written off in old ratio)
 
 

Short Answer Type Questions -II

 
Question : Differentiate between Sacrificing Ratio and Gaining Ratio on any three bases.
Answer : Difference between Sacrificing Ratio and Gaining Ratio
Xy-14
 
 
 
 
Question : A, B and C were partners in a firm sharing profits in 3 : 2 : 1 ratio. The firm closes its books on 31st March every year. B died on 12-06-2009. On B’s death the Goodwill of the firm was valued at Rs.60,000. On B’s death his share in the profits of the firm till the time of his death was to be calculated on the basis of previous year’s profit which was Rs.1,50,000. Calculate B’s share in the profit of the firm. Pass necessary journal entries for the treatment of goodwill and B’s share of the profit at the time of his death.
 
Question : A, B and C are partners sharing profits equally. On 30th Sep.2014 B died. B’s share of profit from the closure of the last accounting year till the date of death was to be calculated on the basis of the average of three completed years’ profits before death. Profits for the years ended 31st March 2012, 2013 and 2014 were Rs.50,000, Rs.60,000 and Rs.70,000 respectively. Calculate B’s Share of profit till the date of death and pass journal entries for the same.
 
Question : A, B and C are partners sharing profits and losses in the ratio 3:2:1. A died on 30th June 2014 Profits and turnover for the year ended 31st Dec 2013 were Rs.1,20,000 and Rs.10,00,000 respectively. The Turnover till 30th June 2014 were Rs.3,60,000. Calculate A’s share of profit and pass journal entries under Turnover or Sales basis.
 
Question : Enumerate the items for which the representatives of decreased partners are entitled to receive.
 
Question : Ramesh wants to retire from the firm .The profits on Revaluation on that date were Rs.12,000. Mohan and Rahul want to share this in their new profit sharing ratio 3:2.Ramesh wants this to be shared equally. How are the Profits to be shared? Give reasons.
 
Question : From the following particulars. Calculate the new profit –sharing ratio of the partners:-
(a) A , B and C are partners in a firm sharing profits and losses in the ratio of 5:3:2 B died and his share was taken up by A and C in the ratio of 2:1.
(b) P , Q and R were partners sharing profits in the ratio of 5:4:1. P Died.
 
Question : What are the methods of ascertaining the amount of profit to be given to the executors of deceased partner , if the death of a partner occurs on any day during the year .Explain.
Part 1 Chapter 01 Accounting for Not-for-Profit Organisation
CBSE Class 12 Accountancy Accounting for Not-for-Profit Organisation Worksheet
Part 1 Chapter 02 Accounting for Partnership Basic Concepts
CBSE Class 12 Accountancy Accounting For Partnership Firms Worksheet Set A
CBSE Class 12 Accountancy Accounting For Partnership Firms Worksheet Set B
Part 1 Chapter 03 Reconstitution of a Partnership Firm Admission of a Partner
CBSE Class 12 Accountancy Admission Of Partner Worksheet Set A
CBSE Class 12 Accountancy Admission Of Partner Worksheet Set B
Part 1 Chapter 04 Reconstitution of a Partnership Firm Retirement/Death of a Partner
CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set A
CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set B
CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set C
CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set D
Part 1 Chapter 05 Dissolution of Partnership Firm
CBSE Class 12 Accountancy Dissolution Of Partnership Firm Worksheet Set A
CBSE Class 12 Accountancy Dissolution Of Partnership Firm Worksheet Set B
Part 2 Chapter 01 Accounting for Share Capital
CBSE Class 12 Accountancy Share Capital Worksheet Set A
CBSE Class 12 Accountancy Share Capital Worksheet Set B
Part 2 Chapter 02 Issue and Redemption of Debentures
CBSE Class 12 Accountancy Debentures Worksheet
Part 2 Chapter 03 Financial Statements of a Company
CBSE Class 12 Accountancy Financial Statements Of Company Worksheet
Part 2 Chapter 04 Analysis of Financial Statements
CBSE Class 12 Accountancy Financial Analysis And Tools For Financial Analysis Worksheet
Part 2 Chapter 05 Accounting Ratios
CBSE Class 12 Accountancy Ratio Analysis Worksheet
Part 2 Chapter 06 Cash Flow Statement
CBSE Class 12 Accountancy Cash Flow Statement Worksheet Set A
CBSE Class 12 Accountancy Cash Flow Statement Worksheet Set B
z More Worksheets for Class 12 Accountancy
CBSE Class 12 Accountancy Case Studies
CBSE Class 12 Accountancy Goodwill Nature And Valuation Worksheet
CBSE Class 12 Accountancy Revision Worksheet
CBSE Class 12 Accountancy Sure Shot Questions Worksheet Set A
CBSE Class 12 Accountancy Sure Shot Questions Worksheet Set B

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CBSE Class 12 Accountancy Part 1 Chapter 4 Reconstitution of a Partnership Firm Retirement/Death of a Partner Worksheet

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Worksheet for Accountancy CBSE Class 12 Part 1 Chapter 4 Reconstitution of a Partnership Firm Retirement/Death of a Partner

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Part 1 Chapter 4 Reconstitution of a Partnership Firm Retirement/Death of a Partner worksheet Accountancy CBSE Class 12

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Part 1 Chapter 4 Reconstitution of a Partnership Firm Retirement/Death of a Partner CBSE Class 12 Accountancy Worksheet

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Worksheet for CBSE Accountancy Class 12 Part 1 Chapter 4 Reconstitution of a Partnership Firm Retirement/Death of a Partner

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