CHAPTER: RETIREMENT BAND DEATH OF A PARTNER
Q:1 A,B and Care partners sharing profits in the ratio ½,
3/10 and 1/5 resp. B retires and his share is taken by A and C in the ratio of
2:1. Then immediately, D is admitted for 1/4th share, half of which
was given by A and the remaining share was taken equally from A and C.
Calculate profit sharing ratio between after D’s admission.
Q:2 X, Y and Z are partners sharing profits in the ratio
of 4:3:2. Y retires and surrenders 1/9th of his share in favour of X
and the remaining in favour of Z. Calculate New profit sharing ratio and the
gaining ratio.
Q:3 A, B and C are partners sharing profits in the ratio
of 4:3:1. B retires, selling his share of profits to A and C for Rs 8,100; Rs
3,600 paid by A and Rs 4,500 by C. the profits for the year after B’s
retirement were Rs 10,500.
You are required to
i)
Give necessary entries
ii)
Calculate new profit ratio and distribute the
profits between A and C. A and C brings necessary cash.
Q:3 Debtors 16,000
Less:
Provision For doubtful debts 800
i)
That an amount of Rs 1,100 included in
debtors be written off as it is no longer receivable.
ii)
That a provision for doubtful debts be
maintained at the existing rate.
Q:4 X, Y and Z
were in partnership sharing profits and losses equally. ‘Y’ retires from the firm. After adjustments,
his capital account shows a credit balance of Rs 60,000 as on 1st
April, 2012. The balance due to Y is to be paid in three equal annual
instalments together with interest @ 5 % p.a. Prepare Y’s Loan Account until he
is paid the entire amount due to him. The firm closes its books on 31st
March every year.
Q:5 X, Y and Z
were in partnership sharing profits and losses equally. ‘Y’ dies on 30/06/2012. After adjustments, his
capital account shows a credit balance of Rs 60,000 as on 30/06/
2012.Accounting year ends on 31/03 every year. The balance due to Y is to be
paid in three equal annual instalments together with interest @ 5 % p.a.
Prepare Y’s Executor’s Account until he is paid the entire amount due to him.
Q:6 X, Y and Z
were in partnership sharing profits and losses equally. ‘Y’ retires from the firm. After adjustments,
his capital account shows a credit balance of Rs 60,000 as on 1st
April, 2012. The balance due to Y is to be paid in four equal half yearly
instalments together with interest @ 5 % p.a. Prepare Y’s Loan Account until he
is paid the entire amount due to him. The firm closes its books on 31st
March every year mount due to him.
Q:7 X, Y and Z
were in partnership sharing profits and losses equally. ‘Y’ dies on 30/06/2012. After adjustments, his
capital account shows a credit balance of Rs 60,000 as on 30/06/2012. The
balance due to Y is to be paid in four equal half yearly instalments together
with interest @ 5 % p.a. Prepare Y’s Loan Account until he is paid the entire
amount due to him. The firm closes its books on 31st March every
year mount due to him.
Q:8 Capitals of A,
B and C as on 1/1/2015 were Rs 2,00,000; 3,00,000; and 4,00,000 respectively.
The profit sharing ratio between A, B,C is 5:3:2. As on that date B retires from the firm.
Profit of Revaluation is Rs 36,000. General Reserve existed on that date at Rs
12,000. P&L Dr balance existed at Rs 24,000.Goodwill exists in the balance
sheet at Rs 48,000 and cash balance existed at Rs 10,000.
Y is to be paid in cash to be brought in by the remaining
partners in such a way that their capitals be brought in new ratio and the cash
balance should be maintained at Rs 25,000.
Q:9 A, B, C and D are partners sharing profits in the
ratio of 3:3:2:2 resp. D retires and A, B and C decide to share the future
profits in the ratio of 3:2:1.Goodwill of the firm is to be valued at Rs
6,00,000. Goodwill already appears in the books at Rs 4,50,000. The profits for
the first year after D’s retirement amount to Rs 12,00,000.
Give the necessary journal entries to record Goodwill and
to distribute the profits.
Q:10 At the time of A’s death, one of the partners in a
firm of A, B and C sharing profits and losses in the ratio of 5:3:2, General
reserve existed at Rs 30,000, P& L Dr balance at Rs 12,000. There was an
unrecorded asset worth Rs 30,000 which is taken over by A’s executor. Calculate
the amount which is payable to A’s executor.
Q:11 F0llowing is the Balance Sheet of Kusum, Sneh and
Usha as on 31st March,2009, who have agreed to share profits an
losses in proportion of their capitals.
Balance Sheet
As on 31st
March, 2009
|
liabilities
|
Amount
|
Assets
|
Amount
|
|
Capitals
|
|
Land
& Building
|
4,00,000
|
|
Kusum 4,00,000
|
|
Machinery
|
6,00,000
|
|
Sneha 6,00,000
|
|
Closing
Stock
|
2,00,000
|
|
Usha 4,00,000
|
14,00,000
|
SundryDebtors2,20,000
Less:Provision 20,000
|
2,00,000
|
|
EPF
|
70,000
|
Cash
at bank
|
2,00,000
|
|
Workmen
Compensation Fund
|
30,000
|
|
|
|
Creditors
|
1,00,000
|
|
|
|
|
|
|
|
|
|
16,00,000
|
|
16,00,000
|
On 31st
March, 2009 Kusum desired to retire from the firm and the remaining partners
decided to carry on the business. It was agreed to revalue the assets and re
assess the liabilities on that date on the following basis:
i)
Land and building be appreciated by 30%.
ii)
Machinery be depreciated by 30 %.
iii)
There were bad debts of Rs 35,000.
iv)
The claim on account of workmen compensation
fund was estimated at Rs 15,000.
v)
Goodwill of the firm was valued at Rs
2,80,000 and Kusum ‘s share of goodwill was adjusted against the capitals of
continuing partners who have decided to share future profits in the ratio of
3:4.
vi)
Capitals of the new firm in total will be the
same as before the retirement of kusum and will be in the new ratio of
continuing partners.
vii)
Amount due to Kusum be settled by paying Rs
1,00,000 in cash and balance by transferring to her loan A/c which will be paid
later on.
Prepare Revaluation Account, Capital
Accounts of partners and Balance Sheet of the new firm after Kusum’s
retirement.
Q:12 Why is there a need for Revaluation of Assets and
reassesement of liabilities?
Q:13 Where will be P&L Suspense A/c shown at the time
of death of a partner and why?
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