SYJC
Subject: Book Keeping & Accountancy
Topic: RETIREMENT OF PARTNER
AND
DEATH OF PARTNER
(Solutions)
Q 1.
A] Answer the following questions in one sentence:
1) It is the proportion in which the continuing partners get benefits in future
profit due to retirement of partner.
2) The amount due to retiring partner can be paid off as per the terms of
partnership deed or otherwise mutually agreed upon.
B] Select the most appropriate alternative from those given below and rewrite
the statement:
1. All Partners
2. Legal Heirs Loan A/c.
3. Loss
4. Gain Ratio
5. 3:2
C] State whether the following statements are true or false:
1) True.
2) True.
3) True.
D] Gain Ratio = New Ratio – Old Ratio
1 3 53 2
Nitin
2 10 10 10
1 2 52 3
Mukesh
2 10 10 10
Gain Ratio = 2 : 3
:1:
Q 2. In the books of Partnership Firm
Revaluation Account
Dr. Cr.
Particulars ` ` Particulars ` `
To Stock A/c. 3,000 By Land & Building 2,600
To Debtors A/c. 500 By Creditors 1,000
To Machinery A/c. 1,500 By Partners’ Capital
- Gopi 800
- Madhav 400
- Ram 200 1,400
5,000 5,000
Partners’ Capital Account
Dr. Cr.
Particulars Gopi Madhav Ram Particulars Gopi Madhav Ram
To Revaluation 800 400 200 By Balance b/d. 30,000 20,000 15,000
To Cash/Bank 16,200 -- -- By Gen. Reserve 6,000 3,000 1,500
To Gopi’s Loan 27,000 -- -- By Goodwill 8,000 4,000 2,000
(Bal. fig.) By Cash/Bank -- 20,000 5,000
To Balance c/d. -- 46,600 23,300
44,000 47,000 23,500 44,000 47,000 23,500
Balance Sheet As on 1st April, 2020
(After Retirement of Gopi)
Liabilities ` ` Assets ` `
Partners’ Capital Goodwill 24,000
A/cs. 46,600 Land & Building 20,000
- Madhav 23,300 69,900 Add: Appreciation 2,600 22,600
- Ram
27,000 Machinery 26,500
Gopi’s Loan 15,000 Less: Depreciation (1,500) 25,000
Creditors 1,000 14,000
Less: W/off. Motor Van 7,000
2,000 Stock 15,000
Bills Payable Less: W/off. (3,000) 12,000
Sundry Debtors 11,000
Less: W/off (500) 10,500
Cash/Bank 11,800
1,12,900 1,12,900
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Working Note:
Cash/Bank Account
Dr. Cr.
Particulars ` Particulars `
To Balance b/d. 3,000 By Gopi’s Capital A/c. 16,200
To Madhav’s Capital A/c. 20,000
To Ram’s Capital A/c. 5,000 By Balance c/d. 11,800
28,000 28,000
Goodwill Account
Dr. Cr.
Particulars ` Particulars `
To Balance b/d. 10,000
To Gopi’s Capital A/c. 8,000
To Madhav’s Capital A/c. 4,000
To Ram’s Capital A/c. 2,000 By Balance c/d. 24,000
24,000 24,000
Q 3. In the books of Partnership Firm
Revaluation Account
Dr. Cr.
Particulars ` ` Particulars ` `
To Plant & Machinery 6,600 By Stock 3,000
To Furniture 2,000 By Creditors 1,000
To O/S. Legal Expn. 1,400 By Investments 2,000
To Partners’ Capital By R.D.D. 6,000
- Ramesh 1,000
- Suresh 500
- Naresh 500 2,000
12,000 12,000
Naresh’s Capital A/c.
Dr. Cr.
Particulars ` Particulars `
To Drawings 5,000 By Balance b/d. 27,000
By General Reserve 7,500
To Naresh’s Legal Heir’s Loan 34,500 By Goodwill A/c. 4,000
(Bal. Fig.) By Profit & Loss Suspense A/c. 500
By Revaluation A/c. 500
39,500 39,500
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Working Notes
1) Share of Goodwill
Total Profits Loss
Average Profit
No.of years
30,000 6,000
3
24,000
3
= 8,000
Goodwill = Average Profit × No. of years purchase
= 8,000 × 2
= ` 16,000
Naresh’s share in Goodwill = 16000 × ¼
= ` 4,000
2) Naresh’s Share of Profit till date of death
1 3
Naresh’s Share = 8,000
4 12
= ` 500
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