Question 1

1/-0

VK, MK and JK are partners sharing profits equally. Now they have decided to share future profits in their capital ratio i.e. 5:3:2. Idenfity who two partners are sacrificing.

SOLUTION

Calculation of sacrificing share:
Formula = Old ratio – New ratio
VK = 1/3 – 5/10 = 5/30 Gain
Mk = 1/3 – 3/10 = 1/30 Sacrifice
JK = 1/3 – 2/10 = 4/30 Sacrifice

Question 2

1/-0

X, Y and Z are sharing profits in the ratio of 50%; 40% and 10% respectively. Now, they have decided to share future profits equally. Identify the gainer partner.

SOLUTION

Calculation of gain or sacrifice:
Formula : Old Share – New Share
X = 5/10 – 1/3 = 1/6 Sacrifice
Y = 4/10 – 1/3 = 1/15 Sacrifice
Z = 1/10 - 1/3 = 7/30 Gain

Question 3

1/-0

AK, BK and CK are sharing profits in the ratio of 2:1:1. They have decided to share future profits in the ratio of 3:2:1. Find out the gainer partner.

SOLUTION

Calculation of gain or sacrifice:
Formula : Old Share – New Share
AK = 2/4 – 3/6 = No Sacrifice/ No Gain
BK = 1/4 – 2/6 = 1/12 Gain
CK = 1/4 - 1/6 = 1/12 Sacrifice

Question 4

1/-0

X, Y and Z are partners sharing profits in the ratio of 4:3:2. The partners have decided to share future profits in the ratio of 3:1:1. Find out the gainer partner.

SOLUTION

Calculation of gain or sacrifice:
Formula : Old Share – New Share
X = 4/9 – 3/5 = 7/45 Gain
Y = 3/9 – 1/5 = 6/45 Sacrifice
Z = 2/9 - 1/5 = 1/45 Sacrifice

Question 5

1/-0

P and Q are sharing profit and losses equally .With effects from current year they decided to share profits in the ratio of 4:3.Calculate individual partner’s gain and Sacrifice

SOLUTION

Calculation of gain or sacrifice:
Formula : Old Share – New Share
P = 1/2 – 4/7 = 1/14 Gain
Q = 1/2 – 3/7 = 1/14 Sacrifice

Question 6

1/-0

A,B and C who are presently sharing profit and losses in the ratio of 5:3:2, decide to share future profits and losses in the ratio of 2:3:5 with effect from 1st April 2012.Balance sheet shows land and building of 100000.What should be accounting g treatment if it decide it valued at ` 125000.By what amount revolution account should be credited in

SOLUTION

There is an increase in the value of building Rs.25,000 (1,25,000 – 1,00,000). This change should be recorded in the credit side of revaluation account at the time of preparation of revaluation account.

Question 7

1/-0

P, Q and R are partners sharing profits equally. They decided that in future R will get 1/5 share in profits and remaining profit will be shared by P and Q equally. On the day of change, firm’s goodwill is valued at ` 60,000. Identify the gain or sacrifice of the partners.

SOLUTION

Change in Ratio:
Old Ratio = 1:1:1
New Ratio = 1:2:2
Sacrifice or Gain of partners:
P = 1/3 – 1/5 = 2/15
Q = 1/3 – 2/5 = 1/15 Gain
R = 1/3 – 2/5 = 1/15 Gain

Question 8

1/-0

X, Y and Z are partners sharing profits in the ratio of 8/14; 4/14 and 2/14. Profit and Loss account shows a loss of Rs.2,800. Now partners have decided to share future profits in the ratio of 4:2:2. Who is the gainer and with what amount?

SOLUTION

Adjustment of loss at the time of change in profit sharing ratio:
Old Ratio = 8:4:2 OR 4:2:1
New Ratio = 4:2:2 OR 2:1:1
Formula = Old – New ratio
X’s Sacrifice 2/28; Y’s Sacrifice 1/28 and Z’s Gain 3/28.

Question 9

1/-0

Ram and Rohit shared profit and loss in the ratio of 3:2. With effect from 01/04/2012 they agreed to share profits equally. The goodwill of the firm was valued at 30000. Which partner account should be debited in this case for the adjustment

SOLUTION

Adjustment of goodwill amount at the time of change in profit sharing ratio:
Old Ratio = 3:2
New Ratio = 1:1
Ram’s Sacrifice = 3/5 – 1/2 = 1/15
Rohit’s Gain = 2/5 – 1/2 = 1/15
Rohit’s Gain of goodwill amount = 30,000 × 1/10 = 3,000

Question 10

1/-0

A, B and C are sharing profits and losses in the ratio 5:3:2 with effect from 01/04/2013 they decide to share profit and losses equally. Calculate B partner’s gain share

SOLUTION

Calculation of gain or sacrificing ratio:
Formula : Old Share – New Share
A = 5/10 – 1/3 = 5/30 Sacrifice
B = 3/10 – 1/3 = 1/30 Gain
C = 2/10 - 1/3 = 4/30 Gain

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