Retirement or Death of a partner Test

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Retirement or Death of a partner Test - 21

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Weekly Quiz Competition

Question 1
1 / -0

A,B and C are three partners sharing profit and loss in the ratio of 3:2:1. B retires from the firm. What is the new profit sharing ratio of the remaining partners?

A
1:3

B
3:1

C
2:3

D
3:2

Solution

new profit sharing ratio =existing ratio-retiring ratio
so, new ratio = 3:1
Question 2
1 / -0

X,Y and Z are three partners in a firm. They are sharing profit and loss in the ratio of 2:2:1. Y retires from the firm on 31st March. The firm decided not to raise goodwill A/c in the books of a/c. What entry will be made for the treatment of goodwill at the time of retirement of Y?

A
Debit X and Z ,Credit Y (for share of Y in the gaining ratio)

B
Goodwill A/c Dr, Credit Y's Capital A/c

C
Goodwill A/c Dr,Credit X,Y and Z Capital A/c

D
Goodwill A/c Dr. Credit X and Z A/c

Solution

If goodwill is reputation of firm value in term of money if goodwill are raised in retirement then it will be debited,
but in case of firm decided to not raised then , entry is X capital a/c ....Dr
Z capital a/c.....Dr
To Y capital a/c.
Question 3
1 / -0

A,B and C are three partner sharing profit and loss 3:2:1 A dies on 30th June, 2012, If the total profit for the year ending 31st march ,2013 amounted to Rs. 30,000. What would be the share of profit to be credited to A's A/c ?

A
Rs.3750

B
Rs.5000

C
Rs.8000

D
Rs.5500

Solution

A partner are dies on 30th June 2012 sharing ratio is 3/6
Amount is given=30000
A's partner sharing profit =30000*3/6*3/12
=3750
Question 4
1 / -0

Upon a admission of Champak Lal in a partnership firm as a new partner for 1/4th share of profit, the goodwill of the firm is valued at Rs.40,000. Goodwill to be brought in cash by Champak will be ______.

A
Rs.40,000

B
Rs.10,000

C
Rs.30,000

D
Rs.20,000

Solution

goodwill of firm is 40000
share of incoming partner=1/4
=40000*1/4
=10000
Question 5
1 / -0

As per AS 26 only _____will be recorded in books of account .

A
hidden goodwill

B
full goodwill

C
purchased goodwill

D
all of the above

Solution

As per 26 only purchase goodwill will be recorded in book of accounts When goodwill is purchase by the firm in a consideration in cash or kinds of cash it shown in the balance sheet
Question 6
1 / -0

Which of these is not found in case of retirement /death of a partner?

A
Revaluation A/c

B
Realization of assets

C
Distribution of goodwill

D
Gaining ratio

Solution

Realization of assets
Realization acccount is prepared at the time of dissolution of partnership firm. this account is opened to find out profit or loss on realization of assets and payment of liabilities.
Question 7
1 / -0

Which of the following is the odd one?

A
General reserve A/c

B
Profit and Loss A/c

C
Dividend equalization reserve A/c

D
Goodwill A/c

Solution

General reserve A/c, Profit and Loss A/c, and Dividend equalization reserve A/c are all included in the Reserves and Surplus in the Balance Sheet of a company. However, Goodwill A/c is an intangible asset that is presented under Non-current assets in the Balance Sheet.
Question 8
1 / -0

As per super profit method goodwill = ____________.

A
Actual profit multiplied by No. of years of purchase

B
Normal profit multiplied by No. of years of purchase

C
Maintainable profit multiplied by No. of years of purchase.

D
Super profit multiplied by No. of years of purchase.

Solution

Super profit means excess profit that can be earned by a firm over and above the normal profit usually earned by similar firms under circumstances. Formula of calculating goodwill by Super profit basis is -
Goodwill = Super profit multiplied by No. of years of purchase
Question 9
1 / -0

Which of these is not found in case of retirement/death of partner?

A
Sacrificing ratio

B
Raising goodwill

C
Distribution of accumulated profit and reserves and surplus

D
Payment to the legal representative
Question 10
1 / -0

X & Associates is a partnership firm, it intends to revalue its goodwill, average profit for the past five years is Rs. 15,000 per annum and goodwill is being valued 5 years purchase of super profit. What would be the value of the goodwill of the firm if normal profit of the firm is Rs.12,000?

A
Rs.15,000

B
Rs.30,000

C
Rs.20,000

D
Rs.25,000

Solution

Normal profit=12000
super profit =average profit - normal profit
=15000-12000=3000
then goodwill of the firm =super profit* no of purchase year
=3000*5
=15000

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Retirement or Death of a partner Test - 21

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Retirement or Death of a partner Test - 21

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SHARING IS CARING

Question 1

1:3

3:1

2:3

3:2

Solution

Question 2

Debit X and Z ,Credit Y (for share of Y in the gaining ratio)

Goodwill A/c Dr, Credit Y's Capital A/c

Goodwill A/c Dr,Credit X,Y and Z Capital A/c

Goodwill A/c Dr. Credit X and Z A/c

Solution

Question 3

Rs.3750

Rs.5000

Rs.8000

Rs.5500

Solution

Question 4

Rs.40,000

Rs.10,000

Rs.30,000

Rs.20,000

Solution

Question 5

hidden goodwill

full goodwill

purchased goodwill

all of the above

Solution

Question 6

Revaluation A/c

Realization of assets

Distribution of goodwill

Gaining ratio

Solution

Question 7

General reserve A/c

Profit and Loss A/c

Dividend equalization reserve A/c

Goodwill A/c

Solution

Question 8

Actual profit multiplied by No. of years of purchase

Normal profit multiplied by No. of years of purchase

Maintainable profit multiplied by No. of years of purchase.

Super profit multiplied by No. of years of purchase.

Solution

Question 9

Sacrificing ratio

Raising goodwill

Distribution of accumulated profit and reserves and surplus

Payment to the legal representative

Question 10

Rs.15,000

Rs.30,000

Rs.20,000

Rs.25,000

Solution

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