Retirement or Death of a partner Test

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Retirement or Death of a partner Test - 33

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Weekly Quiz Competition

Question 1
1 / -0

In the absence of proper agreement, representative of the deceased partner is entitled to the dead partner's share in ____________.

A
Profits till date, good will, joint life policy, share in revalued assets and liabilities.

B
Capital, good will, joint life policy, interest on capital, share in revalued assets and liabilities.

C
Capital, profits till date, good will, interest on capital, share in revalued assets and liabilities.

D
Capital, profits till date, good will, joint life policy, share in revalued assets and liabilities.
Question 2
1 / -0

A, B & C partners sharing profits & losses in the ratio of 4:3:2. B decided to retire from the firm. Calculate the new profit sharing ratio of A & C if B gives his share to A & C in equal proportion.

A
7:2

B
25:11

C
11:7

D
2:1

Solution

Old ratio (A, B and C) = 4 : 3 : 2
B's share of profit = 3/9
Share of B taken by A = (3/9) * (1/2) = 1/6
Share of B taken by C = (3/9) * (1/2) = 1/6
New ratio = Old ratio + share taken from B
A's new share = (4/9) + (1/6) = 11/18
C's new share = (2/9) + (1/6) = 7/18
Therefore, new share of A and C = 11 : 7
Question 3
1 / -0

Find the goodwill from the following information:
Capital employed - Rs.$$11,00,000$$
Rate of normal return - Rs.$$10\%$$
Future Maintainable profit - Rs.$$2,00,000$$
No. of year purchase -$$3$$ years

A
Rs.$$6,00,000$$

B
Rs.$$2,70,000$$

C
Rs.$$9,00,000$$

D
Rs.$$3,70,000$$
Question 4
1 / -0

The amount that the incoming partner pays for goodwill is known as ________________.

A
Adjusted goodwill

B
Premium for capital

C
Premium for goodwill

D
Hidden goodwill
Question 5
1 / -0

When required amount for premium for goodwill is not brought in by new partner, goodwill account is raised in the books of the firm by debiting goodwill account and crediting partners capital account in

A
New profit sharing ratio

B
Old profit sharing ratio

C
Scarifying ratio

D
Capital ratio
Question 6
1 / -0

A & B are partner sharing profits and losses in the ratio of $$3:2$$. C is coming as a new partner for $$1/3$$rd share. Calculate new profit sharing ratio among A, B & C.

A
$$6:4:5$$

B
$$5:4:6$$

C
$$3:2:3$$

D
$$2:3:3$$

Solution

Old ratio (A and B) = 3 : 2
C is admitted for 1/3rd share of profit
Let the combined share of all partners after C's admission = 1
Combined share of A and B after C's admission = 1 - (1/3) = 2/3
New ratio = Old ratio * Combined share of A and B
A's new ratio = (3/5) * (2/3) = 6/15
B's new ratio = (2/5) * (2/3) = 4/15
C's share = 1/3 or 5/15
Therefore, new ratio of A : B : C is 6 : 4 : 5
Question 7
1 / -0

The capital of B & D are Rs.$$90,000$$ and Rs.$$30,000$$ respectively with the profit sharing ratio $$3:1$$. The new ratio is $$5:3$$. The goodwill is valued Rs.$$80,000$$ as on the date. Amount payable by a gaining partner to a scarifying partner is

A
B will pay to D Rs.$$10,000$$

B
D will pay to B Rs.$$10,000$$

C
B will pay to D Rs.$$80,000$$

D
D will pay to B Rs.$$80,000$$

Solution
Question 8
1 / -0

R & S are in partnership sharing profit and losses at the ratio $$3:2$$. They take T as a new partner. Calculate the new profit sharing ratio, if T purchases $$1/10$$th share from R.

A
$$27:18:5$$

B
$$28:17:5$$

C
$$5:4:1$$

D
$$19:19:12$$

Solution

Old ratio (R and S) = 3 : 2
T is admitted for 1/10th share of profit
R's Sacrifice in favour of T = 1/10
New ratio = Old ratio - Sacrificing ratio
R's new share = (3/5) - (1/10) = 5/10
S's new share = (2/5) - (0) = 2/5 or 4/10
T's share = 1/10
Therefore, new ratio of R : S : T = 5 : 4 : 1
Question 9
1 / -0

Capital employed by a partnership firm is Rs. $$1,00,000$$. Its average profit is Rs. $$20,000$$. Normal rate of return is $$15\%$$. Value of goodwill.

A
Rs. $$33,333$$

B
Rs. $$30,000$$

C
Rs. $$23,333$$

D
Rs. $$43,667$$
Question 10
1 / -0

Sometimes, all the partners including the new partner may agree no to alter the book value of assets and liablities even when they agree to revalue them. In order to record this, ______ is opened.

A
Revaluation A/c

B
Memorandum Revaluation A/c

C
Memorandum Goodwill A/c

D
Memorandum Suspense A/c

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Retirement or Death of a partner Test - 33

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Retirement or Death of a partner Test - 33

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Question 1

Profits till date, good will, joint life policy, share in revalued assets and liabilities.

Capital, good will, joint life policy, interest on capital, share in revalued assets and liabilities.

Capital, profits till date, good will, interest on capital, share in revalued assets and liabilities.

Capital, profits till date, good will, joint life policy, share in revalued assets and liabilities.

Question 2

7:2

25:11

11:7

2:1

Solution

Question 3

Rs.$$6,00,000$$

Rs.$$2,70,000$$

Rs.$$9,00,000$$

Rs.$$3,70,000$$

Question 4

Adjusted goodwill

Premium for capital

Premium for goodwill

Hidden goodwill

Question 5

New profit sharing ratio

Old profit sharing ratio

Scarifying ratio

Capital ratio

Question 6

$$6:4:5$$

$$5:4:6$$

$$3:2:3$$

$$2:3:3$$

Solution

Question 7

B will pay to D Rs.$$10,000$$

D will pay to B Rs.$$10,000$$

B will pay to D Rs.$$80,000$$

D will pay to B Rs.$$80,000$$

Solution

Question 8

$$27:18:5$$

$$28:17:5$$

$$5:4:1$$

$$19:19:12$$

Solution

Question 9

Rs. $$33,333$$

Rs. $$30,000$$

Rs. $$23,333$$

Rs. $$43,667$$

Question 10

Revaluation A/c

Memorandum Revaluation A/c

Memorandum Goodwill A/c

Memorandum Suspense A/c

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