Retirement or Death of a partner Test

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Retirement or Death of a partner Test - 40

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Weekly Quiz Competition

Question 1
1 / -0

A, B and C are partners sharing profits in the ratio of $$4 : 3: 2$$. B retires. A and C decide to share profits in the future in the ratio of $$5 : 3$$. The gaining ratio will be _______.

A
$$11 : 13$$

B
$$4 : 2$$

C
$$3 : 5$$

D
$$13 : 11$$

Solution

Old ratio (A, B and C) = 4 : 3 : 2
New ratio (A and C) = 5 : 3
Gaining ratio = New ratio - Old ratio
A's gain = (5/8) - (4/9) = 13/72
C's gain - (3/8) - (2/9) = 11/72
Therefore, gaining ratio of A and C = 13 : 11
Question 2
1 / -0

X, Y and Z are partners sharing profits & losses in the ratio of $$4/8:1/3:2/9$$ respectively. Y retires. The gaining ratio and the new profit sharing ratio will be _________.

A
$$1 : 1, 1 : 1$$

B
$$1 : 2, 1 : 2$$

C
$$2 : 1, 2 : 1$$

D
none of these

Solution

Old ratio (X, Y and Z) = 4/9 : 1/3 : 2/9 or 4 : 3 : 2
If Y retires and no information for new share and gaining and sacrificing ratio is given, then gaining and new profit sharing will be same as old ratio.
Therfore, in the given question gaining and sacrificing ratio is 4 : 2 or 2 : 1
Question 3
1 / -0

A and B are two partners sharing profits in the ratio of $$3: 2$$. They admit C into partnership as a partner. A gives 1/3rd of his share while B gives $$1/10$$th from his share. The new profit sharing ratio will be __________.

A
$$3 : 4 : 3$$

B
$$6 : 1 : 3$$

C
$$2 : 4 : 3$$

D
$$10 : 9 : 6$$

Solution

Old ratio (A and B) = 3 : 2
Sacrificing ratio = Old ratio * surrender ratio
A's sacrifice = (3/5) * (1/3) = 1/5
B's sacrifice = (2/5) * (1/10) = 1/25
New ratio = Old ratio - sacrificing ratio
A's new ratio = (3/5) - (1/5) = 2/5
B's new ratio = (2/5) - (1/25) = 9/25
C's share = A's sacrifice + B's sacrifice
= (1/5) + (1/25)
= 6/25
New profit sharing ratio = A : B : C
= 2/5 : 9/25 : 6/25
= 10 : 9 : 6
Question 4
1 / -0

X, Y and Z are partners sharing profits & losses in the ratio of $$4/9$$: $$1/3$$: $$2/9$$ respectively. Y retires, and his share is taken up by X and Z in the ratio of $$13:11$$. The new profit sharing ratio will be _________.

A
$$3 : 5$$

B
$$1 : 1$$

C
$$5 : 3$$

D
none of these

Solution

Old ratio (X, Y and Z) = 4/9 : 1/3 : 2/9 or 4 : 3 : 2
Y's share = (3/9)
Share of Y taken by X = (3/9) * (13/24) = 13/72
Share of Y taken by Z = (3/9) * (11/24) = 11/72
New ratio = Old ratio + Share taken from Y
X's new share = (4/9) + (13/72) = 45/72
Z's new share = (2/9) + (11/72) = 27/72
Therefore, new profit sharing ratio between X and Z = 45 : 27 or 5 : 3
Question 5
1 / -0

Under capitalisation of super profit method, goodwill is calculated by ___________.

A
no. of years purchased multiplied with average profits

B
no. of years purchased multiplied with super profits

C
summation of the discounted multiplied with super profits

D
super profit divided with expected rate of return

Solution

Formula for calculating goodwill by capitalisation of super profit method
Value of goodwill = (Super profit/Normal rate of return)x100
Therefore, D is the correct option.
Question 6
1 / -0

X, Y and Z share in the ratio of $$9:6:4$$. Y retires. X and Z decide to share the future profits in the same ratio in which Y and Z shared. The gaining ratio will be _______.

A
$$3 : 2$$

B
$$2 : 3$$

C
$$1 : 1$$

D
None of these

Solution

Old ratio (X, Y and Z) = 9 : 6 : 4
New ratio ( X and Z) = 6 : 4
Gaining ratio = New ratio - Old ratio
X's gaining ratio = (6/10) - (9/19) = 24/190
Zs gaining ratio = (4/10) - (4/19) = 36/190
Therefore, gaining ratio of X and Z = 24 : 36 or 2 : 3
Question 7
1 / -0

Under super profit method goodwill is calculated by ___________.

A
no. of years purchased multiplied with average profits

B
no. of years purchased multiplied with super profits

C
summation of the discounted multiplied with super profits

D
super profit divided with expected rate of return
Question 8
1 / -0

The profits and losses for the last 4 years are Losses Rs. 20,000; Losses Rs. 5,000; Profits Rs. 1,96,000 & Profits Rs. 1,52,000.The average capital employed in the business is Rs. 4,00,000. The rate of interest expected from capital invested is 12%. The remuneration of partners is estimated to be Rs. 2,000 per month. The value of goodwill from two years' purchase of super profits based on the average of four years is __________.

A
Rs. 18,000

B
Rs. 17,500

C
Rs. 17,000

D
Rs. 16.500

Solution
Question 9
1 / -0

X, Y and Z are partners sharing profits & losses in the ratio of 4/9:1/3:2/9 respectively. Y retires and surrenders 13/72nd from his share in favour of X and the remaining In support of Z. The gaining ratio will be ______.

A
13 : 11

B
11 : 13

C
5 : 3

D
3 : 5

Solution

Old ratio (X,Y and Z) = 4/9 : 1/3 : 2/9
Y's share = 1/3
Share of Y taken by X = (1/3) * (13/72) = 13/216
Share of Y taken by Z = (1/3) * (11/72) = 11/216
New ratio = Old profit share + share taken from Y
X = (4/9) + (13/216) = 109/216
Z = (2/9) + (11/216) = 59/216
Gaining ratio = New ratio - old ratio
X = (109/216) - (4/9) = 13/216
Z = (59/216) - (2/9) = 11/216
Therefore, gaining ratio = 13 : 11
Question 10
1 / -0

Under annuity, basis goodwill is calculated by __________.

A
no. of years purchased multiplied with average profits

B
no. of years purchased multiplied with super profits

C
summation of the discounted multiplied with super profits

D
super profit divided with expected rate of return

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Retirement or Death of a partner Test - 40

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Retirement or Death of a partner Test - 40

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SHARING IS CARING

Question 1

$$11 : 13$$

$$4 : 2$$

$$3 : 5$$

$$13 : 11$$

Solution

Question 2

$$1 : 1, 1 : 1$$

$$1 : 2, 1 : 2$$

$$2 : 1, 2 : 1$$

none of these

Solution

Question 3

$$3 : 4 : 3$$

$$6 : 1 : 3$$

$$2 : 4 : 3$$

$$10 : 9 : 6$$

Solution

Question 4

$$3 : 5$$

$$1 : 1$$

$$5 : 3$$

none of these

Solution

Question 5

no. of years purchased multiplied with average profits

no. of years purchased multiplied with super profits

summation of the discounted multiplied with super profits

super profit divided with expected rate of return

Solution

Question 6

$$3 : 2$$

$$2 : 3$$

$$1 : 1$$

None of these

Solution

Question 7

no. of years purchased multiplied with average profits

no. of years purchased multiplied with super profits

summation of the discounted multiplied with super profits

super profit divided with expected rate of return

Question 8

Rs. 18,000

Rs. 17,500

Rs. 17,000

Rs. 16.500

Solution

Question 9

13 : 11

11 : 13

5 : 3

3 : 5

Solution

Question 10

no. of years purchased multiplied with average profits

no. of years purchased multiplied with super profits

summation of the discounted multiplied with super profits

super profit divided with expected rate of return

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