Retirement or Death of a partner Test

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Retirement or Death of a partner Test - 49

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Weekly Quiz Competition

Question 1
1 / -0

Decrease in liability at the time of retirement of partner is ________.

A
debited to Goodwill A/c

B
debited to Profit & Loss A/c

C
debited to Revaluation A/c

D
credited to Revaluation A/c

Solution

Revaluation account is an account prepared for revaluation of assets and reassessment of liabilities. It may be prepared at the admission, retirement or dissolution of a partnership firm.
In this account decrease in assets and increase in liability is debited and increase in asset and decrease in liability is credited. Difference between the two sides show profit and loss. Profit and loss on revaluation is distributed among existing partners.
Question 2
1 / -0

A, B & C partners in a firm 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 the original ratio of A & C.

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

A, B & C are partners sharing profits and losses in the ratio of 3:2:1. B retired from the firm. What is the gain ratio of the partners A and C?

A
3:2

B
3:1

C
3:7

D
2:1

Solution

Old Profit sharing ratio ( A, B and C ) = 3 : 2 : 1
New profit sharing ratio ( A and C ) = 3 : 1
Gaining ratio = new ratio - Old ratio
A's gaining ratio = (3/4 ) - ( 3/6 ) = (3/12)
B's gaining ratio = (1/4) = (1/6) = (1/12)
Therefore, gaining ratio of A and C is 3 : 1
Question 4
1 / -0

P, Q and R share profit and losses in the ratio of 4:3:2 respectively. Q retires and P and R decided to share future profits and losses in the ratio of 5:3. Then immediately H is admitted of 3/10 shares of profits half of which was gifted by P and remaining shares was taken by H equally form P and R. Calculate the new profit sharing ratio after H's admission and gain ratio of P and R.

A
New profit sharing ratio = 4:3:3 and Gain Ratio = 13:11

B
New profit sharing ratio = 3:3:4 and Gain Ratio = 11:13

C
New profit sharing ratio = 4:4:3 and Gain Ratio = 13:11

D
New profit sharing ratio = 5:3:2 and Gain Ratio = 11:13

Solution
Question 5
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 ratio of 3:1.

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 = 3/9
B's share taken by A = (3/9) * (3/4) = 3/12
B's share taken by C = (3/9) * (1/4) = 1/12
New ratio = Old ratio + Share taken from B
A's new share = (4/9) + (3/12) = 25/36
C's new share = (2/9) + (1/12) = 11/36
Therefore, new share of A and C = 25 : 11
Question 6
1 / -0

X, Y & Z are partners sharing profits and losses in the ratio of 3:2:1. Y retired from the firm. New profit sharing ratio between X & Z is 5:3. What is the gain ratio of the partners X & Z?

A
3:2

B
3:1

C
3:7

D
3:5

Solution

Old Profit sharing ratio ( X, Y and Z ) = 3 : 2 : 1
New profit sharing ratio ( X and Z ) = 5 : 3
Gaining ratio = New ratio - Old ratio
X's gaining ratio = (5/8 ) - ( 3/6 ) = (3/24)
Z's gaining ratio = (3/8) = (1/6) = (5/24)
Therefore, gaining ratio of X and Z is 3 : 5
Question 7
1 / -0

A, B & C are sharing profits in 4:3:2 ratio. B retires. If A & C shares profits of B in 5:3, then find the new profit sharing ratio.

A
47:25

B
17:11

C
31:11

D
14:21

Solution

Old ratio (A, B and C) = 4 : 3 : 2
B's share = 3/9
Share of B taken by A = (3/9) * (5/8) = 15/72
Share of B taken by C = (3/9) * (3/8) = 9/72
New ratio = Old ratio + Share taken from B
A's new share = (4/9) + (15/72) = 47/72
C's new share = (2/9) + (9/72) = 25/72
Therefore, new profit share of A and C = 47 : 25
Question 8
1 / -0

Decrease in assets at the time of retirement of partner is _________.

A
debited to Goodwill A/c

B
debited to Profit & Loss A/c

C
debited to Revaluation A/c

D
credited to Revaluation A/c

Solution

Revaluation account is an account prepared for revaluation of assets and reassessment of liabilities. It may be prepared at the admission, retirement or dissolution of a partnership firm.
In this account decrease in assets and increase in liability is debited and increase in asset and decrease in liability is credited. Difference between the two sides show profit and loss.
Profit and loss on revaluation is distributed among existing partners.
Question 9
1 / -0

Increase in assets at the time of retirement of partner is _______.

A
debited to Goodwill A/c

B
debited to Profit & Loss A/c

C
debited to Revaluation A/c

D
credited to Revaluation A/c

Solution

Revaluation account is an account prepared for revaluation of assets and reassessment of liabilities. It may be prepared at the admission, retirement or dissolution of a partnership firm.
In this account decrease in assets and increase in liability is debited and increase in asset and decrease in liability is credited. Difference between the two sides show profit and loss.
Profit and loss on revaluation is distributed among existing partners.
Question 10
1 / -0

A, B & C partners in a firm 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 and C if B gives his share to A only.

A
7:2

B
25:11

C
11:7

D
7:3

Solution

Old ratio (A, B and C) = 4 : 3 : 2
Share of B taken by A = 3/9
New share = Old share + Share taken from B
A's new share = (4/9) + (3/9) = 7/9
C's new share = (2/9) + 0 = 2/9
Therefore, new share of A and C = 7 : 2

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Retirement or Death of a partner Test - 49

Result

Retirement or Death of a partner Test - 49

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SHARING IS CARING

Question 1

debited to Goodwill A/c

debited to Profit & Loss A/c

debited to Revaluation A/c

credited to Revaluation A/c

Solution

Question 2

7:2

25:11

11:7

2:1

Solution

Question 3

3:2

3:1

3:7

2:1

Solution

Question 4

New profit sharing ratio = 4:3:3 and Gain Ratio = 13:11

New profit sharing ratio = 3:3:4 and Gain Ratio = 11:13

New profit sharing ratio = 4:4:3 and Gain Ratio = 13:11

New profit sharing ratio = 5:3:2 and Gain Ratio = 11:13

Solution

Question 5

7:2

25:11

11:7

2:1

Solution

Question 6

3:2

3:1

3:7

3:5

Solution

Question 7

47:25

17:11

31:11

14:21

Solution

Question 8

debited to Goodwill A/c

debited to Profit & Loss A/c

debited to Revaluation A/c

credited to Revaluation A/c

Solution

Question 9

debited to Goodwill A/c

debited to Profit & Loss A/c

debited to Revaluation A/c

credited to Revaluation A/c

Solution

Question 10

7:2

25:11

11:7

7:3

Solution

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