Retirement or Death of a partner Test

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Retirement or Death of a partner Test - 50

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Weekly Quiz Competition

Question 1
1 / -0

A, B & C are partners sharing profits & losses in the ratio of 3:2:1. B retired from the firm. Partners A & C decided to take his share in 3:1 ratio. What is the new ratio of the partners A & C?

A
3:2

B
3:1

C
3:7

D
2:1

Solution

Old ratio (A, B and C) = 3 : 2 : 1
Share of B = 2/6
Share of B taken by A = (2/6) * (3/4) = 3/12
share of B taken by C = (2/6) * (1/4) = 1/12
New ratio = Old ratio + Share taken from B
A's new share = (3/6) + (3/12) = 9/12
C's new share = (1/6) + (1/12) = 3/12
Therefore, new share of A and c is 9 : 3 or 3 : 1
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. B gives his share to A and C in the original ratio of A & C. What is the gain ratio?

A
4:2

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 share = Old share + 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
Gaining ratio = New ratio - Old ratio
A's gaining ratio = (6/9) - (4/9) = 2/9
C's gaining ratio = (3/9) - (2/9) = 1/9
Therefore, gaining ratio of A and C is 2 : 1
Question 3
1 / -0

Find the goodwill from the following information:
Capital employed Rs. $$8,25,000$$
Rate of normal return Rs. $$10\%$$
Future Maintainable profit Rs. $$1,50,000$$
Annuity factor Rs. $$3.17$$

A
Rs. $$4,75,500$$

B
Rs. $$2,61,525$$

C
Rs. $$3,13,975$$

D
Rs. $$2,13,975$$
Question 4
1 / -0

A firm of X,Y & Z has a total capital investment of Rs.$$3,60,000$$. The firm earned net profit during the last four years as Rs.$$56,000$$, Rs.$$64,000$$, Rs.$$96,000$$ and Rs.$$80,000$$. The fair return on the net capital employed is $$15\%$$. Value of goodwill if it is based on $$3$$ years purchase of the average super profits of past $$4$$years.

A
Rs.$$37,500$$

B
Rs.$$50,000$$

C
Rs.$$60,000$$

D
Rs.$$40,000$$
Question 5
1 / -0

Find the goodwill of the firm using capitalization method from the following information:
Total Capital Employed Rs.$$8,00,000$$
Reasonable Rate of Return $$15\%$$
Profits for the year Rs$$12,00,000$$

A
Rs.$$82,00,000$$

B
Rs.$$12,00,000$$

C
Rs.$$72,00,000$$

D
Rs.$$42,00,000$$

Solution

Goodwill using capitalization method:
Step 1: Capitalized value of profits: Profits/Reasonable Rate of Return=$$Rs.12,00,000$$/$$0.15$$=$$Rs.80,00,000$$
Step 2: Capital employed=$$Rs.8,00,000$$ (given)
Step 3: Value of Goodwill=Step 1 - Step 2= $$Rs.80,00,000$$-$$Rs.8,00,000$$= $$Rs.72,00,000$$
Question 6
1 / -0

Average profit of a firm is Rs.$$1,20,000$$. The rate of capitalization is $$12\%$$. Assets and liabilities of the firm are $$10,000$$ & Rs.$$4,25,000$$ respectively. The value of goodwill of the firm is ________________.

A
Rs.$$3,25,000$$

B
Rs.$$2,25,000$$

C
Rs.$$5,25,000$$

D
Rs.$$4,25,000$$
Question 7
1 / -0

Which of the following formula is/are used for valuation goodwill under super profit basis?

A
Goodwill $$=$$ Super profit * No. of years purchases.

B
Goodwill $$=$$ Super profit * annuity factor.

C
Goodwill $$=$$ $$\dfrac{Super profit}{Capitalisation rate} X 100$$.

D
All of the above.

Solution

Following are various method of valuation of goodwill under super profit basis:
1. Super profit basis = Super profit * No. of years purchase
2. Annuity basis = Super profit * Annuity factor
3. Capitalisation basis = (Super profit/ Capitalisation rate) * 100
Question 8
1 / -0

A & B are partners for $$5:3$$.They take C and new profit sharing ratio was $$4:3:1$$. Memorandum revaluation A/c is opened to show assets and liabilities at original values. How profits will be shared?

A
In the first part of the Memorandum Revaluation A/c profit will be sharred in the ratio of $$4:3:1$$ by A,B & C respectively and in the second part profit will be written back in the ratio of $$5:3$$ by A and B respectively.

B
In the first part of the Memorandum Revaluation A/c profit will be shared in the ratio of $$4:3:1$$ by A,B &C respectively and in second part profit will written back in the sacrifying ratio

C
In first part of Memorandum Revaluation A/c profit will be shared in the ratio of $$5:3$$ by A & B respectively and in second part profit will written back in the ratio of $$4:3:1$$ by A,B &C respectively

D
None of the above
Question 9
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. B gives his share to A & C in ratio of 3:1. What is the gain ratio?

A
7:2

B
3:1

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) * (3/4) = 3/12
Share of B taken by C = (3/9) * (1/4) = 1/12
New share = Old share + Share taken from B
A's new share = (4/9) + (3/12) = 25/36
C's new share = (2/9) + (1/12) = 11/36
Gaining ratio = New artio - Old ratio
A's gaining ratio = (25/36) - (4/9) = 9/36
C's gaining ratio = (11/36 ) - (2/9) = 3/ 36
Therefore, gaining ratio of A and C is 9 : 3 or 3 : 1
Question 10
1 / -0

On the admission of a new partner, it is believed that the assets have changed in value. to record a decrease in the value of an asset the double entry should be _____________________.

A
Debit-Asset A/c, Credit-Capital A/c

B
Debit-Asses A/c, Credit-Revaluation A/c

C
Debit-Revaluation A/c, Credit-Capital A/c

D
Debit-Revaluation A/c, Credit-Asset A/c

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Re-Attempt Weekly Quiz Competition

Capital employed	Rs. $$8,25,000$$
Rate of normal return	Rs. $$10\%$$
Future Maintainable profit	Rs. $$1,50,000$$
Annuity factor	Rs. $$3.17$$

Retirement or Death of a partner Test - 50

Result

Retirement or Death of a partner Test - 50

Score

-

Rank

-

SHARING IS CARING

Question 1

3:2

3:1

3:7

2:1

Solution

Question 2

4:2

25:11

11:7

2:1

Solution

Question 3

Rs. $$4,75,500$$

Rs. $$2,61,525$$

Rs. $$3,13,975$$

Rs. $$2,13,975$$

Question 4

Rs.$$37,500$$

Rs.$$50,000$$

Rs.$$60,000$$

Rs.$$40,000$$

Question 5

Rs.$$82,00,000$$

Rs.$$12,00,000$$

Rs.$$72,00,000$$

Rs.$$42,00,000$$

Solution

Question 6

Rs.$$3,25,000$$

Rs.$$2,25,000$$

Rs.$$5,25,000$$

Rs.$$4,25,000$$

Question 7

Goodwill $$=$$ Super profit * No. of years purchases.

Goodwill $$=$$ Super profit * annuity factor.

Goodwill $$=$$ $$\dfrac{Super profit}{Capitalisation rate} X 100$$.

All of the above.

Solution

Question 8

In the first part of the Memorandum Revaluation A/c profit will be sharred in the ratio of $$4:3:1$$ by A,B & C respectively and in the second part profit will be written back in the ratio of $$5:3$$ by A and B respectively.

In the first part of the Memorandum Revaluation A/c profit will be shared in the ratio of $$4:3:1$$ by A,B &C respectively and in second part profit will written back in the sacrifying ratio

In first part of Memorandum Revaluation A/c profit will be shared in the ratio of $$5:3$$ by A & B respectively and in second part profit will written back in the ratio of $$4:3:1$$ by A,B &C respectively

None of the above

Question 9

7:2

3:1

11:7

2:1

Solution

Question 10

Debit-Asset A/c, Credit-Capital A/c

Debit-Asses A/c, Credit-Revaluation A/c

Debit-Revaluation A/c, Credit-Capital A/c

Debit-Revaluation A/c, Credit-Asset A/c

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