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Retirement or Death of a partner Test - 52

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Retirement or Death of a partner Test - 52
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  • Question 1
    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 R & S agree to sacrifice $$1/10$$th share to T in the ratio of $$2:3$$.
    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) * (2/5) =2/50
    S's sacrifice in favour of T = (1/10) * (3/5) = 3/50
    New profit sharing ratio = Old ratio - Sacrificing ratio
    R's new share = (3/5) - (2/50) = 28/50
    S's new share = (2/5) - (3/50) = 17/50
    T's share = 1/10 or 5/50
    Therefore, new profit sharing ratio of R : S : T = 28 : 17 : 5
  • Question 2
    1 / -0
    A,B & C are equal partners. They decided to take D who brought in Rs.$$36,000$$ as goodwill. The new profit sharing ratio is $$3:3:2:2$$. The journal entry for goodwill will be-

    A Capital A/c      Dr.
    B Capital A/c      Dr.
    C Capital A/c      Dr.
       To D Capital A/c    		$$6,000$$
    $$6,000$$
    $$24,000$$




    $$36,000$$
    Cash A/c      Dr.
       To A Capital A/c
       To B Capital A/c
       To C Capital A/c    		$$36,000$$




    $$6,000$$
    $$6,000$$
    $$24,000$$
    Cash A/c      Dr.
       To A Capital A/c
       To B Capital A/c
       To C Capital A/c    		$$36,000$$




    $$24,000$$
    $$6,000$$
    $$6,000$$
    Goodwill A/c     Dr.
       To A Capital A/c
       To B Capital A/c
       To C Capital A/c    		$$36,000$$




    $$12,000$$
    $$12,000$$
    $$12,000$$
  • Question 3
    1 / -0
    N & Z are partners in a firm sharing profits and losss in the ratio of $$3:2$$. S joins the firm for $$1/3$$rd share. and is to pay Rs.$$5,000$$ as premium for goodwill but cannot pay anything. As between N and Z, they decided to share profits and losses equally. It was agreed that goodwill has to be adjusted through partner's capital account.
    Required journal entry-

    N Capital A/c      Dr.
    Z Capital A/c      Dr.
       To S A/c    		$$4,000$$
    $$1,000$$



    $$5,000$$
    S Capital A/c      Dr.
       To N Capital A/c
       To Z Capital A/c    		$$5,000$$



    $$4,000$$
    $$1,000$$
    S Capital A/c      Dr.
       To N Capital A/c
       To Z Capital A/c    		$$5,000$$



    $$1,000$$
    $$4,000$$
    Premium for Goodwill A/c      Dr.
       To N Capital A/c
    To Z Capital A/c    		$$20,000$$



    $$8,000$$
    $$12,000$$
  • Question 4
    1 / -0
    A & B are partners having capital of Rs.$$29,000$$ & Rs.$$15,000$$. Reserve shown in balance sheet was Rs.$$10,000$$. C is admitted as a new partner introducing a capital of Rs.$$21,000$$. New parofit sharing ratio is $$5:3:2$$. Profit on revaluation of assets & liabilities were Rs.$$5,000$$. C is to bring premium for goodwill in cash. Goodwill amount being calculated on the basis of C's share in the profits and capital contributed by him. Premium for goodwill to be brought in new partner C should be ________
  • Question 5
    1 / -0
    A & B are sharing profits and losses in the ratio of $$3:2$$. C joins the firm for $$1/3$$rd share and is to pay Rs.$$20,000$$ as permium for goodwill but cannot pay anything. As between A & B, they decided to share profits and losses equally. Required journal entry

    A Capital A/c      Dr.
    B Capital A/c      Dr.
         To Coodwill A/c    		$$36,000$$
    $$24,000$$



    $$60,000$$
    Goodwill A/c      Dr.
       To A Capitla A/c
       To B Capital A/c     		$$60,000$$




    $$36,000$$
    $$24,000$$

    Goodwill A/c         Dr,
       To A Capital A/c
    To B Capital A/c    		$$60,000$$




    $$30,000$$
    $$30,000$$
    Premium for Goodwill A/c        Dr.
        To A Capital A/c
        To B Capital A/c    		$$60,000$$



    $$24,000$$
    $$36,000$$
  • Question 6
    1 / -0
    A & B are sharing profits & losses in the ratio of $$3:2$$. C is coming as a new partner who pays Rs.$$25,000$$ as premium fro goodwill. The profit sharing ration among A,B & C is equal. If premium money is retained in business which of the following journal entry is correct for sharing permium for goodwill?
    A Capital A/c                     Dr.
    B Capital A/c                     Dr.
       To Premium for Goodwill A/c    		$$20,000$$
    $$5,000$$



    $$25,000$$
    Premium for Goodwill A/c         Dr.
       To A Capital A/c
       To B Capital A/c    		$$25,000$$



    $$5,000$$
    $$20,000$$
    Premium for Goodwill A/c     Dr.
       To A Capital A/c
       To B Capital A/c    		$$25,000$$



    $$20,000$$
    $$5,000$$
    Premium for Goodwill A/c     Dr.
       To A Capital A/c
       To B Capital A/c    		$$25,000$$



    $$15,000$$
    $$10,000$$
  • Question 7
    1 / -0
    X & Y share profits & losses as $$1:2$$. They agree to admit Z (who is also in business on his own) as a third partner.
    At the time of admission of Z goodwill was appearing in balance sheet at Rs.$$14,000$$ which was revalued at Rs.$$18,000$$. Z brings the following assets into the partnership:
    Goodwill- Rs.$$6,000$$ Furniture-Rs.$$2,800$$, Stock-Rs.$$13,600$$
    After admission of Z, goodwill will appear at _______ in the balance sheet.
  • Question 8
    1 / -0
    A,B & C were equal partners with goodwill $$Rs.1,20,000$$ in the balance sheet and they agreed to take D as an equal partner on the term that he should bring $$Rs.1,60,000$$ as his capital and goodwill, his share of goodwill was evaluated at $$Rs.60,000$$ and the goodwill account is to be written off before admission. What will be the treatment for goodwill?
    Solution
    At the time of admission of a new partner, goodwill brought in by new partner is distributed among old partners in their sacrificing ratio and before that goodwill which exist in balance sheet is distributed among old partner in their old ratio.
    In the given question - 
    Old ratio (A, B and C) = 1 : 1 : 1
    New ratio (A, B, C and D) = 1 : 1 : 1 : 1
    Sacrificing ratio = Old ratio - New ratio 
    A's sacrifice = (1/3) - (1/4) = 1/12
    B's sacrifice = (1/3) - (1/4) = 1/12
    C's sacrifice = (1/3) - (1/4) = 1/12
    Goodwill already exist in the books is distributed among old partner in old ratio. Journal entry fir this would be :
          Goodwill A/c          Dr.       120000 
                   To A's Capital A/c                 40000
                   To B' Capital A/c                   40000
                   To C's Capital A/c                  40000
    Goodwill brought in by new partner is then distributed among sacrificing partners in sacrificing ratio. 
  • Question 9
    1 / -0
    A & B are partners sharing profits and losses in the ratio of $$3:2$$. C joins the firm for $$1/3$$rd share, and is to pay Rs.$$40,000$$ as premium for goodwill but cannot pay anything. As netween A and B, they decided to share profits and losses equally. Goodwill already appearing in balance sheet is $$1,00,000$$ Required journal entry

    A Capital A/c      Dr.
    B Capital A/c      Dr.
       To Goodwill A/c    		$$72,000$$
    $$48,000$$



    $$1,20,000$$
    Goodwill A/c      Dr.
       To A Capital A/c
       To B Capital A/c    		$$1,20,000$$



    $$72,000$$
    $$48,000$$
    Goodwill A/c      Dr.
       To A Capital A/c
       To B Capital A/c    		$$20,000$$



    $$12,000$$
    $$8,000$$
    Premium for Goodwill A/c      Dr.
       To A Capital A/c
       To B Capital A/c    		$$20,000$$



    $$8,000$$
    $$12,000$$
  • Question 10
    1 / -0
    A & B were partners sharing profits & losses in the ratio of $$3:1$$. C was admitted to the firm on the following terms:
    C would provide Rs.$$1,00,000$$ as a capital and pay Rs.$$20,000$$ as goodwill for his $$1/3$$rd share in future profits. Goodwill account would not appear in the books. A,B & C would share profits equally. Which of the following journal is correct in relation to premium for goodwill Rs.$$20,000$$ brought in by new partner?

    Premium for Goodwill A/c      Dr.
    B Capital A/c                         Dr.
       To A Capital A/c    		$$20,000$$
    $$5,000$$



    $$25,000$$
    Premium for Goodwill A/c      Dr.
       To A Capital A/c
       To B Capital A/c    		$$20,000$$



    $$15,000$$
    $$5,000$$
    Premium for Goodwill A/c      Dr.
       To A Capital A/c
       To B Capital A/c    		$$20,000$$



    $$10,000$$
    $$10,000$$
    Premium for Goodwill A/c      Dr.
    A Capital A/c           Dr.
       To B Capital A/c    		$$20,000$$
    $$5,000$$



    $$25,000$$
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