Change in Profit Sharing Ratio of Partners Test

Result

Change in Profit Sharing Ratio of Partners Test - 2

Score
-
out of -
Rank
-
out of -

TIME Taken - -

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Weekly Quiz Competition

Question 1
1 / -0

Any change in the relations of partners without affecting the existing of partnership firm is called ____

A
Revaluation

B
Retirement

C
Reassessment

D
Reconstitution

Solution

Any change in the relationship of partners amounts to reconstitution of the partnership firm. A change in the partnership agreement brings to an end the existing agreement and a new Agreement comes into being. This new agreement changes the relationship among the members of the partnership firm. Hence, whenever there is a change in the partnership agreement, the firm continues but it amounts to the reconstitution of the partnership firm.
Question 2
1 / -0

Which of the following item is not debited to the partners’ capital account?

A
General Reserve

B
Loss on revaluation

C
Advertisement suspense

D
Drawings

Solution

From the given items in the questions, General reserve is the only item which should not be debited to the partners’ capital account. General reserve will be credited to the partners in their old profit sharing ratio.
Question 3
1 / -0

Which of the following is responsible for the Reconstitution of Partnership?

A
Both Change in existing profit sharing ratio and Retirement/death of a partner

B
Change in existing profit sharing ratio

C
Change in the value of Debtors

D
Retirement/death of a partner

Solution

Reconstitution of the firm can take place on the following occasions:

1.Change in the profit sharing ratio of the existing partners

2.Admission of a new partner

3.Retirement of an existing partner

4.Death of a partner
Question 4
1 / -0

A, B and C are sharing profits and losses in the ratio 5:3:2 with effect from 01/04/2013 they decide to share profit and losses equally. Calculate B partner’s gain share

A
1/10th share

B
1/20th share

C
1/25th share

D
1/30th share

Solution

Calculation of gain or sacrificing ratio:

Formula : Old Share – New Share

A = 5/10 – 1/3 = 5/30 Sacrifice

B = 3/10 – 1/3 = 1/30 Gain

C = 2/10 - 1/3 = 4/30 Gain
Question 5
1 / -0

Goodwill of the firm is 30,000. Gain of A is 1/6 and Sacrifice of B is 1/6. How will be adjust goodwill?

A
Debit Goodwill with Rs.10,000 and Credit A and B with Rs.5,000 each

B
Debit A and B with 15,000 each and Credit Goodwill with Rs.30,000

C
Debit B and Credit A with Rs.5,000

D
Debit A and Credit B with Rs.5,000

Solution

In this case adjustment will be made as follows:

1.Goodwill of the firm Rs.30,000 (given)

2.A’s Gain share in goodwill 30,000 × 1/6 = 5,000

3.B’s Sacrifice share of goodwill 30,000 × 1/6 = 5,000

Now, Debit the gainer and credit the sacrificing partner
Question 6
1 / -0

Which of the following is transferred to the partners capital account?

A
General Reserve

B
Creditors

C
Loan (short term)

D
Land and Building

Solution

General Reserve given in the balance sheet will be credited to the old partners in their old profit sharing ratio. While other items i.e. land and building, loan and creditors are shown in the balance sheet and any change in their value will be shown in the revaluation account.
Question 7
1 / -0

________ ratio in which the partners share all the accumulated profits, reserves, losses and fictitious assets in case of reconstitution of partnership firm

A
New Ratio

B
Sacrificing Ratio

C
Gaining Ratio

D
Old Ratio

Solution

All accumulated profits, reserves, losses and fictitious assets will be distributed by the old partners in their old ratio at the time of reconstitution of partnership firm.
Question 8
1 / -0

L, M and N are sharing profits and losses in the ratio of 5:3:2. If they all decide to share equally. Then who will sacrifice his share

A
C

B
B

C
A

D
No one will sacrifice

Solution

Calculation of Sacrificing ratio:

1.A = 5/10 – 1/3 = (+)5/30 Sacrifice

2.B = 3/10 – 1/3 = (-)1/30 Gain; - sign indicate Gain

3.C = 2/10 – 1/3 = (-)4/30 Gain; - sign indicate Gain

In the above question only A is sacrificing.
Question 9
1 / -0

Ram and Rohit shared profit and loss in the ratio of 3:2. With effect from 01/04/2012 they agreed to share profits equally. The goodwill of the firm was valued at 30000. Which partner account should be debited in this case for the adjustment

A
Ram Rs.3,000

B
Rohit Rs.30,000

C
Rohit Rs.3,000

D
Both Rohit Rs.3,000 and Ram Rs.3,000 1,500 each

Solution

Adjustment of goodwill amount at the time of change in profit sharing ratio:

Old Ratio = 3:2

New Ratio = 1:1

Ram’s Sacrifice = 3/5 – 1/2 = 1/15

Rohit’s Gain = 2/5 – 1/2 = 1/15

Rohit’s Gain of goodwill amount = 30,000 × 1/10 = 3,000
Question 10
1 / -0

E, F and G are partners sharing profits in 7 : 6 : 5 ratio. Their fixed capitals are Rs, 70,000, Rs. 40,000 and Rs. 80,000 respectively. It is now decided that the total capital of the firm should be Rs. 3,60,000 and should be in the profit sharing ratio of the partners. Calculate the amount of capital to be contributed by the individual partners.

A
E will contribute Rs 70,000; F 20,000 and G Rs 80,000

B
E will contribute Rs 20,000; F 80,000 and G Rs 70,000

C
E will contribute Rs 80,000; F 70,000 and G Rs 20,000

D
E will contribute Rs 70,000; F 80,000 and G Rs 20,000

Solution

Adjutsment of capital of partners:

Old Capitals = 70,000; 40,000 and 80,000

New Capitals = 1,40,000; 1,20,000 and 1,00,000 (3,60,000 in 7:6:5 ratio)

E’s capital A/c 70,000

F’s capital A/c 80,000

G’s capital A/c 20,000

User

Question Analysis

Correct -
Wrong -
Skipped -

My Perfomance

Score
-
out of -
Rank
-
out of -

Re-Attempt Weekly Quiz Competition

Change in Profit Sharing Ratio of Partners Test - 2

Result

Change in Profit Sharing Ratio of Partners Test - 2

Score

-

Rank

-

SHARING IS CARING

Question 1

Revaluation

Retirement

Reassessment

Reconstitution

Solution

Question 2

General Reserve

Loss on revaluation

Advertisement suspense

Drawings

Solution

Question 3

Both Change in existing profit sharing ratio and Retirement/death of a partner

Change in existing profit sharing ratio

Change in the value of Debtors

Retirement/death of a partner

Solution

Question 4

1/10th share

1/20th share

1/25th share

1/30th share

Solution

Question 5

Debit Goodwill with Rs.10,000 and Credit A and B with Rs.5,000 each

Debit A and B with 15,000 each and Credit Goodwill with Rs.30,000

Debit B and Credit A with Rs.5,000

Debit A and Credit B with Rs.5,000

Solution

Question 6

General Reserve

Creditors

Loan (short term)

Land and Building

Solution

Question 7

New Ratio

Sacrificing Ratio

Gaining Ratio

Old Ratio

Solution

Question 8

C

B

A

No one will sacrifice

Solution

Question 9

Ram Rs.3,000

Rohit Rs.30,000

Rohit Rs.3,000

Both Rohit Rs.3,000 and Ram Rs.3,000 1,500 each

Solution

Question 10

E will contribute Rs 70,000; F 20,000 and G Rs 80,000

E will contribute Rs 20,000; F 80,000 and G Rs 70,000

E will contribute Rs 80,000; F 70,000 and G Rs 20,000

E will contribute Rs 70,000; F 80,000 and G Rs 20,000

Solution

User

Question Analysis

My Perfomance

Score

-

Rank

-

Results Announcement on: coming Monday

Stay Tuned: We’ll update you on your result via email or SMS.