Chapter- 6 & 7 Retirement And Death

1. P, Q and R are partners sharing profits in the ratio of 5 : 4 : 3. Q retires and P and R decide to share future profits equally. Gaining Ratio will be :

2. Gaining Ratio’ means :

3. A, B and C are partners sharing profits in the ratio of 1/4 : 3/10 : 9/20. The New ratio on the retirement of C will be :

4. A, B and C are partners sharing profit or loss in the ratio of 4 : 3 : 2. C retires and after C’s retirement 4 and B agreed to share profit or loss in the ratio of 4 : 3 in future. Their gaining ratio will be :

5. On the death of a partner, the amount due to him will be credited to :

6. A, B and C are partners with profit sharing ratio 4 : 3 : 2. B retires and goodwill was valued ₹1,08,000. If A & C share profits in 5 : 3, find out the goodwill shared by A and C in favour of B.

7. At the time of retirement of a partner, profit on revaluation will be credited to :

8. A, B and C are sharing profits in the ratio of 3 : 2 : 1. B retires and on the day of B’s retirement Goodwill is valued at ₹60,000. A and C decided to share future profits in the ratio of 3 : 2. Journal entry will be :

9. Gaining Ratio’ means :

10. A, B and C are partners sharing profits in the ratio of 5 : 2 : 1. If the new ratio on the retirement of A is 3 : 2, what will be the gaining ratio?

11. A, B and C are equal partners in a firm. B retires and the remaining partners decide to share the profits of the new firm in the ratio of 5 : 4. Gaining ratio will be :

12. P, Q and R are sharing profits and losses equally. R retires and the goodwill is appearing in the books at ₹30,000. Goodwill of the firm is valued at . ₹1,50,000. Calculate the net amount to be credited to R’s Capital A/c.

13. P, Q and R are partners sharing profits in the ratio of 4 : 3 : 2. Q retires and his share was taken up by P and R in the ratio 3 : 2. New profit sharing ratio will be :

14. What journal entry will be recorded for deceased partner’s share in profit from the closure of last balance sheet till the date of his death?

15. P, Q and R were partners sharing profits in the ratio 5 : 3 : 2 respectively. P retires from the firm and Q and R decide to share future profits equally. Goodwill is valued at ₹50,000. Adjustment entry for goodwill will be :

16. A, B and C are partners sharing profits in the ratio of 3 : 4 : 5. B retires and the goodwill of the firm is valued at ₹42,000. A and C decide to share profits in the ratio of 3 : 4. Journal entry will be :

17. P, Q and R share profits in the ratio of 5:4:3.// retires and the new ratio is 5 : 3. If R is given ?6,000 as goodwill, journal entry will be :

18. P, Q and R have been sharing profits in the ratio of 8 : 5 : 3. P retires. Q takes 3/16th share from P and R takes 5/16th share from P. New profit sharing ratio will be :

19. X, Y and Z have been sharing profits in the ratio of 4 : 2 : 1 Z retires. X and Y take Z’s share equally. New profit sharing ratio will be :\

20. On 1st April, 2019 A, B and C were partners sharing profits and losses in the ratio of 5 : 3 : 2 respectively. On this date B retires. The new profit sharing ratio of A and C will be 3 : 2. Gaining ratio will be :

21. P, Q and R were partners sharing profits in the ratio of their Capital ‘ contribution which were ₹6,00,000; ₹4,00,000 and ₹5,00,000 respectively. Their books are closed on 31st March every year. P dies on 24th August, 2018. Under the partnership deed, deceased partner is entitled to his share of profit/loss to the date of death based on the average profits of preceding three years. Profits were 2015 ₹50,000; 2016 ₹1,20,000 (Loss); 2017 ₹30,000 and 2018 ₹60,000. P’s share of profit/loss will be :

22. L, P and G are three partners sharing profits in the ratio 15 : 9 : 8. G retires. L and P decided to share profits in equal ratio. Gaining ratio will be :

23. A, B and C were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. The capital balance are ₹50,000 for A, ?₹70,000 for B, ₹35,000 for C. B decided to retire from the firm and balance in. reserve on the date was ₹25,000. If goodwill of the firm was valued at ₹30,000 and profit on revaluation was ₹7,500 then, what amount will be payable to B1

24. X, Y and Z were partners in a firm sharing profits in the ratio of 3 : 2 : 1. X retired and the new profit sharing ratio between Yand Z will be 5 : 4. On Xs retirement the goodwill of the firm was valued at ₹54,000. Journal entry will be :

25. A, B and C are partners sharing profit or loss in the ratio of 3 : 2 : 1. B retires and after B’s retirement A and C agreed to share profit or loss in the ratio of
3 : 2 in future. Their gaining ratio will be :

26. A, B and C are partners in a firm sharing profit/loss in the ratio of 2 : 2 : 1. On March 31, 2019, C died. Accounts are closed on Dec., 31 every year. The sales for the year 2018 was ₹6,00,000 and the profits were ?60,000. The sales for the period from Jan. 1, 2019 to March 31, 2019 were ?2,00,000. The share of deceased partner in the current year’s profits on the basis of sales is :

27. Retinng partner is compensated for parting with the firm’s future profits in favour of remaining partners. The remaining partners contribute to such compensation amount in:

28. B, P and L sharing profits in the ratio 4:3:2. B retires, P and L decided to share profits in future in the ratio of 5 : 3. Gaining ratio will be :

29. A, B and C are partners in 3 : 4 : 2. B wants to retire from the firm. The profit on revaluation on that date was ₹36,000. New ratio of A and C is 5 : 3. Profit on revaluation will be distributed as :

30. A, B and C are partners sharing profits in the ratio of 1/2 : 1/4 : 1/4. New ratio on the retirement of B will be :

31. A, B and C are equal partners. C retires. He surrenders 3/5th of his share in favour of A and 2/5 th in favour of B. New ratio will be :

32. X, Y and Z are partners sharing profits in the ratio of 2 : 3 : 5. Goodwill already appearing in their books at a value of ₹60,000. X retires and Yand decided to share future profits equally. Journal entry w ill be :

33. A, B and C are partners sharing profit or loss in the ratio of 2 : 3 : 4. A retires and after A’s retirement B and C agreed to share profit or loss in the ratio of 3 : 4 in future. Their gaining ratio will be :

34. A, B and C share profits and losses of the firm equally. B retires from business and his share is purchased by A and C in the ratio of 2 : 3. New profit sharing ratio between A and C respectively would be :

35. Ram, Krishna and Ganesh were sharing profits and losses in the ratio of 5 : 3 : 2. Ram retires and Krishna and Ganesh share the future profits and losses equally. Goodwill of the firm is valued at ₹1,00,000. Calculate the amount of goodwill to be debited to Krishna’s and Ganesha’s Capital A/c.

36. P, Q and R have been sharing profits and losses in the ratio of 5 : 3 : 2. Q retires. His share is taken by P and R in the ratio of 2 : 1. New profit sharing ratio will be:

37. P, Q and R were partners sharing profits in the ratio 2 : 2 : 1 .Q retires and the new profit sharing ratio of P and R will be 3 : 1. Gaining ratio will be :

38. On retirement of a partner, goodwill will be credited to the Capital Account of:

Retiring Partner
(B) Remaining Partners
(C) All Partners
(D) None of the Above

39. What treatment is made of accumulated profits and losses on the retirement of a partner?

Credited to all partner’s capital accounts in old ratio.
(B) Debited to all partner’s capital accounts in old ratio.
(C) Credited to remaining partner’s capital accounts in new ratio.
(D) Credited to remaining partner’s capital accounts in gaining ratio.

40. What journal entry will be recorded for writing off the goodwill already existing in Balance Sheet at the time of retirement of a partner?

41. How goodwill is recorded on the retirement of a partner?