This page includes solutions of all the Practical problems of this Ch 6 TS Grewal 2021 edition.
Practical Problems
Question 1
Gita Radha and Garv were partners sharing profits in the ratio of 1/2, 2/5, 1/10.find the new ratio of the remaining partners if Garv retires.
Question 2
X Y and Z are partners sharing profits in the ratio of 1/2 3/10 and 1/5. Calculate the gaining ratio of remaining partners when Y retires from the firm.
Question 3
For the following particulars, calculate new profit-sharing of the partners.
(a) Shiv, Mohan and Hari were partners in a firm sharing profits in the ratio of 5:5:4. Mohan retired and his share was divided equally between Shiv and Hari.
(b) P,Q and R were partners sharing profit in the ratio of 5:4:1. P retires from the firm.
Question 4
R, S and M are partners sharing profit in the ratio of 2/5, 2/5 and 1/5.M decides to retire from the business and his share is taken by R and S in the ratio of 1:2. Calculate the new profit-sharing ratio.
Question 5
Sarthak, Vansh and Mansi were partners sharing profit in the ratio of 4:3:2. Sarthak retires. Vansh and Mansi will share future profits in the ratio of 2:1. determine the gaining ratio.
Question 6
(a) W X Y and Z are partners sharing profits and losses in the ratio of 1/3, 1/6, 1/3 and 1/6 respectively. Y retires and W, X and Z decide to share the profits and losses equally in future. Calculate gaining ratio.
(b) A, B and C are partners sharing profits and losses in the ratio of 4 : 3 : 2. C retires from the business. A is acquiring 4/9 of C’s share and balance is acquired by B. Calculate the new profit sharing ratio and gaining ratio.
Question 7
Kumar, Lakshya, Manoj and Naresh are partners sharing profits in the ratio of 3 : 2 : 1 : 4. Kumar retires and his share is acquired by Lakshya and Manoj in the ratio of 3 : 2. Calculate new profit sharing ratio and gaining ratio of the remaining partners.
Question 8
A, B and C were partners in a firm sharing profits in 8 : 4 : 3. B retires and his share is taken up equally by A and C. Find the new profit-sharing ratio.
Question 9
A, B and C are partners sharing profits in the ratio of 5 : 3 : 2. C retires and his share is taken up by A. Calculate new profitsharing ratio of A and B.
Question 10
P Q and R are partners sharing profits in the ratio of 7 : 5 : 3. P retires and it is decided that profit-sharing ratio between Q and R will be same as existing between P and Q. Calculate New profit sharing ratio and Gaining Ratio.
Question 11
Murli Naveen and Omprakash are partners sharing profits in the ratio of 3/8, 1/2 and 1/8. Murli retires and surrenders 2/3rd of his share in favour of Naveen and remaining share in favour of Omprakash. Calculate new profit-sharing ratio and gaining ratio of the remaining partners.
Question 12
Om Ram and Shanti are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. Ram retires from the firm. Calculate new profit-sharing ratio of Om and Shanti in the following circumstances:
(a) If Ram gives his share to Om and Shanti in the original ratio of Om and Shanti.
(b) If Ram gives his share to Om and Shanti in equal proportion.
(c) If Ram gives his share to Om and Shanti in the ratio of 3 : 1.
(d) If Ram gives his share to Om only.
Question 13
Sunil Shahid and David are partners sharing profits and losses in the ratio of 4:3:2. Shahid retires and the
goodwill is valued at ₹72,000. Calculate Shahid’s share of goodwill and pass the Journal entry for Goodwill.
Sunil and David decided to share future profits and losses in the ratio of 5:3
Question 14
P Q R and S were partners in a firm sharing profits in the ratio of 5 : 3 : 1 : 1. On 1st January, 2017, S retired from the firm. On S’s retirement the goodwill of the firm was valued at Rs. 4,20,000. The new profit-sharing ratio between P, Q and R will be 4 : 3 : 3. Showing your working notes clearly, pass necessary journal entry for the treatment of goodwill in the books of the firm on S’s retirement.
Question 15
Aparna Manisha and Sonia are partners sharing profits in the ratio of 3 : 2 :1. Manisha retired and goodwill of the firm is valued at Rs. 1,80,000. Aparna and Sonia decided to share future profits in the ratio of 3 : 2. Pass necessary journal entries.
Question 16
A B and C are partners sharing profits in the ratio of 3 : 2 : 1. B retired and the new profit-sharing ratio between A and C was 2 : 1. On B’s retirement, the goodwill of the firm was valued at Rs. 90,000. Pass necessary journal entry for the treatment of goodwill on B’s retirement.
Question 17
Aman Bimal and Deepak are partners sharing profits in the ratio of 2:3:5. The goodwill of the firm has been valued at ₹37,500. Aman retired. Bimal and Deepak decided to share profits equally in future. Calculate gain/sacrifice of Bimal and Deepak on Aman’s retirement and also pass necessary journal entry for the treatment of goodwill.
Question 18
Hanny Pammy and Sunny are partners sharing profits in the ratio of 3 : 2 : 1. Goodwill is appearing in the books at a value of Rs 60,000. Pammy retires and at the time of Pammy’s retirement, goodwill is valued at Rs. 84,000. Hanny and Sunny decided to share future profits in the ratio of 2 : 1. Record the necessary journal entries.
Question 19
A B and C are partners sharing profits in the ratio of 4/9 : 3/9 : 2/9. B retires and his capital after making adjustments for reserves and gain (profit) on revaluation stands at Rs.1,39,200. A and C agreed to pay him Rs.1,50,000 in full settlement of his claim. Record necessary Journal entry for adjustment of goodwill if the new profit-sharing ratio is decided at 5:3.
Question 20
M N and O are partners in a firm sharing profits in the ratio of 3 : 2 : 1. Goodwill has been valued at ₹60,000. On N’s retirement, M and O agree to share profits equally. Pass the necessary journal entry for treatment of N’s share of goodwill.
Question 21
A B C and D are partners in a firm sharing profits in the ratio of 2 : 1 : 2 : 1. On the retirement of C, Goodwill was valued ₹1,80,000. A, B and D decide to share future profits equally. Pass the necessary journal entry for the treatment of goodwill.
Question 22
A, B and C were partners in a firm sharing profits in the ratio of 6 : 5 : 4. Their capitals were A – ₹1,00,000; B – ₹80,000 and C – ₹60,000 respectively. On 1st April, 2009, A retired from the firm and the new profit sharing ratio between B and C was decided as 1 : 4. On A’s retirement, the goodwill of the firm was valued at ₹1,80,000. Showing your calculations clearly, pass the necessary journal entry for the treatment of goodwill on A’s retirement.
Question 23
Sangeeta Saroj and Shanti are partners sharing profits and losses in the ratio of 5:3:2. Shanti retired and on the date of her retirement,following adjustments were agreed:
(a) The value of Furniture is to be increased by ₹12,000.
(b) The value of stock to be decreased by ₹10,000.
(c) Machinery of the book value of ₹50,000 is to be reduced by 10%.
(d) A provision for Doubtful Debts @5% is to be created on debtors of book value of ₹40,000.
(e) Unrecorded investment worth ₹10,000.
(f) An item of ₹1,000 included in bills payable is not likely to be claimed,hence,should be written back.
Pass necessary Journal entries.
Question 24
A B and C were partners sharing profits and losses in the ratio of 2:2:1 B retired on 31st March 2021.On the date of his retirement, some of the assets and liabilities appeared in the books follows:
Creditors Rs.70,000; Building Rs.1,00,000; Plant and Machinery Rs.40,000; Stock of Raw Materials Rs.2,000 Stock of Finished Goods Rs.30,000 and Debtors Rs.20,000.
Following was agreed among the partners on B’s retirement:
a. Building to be appreciated by 20%.
b. Plant and Machinery to be depreciated by 10%.
c. A Provision of 5% on Debtors to be created for Doubtful Debts.
d. Stock of Raw Materials to be valued at Rs.18,000 and Finished Goods at Rs.35,000.
e. An Old Computer previously written off was sold for Rs.2,000 as scrap.
f. Firm had to pay Rs. 5,000 to an injured employee.
Pass necessary Journal entries to record the above adjustments and prepare the Revaluation Account.
Question 25
Punit Ramit and Akshat were partners sharing profits equally. Akshit retired on 1st April,2021. Punit and Ramit decided to continue the business and share profits in the ratio of 3:2.They also decided to give effect to the change in values of assets and liabilities without changing their book values.
The book values and their revised values were as follows:
Particulars Book values(₹) Revised values(₹) Land 5,50,000 8,50,000 Building 2,50,000 2,10,000 Computers 1,00,000 70,000 Computers Software 5,00,000 4,00,000 Sundry Creditors 70,000 60,000 Workmen Compensation Claim .... 5,000
Pass an adjustment entry.
Question 26
X Y and Z are partners in a firm sharing profits and losses in the ratio of 3:2:1. Z retired from the firm on 1st April , 2021. On the date of Z’s retirement, following balances existed in the books of the firm:
General Reserve ₹1,80,000
Profit and Loss Account (Dr.) ₹30,000
Workmen Compensation Reserve ₹24,000 which was no more required
Employees Provident Fund ₹20,000
Pass necessary Journal entries for the adjustment of these items on Z’s retirement.
Question 27
Asha, Naveen and Shalini were partners in a firm sharing profits in the ratio of 5:3:2. Goodwill appeared in their books at a value of ₹80,000 and General Reserve at ₹40,000. Naveen decided to retire from the firm. On the date of his retirement, goodwill of the firm was valued at ₹1,20,000. The new profit ratio decided among Asha and Shalini is 2:3. Record necessary Journal entries on Naveen’s retirement.
Question 28
Ram, Laxman and Bharat are partners sharing profits in the ratio of 3 : 2 : 1. Goodwill is appearing in the books at a value of ₹1,80,000. Laxman retires and at the time of his retirement, goodwill is valued at ₹ 2,52,000. Ram and Bharat decided to share future profits in the ratio of 2 : 1. The Profit for the first year after Laxman retirement amount to ₹ 1,20,000. Give the necessary journal entries to record goodwill and to distribute the profit. Show your calculations clearly.
Question 29
Partnership Deed of C and D, who are equal partners, has a clause that any partner may retire from the firm on the following terms by giving a six-month notice in writing: The retiring partner shall be paid –
(a) the amount standing to the credit of his Capital Account and Current Account.
(b) his share of profits to the date of retirement, calculated on the basis of the average profit of the three preceding completed years.
(c) half the amount of the goodwill of the firm calculated at 11/2 times the average profit of the three preceding completed years.
C gave a notice on 31st March, 2020 to retire on 30th September, 2020, when the balance of his Capital Account was Rs.6,000 and his Current Account (Dr.) Rs.500. profits for the three preceding completed years ended 31st March, were: 2018 – Rs.2,800; 2019 – Rs.2,200 and 2020 – Rs.1,600.
Determine the amount due to C as per the partnership agreement.
Question 30
X Y and Z were partners in a firm sharing profits in the ratio of 2:2:1. Their balance sheet as at 31st March, 2021 was:
Y retired on 1st April, 2021 on the following terms:
(a) Goodwill of the firm was valued at ₹70,000 and was not to appear in the books.
(b) Bad debts of ₹2,000 were to be written off.
(c) Patents were considered as valueless.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of X and Z after Y’s Retirement.
Question 31
Kanika, Disha and Kabir were partners sharing profits in the ratio of 2 : 1 : 1. On 31st March, 2016, their Balance Sheet was as under:
Kanika retired on 1st April, 2016. For this purpose, the following adjustments were agreed upon:
(a) Goodwill of the firm was valued at 2 years purchase of average profits of three completed years preceding the date of retirement. The profits for the year:
2013-14 were ₹ 1,00,000 and for 2014-15 were ₹ 1,30,000.
(b) Fixed Assets were to be increased to ₹ 3,00,000.
(c) Stock was to be valued at 120%.
(d) The amount payable to Kanika was transferred to her Loan Account.
Prepare Revaluation Account, Capital Accounts of the partners and the Balance Sheet of the reconstituted firm.
Question 32
N, S and G were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 5. On 31st March, 2016 their Balance Sheet was as under:
G retired on the above ate and it was agreed that:
(a) Debtors of Rs. 6,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts will be maintained.
(b) Patents will be completely written off and stock, machinery and building will be depreciated by 5%.
(c) An unrecorded creditor of Rs. 30,000 will be taken into account.
(d) N and S will share the future profits in 2 : 3 ratio.
(e) Goodwill of the firm on G’s retirement was valued at Rs. 90,000.
Pass necessary journal entries for the above transactions in the books of the firm on G’s retirement.
Question 33
Ashok, Bhaskar and Chaman are partners in a firm, sharing profits and losses as Ashok 1/3, Bhaskar 1/2, and
Chaman 1/6 respectively. The Balance Sheet of the firm as at 31st March, 2021 was:
Chaman retired on 1st April, 2021 subject to the following adjustments:
(a) Goodwill of the firm be valued at ₹2,40,000. Chaman’s share of goodwill be adjusted into the Capital
Accounts of Ashok and Bhaskar who will share future profits in the ratio of 3:2.
(b) Plant and Machinery to be reduced by 10% and Furniture by 5%.
(c) Stock to be increased by 15% and Building by 10%.
(d) Provision for Doubtful Debts to be raised to ₹20,000.
Prepare Revaluation Account, Capital Account of Chaman and the Balance Sheet of the firm after Chaman’s retirement.
Question 34
Chintan, Ayush and Sudha were partners in a firm sharing profits and losses in the ratio of 5:3:2. On 31st March, 2019, their Balance Sheet was as follows:
Chintan retired on the above date and it was agreed that:
(a) Debtors of ₹5,000 were to be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts was to be created.
(b) Goodwill of the firm on Chintan’s retirement was valued at ₹1,00,000 and Chintan’s share of the same will be adjusted by debiting the Capital Accounts of Ayush and Sudha.
(c) Stock was revalued at ₹36,000.
(d) Furniture was undervalued by ₹9,000.
(e) Liability for workmen’s compensation of ₹2,000 was to be created.
(f) Chintan was to be pard ₹20,000 by cheque and the balance was to be transferred to his loan account.
Pass the necessary Journal entries in the books of the firm on Chinatn’s retirement.
Question 35
Pankaj, Naresh and Saurabh are partners sharing profits in the ratio of 3 : 2 : 1. On 1st April, 2021, Naresh retired and on that date, Balance Sheet of the firm was as follows:
Additional Information:
(a) Premises have appreciated by 20%, stock depreciated by 10% and provision for doubtful debts was to be made 5% on debtors. Further provision for legal damages is to be made for Rs. 1,200 and furniture to be brought up to Rs. 45,000. (b) Goodwill of the firm be valued at Rs. 42,000.
(c) Rs. 26,000 from Naresh’s Capital Account be transferred to his Loan Account and balance be paid through bank: if required, necessary loan may be obtained from bank.
(d) New profit-sharing ratio of Pankaj and Saurabh is decided to be 5 : 1.
Give the necessary Ledger Accounts and Balance Sheet of the firm after Naresh’s retirement.
Question 36
X Y and Z are partners sharing profits in the ratio of 4:3:2. Their balance sheet as at 31st March, 2021 stood as follows:
Y retired on 1st April, 2021 after giving due notice. Following adjustments in the books of the firm were agreed:
(a) Land and Building be appreciated by 10%.
(b) Provision for Doubtful Debts is no longer necessary since all the debtors are good.
(c) Stock be appreciated b 20%.
(d) Adjustments be made in the accounts to rectify a mistake previously committed whereby y was credited in excess by ₹810, while X and Z were debited in excess of ₹420 and ₹390 respectively.
(e) Goodwill of the firm be valued at ₹5,400 and Y’s share of the same be adjusted to the capital accounts of X and Z who were going to share future profits in the ratio 2:1.
(f) It was decided by X and Z to settle Y’s account immediately on his retirement.
Prepare: (i) Revaluation Account; (ii) Partner’s Capital Accounts and (iii) Balance Sheet of the firm after Y’s retirement.
Question 37
A B and C are partners sharing profits and losses in the ratio of 4:3:3. Their Balance Sheet as at 31st March, 2021 is:
On 1st April, 2021, B retired from the firm on the following terms:
(a) Goodwill of the firm is to be valued at ₹14,000.
(b) Stock, Land and Building are to be appreciated by 10%.
(c) Plant and Machinery and Computer Printer are to be reduced by 10%.
(d) Sundry Debtors are to be considered good.
(e) Provision for legal charges to be made ₹2,000.
(f) Amount payable to B is to be transferred to his Loan Account.
Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of A and C after B’s retirement.
Question 38
Following is the Balance Sheet of X, Y and Z as at 31st March, 2021. They shared profits in the ratio of 3:3:2:
On 1st April, 2021, Y decided to retire from the firm on the following terms:
(a) Stock is agreed to be valued at ₹1,12,000.
(b) Provision for Doubtful Debts to be increased to ₹6,000.
(c) Fixed Assests be appreciated by 10%.
(d) Goodwill of the firm, valued at ₹80,000 and the amount due to retiring partners be adjusted in X’s and Z’s Capital Accounts.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet to give effect to the above.
Question 39
X Y and Z are partners sharing profit and losses in the ratio of 3:2:1. Balance Sheet of the firm as at 31st March, 2021 was as follows:
Z retired on 1st April, 2021 on the following terms:
(a) Goodwill of the firm is to be valued at ₹34,800.
(b) Value of Patents is to be reduced by 20% and that of machinery to 90%.
(c) Provision for doubtful debts is to be @6% on debtors.
(d) Z took the Investment at market value.
(e) Liability for Workmen Compensation to the extent of ₹750 is to be created.
(f) A liability of ₹4,000 included in creditors is not to be paid.
(g) Amount due to Z to be paid as follows:
₹5,067 immediately, 50% of the balance within one year and the balance by a draft for 3 Months.
Give necessary Journal entries for the treatment of goodwill, prepare Revaluation Account, Capital Accounts and the Balance Sheet of the new firm.