Retirement and Death of Partner

Retirement/Death of partner

Important Questions by AARISH SIR

1. X, Y and Z are partners sharing profit in the ratio of 3 : 2 : 1. Y retires and on the date of Y’s retirement. Goodwill already appears in the books at a value of 48,000. New ratio of X and Y is 3 : 2. Pass the necessary journal entries.
2. X, Y and Z are partners sharing profits in the ratio 3 : 2 : 1. X retires from the partnership. In order to settle his claim the following revaluation of assets and liabilities was agreed upon:
   
   1. The value of machinery is increased by 50,000.
   2. The value of investment is increased by 4,000.
   3. A provision for outstanding bill standing in the books at 2,000 is now not required.
   4. The value of land & building is decreased by 24,000.
   Give journal entries if
   
   1. Partners decide to show the revalued amount in the balance sheet.
   2. Partners decide to show the original value of assets & liabilities in the balance sheet and Y and Z agree to share profits in the ratio of 2 : 1.

   Revaluation Account

   Date	Particulars	Amount	Date	Particulars	Amount
   	To land & building To partner’s capital A/C X 16,000 X 16,000 X 16,000	24,000 32,000		By machinery A/C By investment A/C By provision for outstanding bill A/C	50,000 4,000 2,000
   		56,000			56,000

   Memorandum revaluation A/C

   Date	Particulars	Amount	Date	Particulars	Amount
   	To land & Building A/C To machinery A/C To investment A/C To provision for outstanding bill A/C X 16,000 Y 10,667 Z 5,333	24,000 50,000 4,000 2,000 32,000		By machinery A/C By investment A/C By provision for outstanding bill A/C By land & Building By partner’s capital A/C X 21,333 Y 10,667	50,000 4,000 2000 24,000 32,000
   		1,12,000			1,12,000

3. A, B and C are partner’s sharing profit and losses in the ratio of ⅖, ⅖ and ⅕ respectively. C retires, A and B decide to share future profits and losses in the ratio 2 : 1. Calculate the gaining ratio.
4. Aman, Vikram and Sonu are partners sharing profits in the ratio of 4 : 3 : 1. Vikram retires selling his share of profits to Aman & Sonu for Rs. 8,100; Rs. 3,600 paid by Aman and 4,500 paid by Sonu. Profit for the year after Vikram retirement was Rs. 10,500.
   You are required:-
   
   1. To give necessary journal entries to record the transfer of Vikram’s share to Aman and Sonu.
   2. To calculate new profit sharing ratio and distribute the profits between A and C.
5. X, Y and Z were in a partnership sharing profits in the ratio of 5 : 3 : 2. X retires and the balance in reserve at the time of retirement of X was 20,000. Pass the necessary journal entry:-
   
   1. Partner’s decide to distribute the entire reserve
   2. Partner’s decide to distribute only the retiring partners share
   3. Partners decide to show entire amount of reserve in balance sheet and Y and Z share the gains equally.
6. A, B & C are partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1, their balance sheet on 31.12.17
   Calculate:-
   

   Liabilities	Amount	Assets	Amount
   Sundry creditors General Reserve Capital accounts A 20,000 B 40,000 C 30,000	40,000 5,000 90,000	Cash in hand Debtors Stock Furniture Building	20,000 25,000 30,000 10,000 50,000
   	1,35,000		1,35,000

   B died on 31^st march 2018 and as per partnership deed his executor were entitled for
   
   1. His capital as on the date of last balance sheet.
   2. His share in general reserve.
   3. His share of goodwill. The goodwill of the firm was valued at 48,000.
   4. His share of accrued profit, calculated on the basis of last year’s profit. The profit for the last year was Rs. 24,000
   5. Interest on capital up to the date of death at 9% per annum.
   6. Prepare B’s capital account