D. K. Goel solutions for अकाउंटेंसी वॉल्यूम १ एण्ड २ [अंग्रेजी] कक्षा १२ आईएससी chapter 4 - Retirement or Death of a Partner [Latest edition]

On the basis of above information, answer the following question:

In respect of goodwill, A's Capital Account will be:

On the basis of above information, answer the following question:

Net amount paid to B will be:

On the basis of above information, answer the following question:

In the above case, Interest on Partner's Capital:

On the basis of above information, answer the following question:

Interest on Capital allowed to partner's will be:

You are required to answer the following questions:

In respect of goodwill:

You are required to answer the following questions:

In respect of Workmen Compensation Reserve:

You are required to answer the following questions:

In respect of Investments:

You are required to answer the following questions:

Advertisement Suspense Account: 

You are required to give answer to the following question:

In respect of goodwill: 

You are required to give answer to the following question:

In respect of B’s share of profit:

You are required to give answer to the following question:

On death of a partner, the amount due to him will be transferred to:

You are required to give answer to the following question:

Choose the odd one:

How will you deal Goodwill at the time of retirement of a partner?

What are the adjustments required on retirement of a partner from the firm?

What is gaining ratio?

How is the gaining ratio calculated at the time of the retirement of a partner?

Give two circumstances in which Gaining Ratio may be applied.

How goodwill is recorded on the retirement or death of a partner?

P, Q and R share profits in the ratio of 5 : 4 : 3. R retires and the new ratio is 5 : 3. If R is given ₹ 60,000 as goodwill, what will be the journal entry?

State the purpose for which ‘sacrificing ratios’ are calculated.

State the purpose for which ‘gaining ratios’ are calculated.

Distinguish between sacrificing ratio and gaining ratio.

State the ratio in which profit or loss on revaluation will be shared by the partners when a partner retires.

Why are assets and liabilities revalued at the time of retirement of a partner?

How are accumulated profits and losses dealt with when a partner retires from a firm?

How would you calculate the amount payable to the representative of a deceased partner?

If a partner dies during the year, how will you find out the share of profit of the deceased partner?

Name five items which are credited to the account of the representatives of the deceased partner.

What is the entitlement of the legal representative of a deceased partner in the subsequent profits of the firm?

Name four items which are credited to the account of a deceased partner while calculating the amount due to his legal representatives.

What is gaining ratio?

When is a partner liable for debts incurred by the firm after his retirement?

Give two differences between Sacrificing Ratio and Gaining Ratio.

Give the Journal entry to distribute ‘Workmen Compensation Reserve’ of ₹ 70,000 at the time of retirement of Neeti when there is a claim of ₹ 25,000 against it. The firm has three partners Raveena, Neeti and Rajat.

How will the firm show the amount payable to the retiring partner, if it is not in a position to immediately pay the amount due to him on his retirement?

List any four items that may have to be deducted from a deceased partner's capital account while computing the amount payable to his legal representatives.

Give the formula for calculating the outgoing partner's share in the interim profits of the firm, on the basis of sales made by the firm.

Give the journal entry for closing the retiring partner's capital account when his share is paid to him privately by the remaining partners.

A, B and C are partners sharing profits in the ratio of `1/2:1/4:1/4`. On the retirement of B, the new ratio will be ______.

A, B and C are partners sharing profits in the ratio of `1/4:3/10:9/20`. On the retirement of C, the new ratio will be ______.

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

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. The gaining ratio will be ______.

P, Q and R share profits in the ratio of 5 : 4 : 3. R retires and the new ratio is 5 : 3. If R is given ₹ 6,000 as goodwill, P and Q will be debited from ₹ ______ and ₹ ______ respectively.

A, B and C are partners sharing profits in the ratio of 6 : 5 : 4. Calculate new profit sharing ratios if:

1. A retires
2. B retires
3. C retires

X, Y and Z are partners sharing profits in the ratio of `2/3 : 1/4: 1/12`. Calculate the new ratio if X retires.

L, M and O were partners in a firm sharing profits in the ratio of 3 : 2 : 2. M retired and his share was divided equally between L and O. Calculate the new profit sharing ratio of L and O.

A, B and C are partners sharing profits in the ratio of 4 : 3 : 2. B retires and his share was taken up by A and C in the ratio of 3 : 2. Find out the new ratio.

A, B and C are partners sharing profits in the ratio of 4 : 3 : 1. A retires and his share is taken over by B and C equally. Calculate the new ratio.

A, B and C are partners sharing profits in the ratio of 1/2 : 1/3 : 1/6. B retires and his share is taken by A and C in the ratio of 5 : 3. Calculate the new ratio.

X; Y and Z are partners sharing in the ratio of 2 : 2 : 1. Y retires and his share is entirely taken by Z. Calculate the new ratio.

P, Q and R are in partnership sharing profits and losses as 1/2, 2/6 and 1/6 respectively. R retires and his share is taken by P and Q in the ratio of 2 : 1. Immediately, Sis admitted for 1/4th share of profit, 1/3rd of which was given by P and the remaining share was taken equally from P and Q. Calculate new profit-sharing ratio after S's admission.

A, B and C were partners sharing profits in the ratio of 7 : 5 : 3. Find out the gaining ratio and new ratios when

1. A retires
2. B retires
3. C retires

On 1st April, 2022 Ashish, Namish and Aman were partners sharing profits and losses in the ratio of 2/5, 2/5 and 1/5 respectively. On this date Namish retires. The new profit sharing ratio of Ashish and Aman will be 3/4 and 1/4 respectively. Calculate gaining ratio.

On 1st April, 2022 A, B and C were partners sharing profits and losses in the ratio of A 5/10, B 3/10 and C 2/10 respectively. On this date B retires. The new profit sharing ratio of A and C will be A 3/5 and C 2/5. Calculate gaining ratio.

A, B and C are partners sharing profits in the ratio of 1/2 : 1/3 : 1/6. C retires and A and B decide to share future profits equally. Calculate the gaining ratio.

A, B, C and D are partners sharing profits in the ratio of 5 : 4 : 3 : 2. A retires and B, C and D decide to share the profits and losses equally in future. Calculate the gaining ratio.

L, M and N are three partners sharing profits in the ratio of 4 : 3 : 2 respectively. M retires and the goodwill is valued at ₹ 1,08,000. No goodwill account appears as yet in the books of the firm. L and N will share profits in future in the ratio of 5 : 3 respectively. Pass Journal Entry for goodwill.

A, B and C are sharing profits in the ratio of 4 : 3 : 2. Goodwill is appearing in the books at a value of ₹ 42,000. C retires and on the day of C’s retirement Goodwill is valued at ₹ 63,000. Pass the necessary journal entries.

A, B, C and D are partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1 : 1. A and C decided to retire from the firm. The goodwill of the firm was valued at ₹ 90,000. B and D decided to share future profits in the ratio of 5 : 3. Pass necessary journal entry for the treatment of goodwill.

Surender, Ramesh, Naresh and Mohan are partners in a firm sharing profits in 2: 1 : 2 : 1 ratio. On the retirement of Naresh, the Goodwill was valued at ₹ 72,000. Surender, Ramesh and Mohan decided to share future profits equally. Pass the necessary journal entry for the treatment of goodwill.

A, B, C and D are partners sharing profits in the ratio of 4 : 3 : 2 : 1. On the retirement of B, Goodwill was valued at ₹ 3,00,000. A, C and D decide to continue the firm sharing profits equally. Pass entries.

X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. Y retires selling his share to X and Z for 1,60,000, 1,00,000 being paid by X and ₹ 60,000 by Z. The profit for the year after Y’s retirement is ₹ 2,40,000.

Pass entries to (a) record the sale of Y’s share to X and Z, and (b) distribute the profit between X and Z.

A, B, C and D are partners sharing profits in the ratio of 4 : 3 : 2 : 2. C retires and the remaining partners decided to share future profits in 5 : 3 : 2. On the date of C’s retirement there was a debit balance of ₹ 30,800 in the profit and loss account. Show the necessary journal entry for the treatment of profit and loss account balance.

A, B and C are partners sharing profits and losses in the ratio of 2 : 2 : 1. A retires and the new ratio between B and C is agreed at 3 : 2. Give journal entries on A's retirement in the following case:

Investment Fluctuation Reserve appears in the books at ₹ 40,000, when Investments (market value ₹ 1,00,000) appear at ₹ 85,000.

Rohan, Riya and Priya were partners in a firm with profit sharing ratio of 4 : 2: 1. Priya retired on 1st September, 2024. On that day, the capitals of Rohan and Riya after all adjustments were ₹ 10,50,000 and ₹ 5,50,000 respectively. Total amount payable to Priya was ₹ 4,00,000 which was not paid to her until 31st March, 2025.

The Firm earned a profit of ₹ 50,000 during the period of 7 months ended on 31st March, 2025. Priya wants to exercise provisions of Section 37 of Indian Partnership Act. 1932.

Which of the two options available under Section 37 should be opted by Priya, if amount due to her was paid on 31st March, 2025?

X, Y and Z are partners in a firm sharing profits and losses equally. The balance sheet of the firm as at 31st March, 2024 stood as follows:

Z retires on 1st April, 2024 subject to the following adjustments:

1. Freehold Property be valued at ₹ 5,80,000.
2. Investments be valued at ₹ 47,000; and stocks be valued at ₹ 94,000;
3. A provision of 5% be made for doubtful debts.
4. Trade Marks are valueless.
5. An item of ₹ 12,000 included in creditors is not likely to be claimed.
6. Goodwill be valued at one year's purchase of the average profit of the past three years. Profits ending 31st March were 2022 ₹ 1,20,000; 2023 ₹ 1,00,000 and 2024 ₹ 95,000.

Pass journal entries, give capital accounts and the balance sheet of the remaining partners.

P, Q and R were partners in a firm sharing profits in the ratio of 2 : 3 : 5. On 31-3-2024 their Balance Sheet was as follows:

On the above date R retired from the firm due to his illness on the following terms:

1. Building was to be depreciated by ₹ 40,000.
2. Provision for doubtful debts was to be maintained at 20% on debtors.
3. Salary outstanding ₹ 5000 was to be recorded and creditors ₹ 4,000 will not be claimed.
4. Goodwill of the firm was valued at ₹ 72 000.
5. R was to be paid ₹ 15,000 in cash, through bank and the balance was to be transferred to his loan account.

Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of P and Q after R’s retirement.

Manoj, Naveen and Deepak were partners sharing profits and losses in the ratio of 4 : 3 : 2. As at 1st April, 2024, their Balance Sheet was as follows:

Deepak retired on the above date as per the following terms:

1. Goodwill of the firm was valued at ₹ 21,000.
2. Stock to be appreciated by 10%.
3. Provision for doubtful debts should be 5% on debtors.
4. Machinery is to be valued at 5% more than its book value.
5. Motor Car is revalued at ₹ 15,500. Retiring partner took over Motor Car at this value.
6. Deepak be paid ₹ 2,000 in cash and balance be transferred to his loan account.

Show necessary journal entries. Prepare Revaluation Account, Capital Accounts and Opening Balance Sheet of continuing partners.

Balance Sheet of P, Q and R who were sharing profits in proportion to their capitals stood as follows on 31 st March, 2025:

Q retired on this date and the following was agreed upon:

1. Inventory is overvalued by ₹ 5,000.
2. Land and Buildings are undervalued by ₹ 30,000.
3. Machinery be depreciated by 20%.
4. Provision for doubtful debts be made at 5%.
5. Old credit balances of Sundry Creditors ₹ 5,000 be written back.
6. Some investments of the firm (not mentioned in the Balance Sheet) are taken over by P for ₹ 35,000.
7. Goodwill of the firm is valued at 63,000.

P and R decided to share the future profits and losses in the ratio of 3 : 2. It was further agreed that the amount due to Q in his Current Account be paid in cash and the remaining balance should be transferred to his Loan Account.

Prepare Revaluation Account, Capital and Current Accounts of the partners (assuming all adjustments to be made through Current Accounts) and the Balance Sheet of P and R after Q’s retirement.

On the above date, Sameer retired and it was agreed that:

1. Debtors of 4,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts will be maintained.
2. An unrecorded creditor of 20,000 will be recorded.
3. Patents will be completely written off and 5% depreciation will be charged on stock, machinery and building.
4. Yasmin and Saloni will share future profits in the ratio of 3 : 2.
5. Goodwill of the firm on Sameer’s retirement was valued at ₹ 5,40,000.

Pass necessary journal entries for the above transactions in the books of the firm on Sameer’s retirement.

Following is the Balance Sheet of X, Y and Z as at 31st March, 2019. They shared profits in the ratio of 3 : 3 : 2. 

On 1st April, 2019, Y decided to retire from the firm on the following terms:

1. Stock to be reduced by ₹ 12,000.
2. Advertisement Suspense Account to be written off. 
3. Provision for Doubtful Debts to be increased to ₹ 6,000.
4. Fixed Assets be appreciated by 10%.
5. Goodwill of the firm, valued at ₹ 80,000 and the amount due to the retiring partners be adjusted in X’s and Z’s Capital Accounts.

Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet to give effect to the above.

A, B and C are in partnership sharing profits in the ratio of 3 : 2 : 1. On 28th February, 2025 C retires from the firm. Their Balance Sheet as at that date was as follows:

The following was agreed upon:

1. Goodwill of the firm is valued at ₹ 1,50,000. C sells his share of goodwill to A and B in the ratio of 4 : 1.
2. Stock is revalued at 3,00,000 and debtors are revalued at ₹ 1,50,000.
3. Outstanding expenses be brought down to 3,000.
4. Investments are sold at a loss of 10%.
5. C is paid off in full.

Prepare Revaluation Account, Capital Accounts and the Balance Sheet of the new firm.

Anand, Bihari and Shivin are equal partners in a firm. Bihari retires and his claim including his capital and his share of goodwill is ₹ 40,000. He is paid in kind, a vehicle valued at ₹ 20,000 which is unrecorded in the books of the firm till the date of retirement and the balance in cash.

You are required to give the journal entries for recording the payment to Bihari in the books of the firm.

The Balance Sheet of A, B and C who were sharing profits in proportion to 2 : 1 : 1 stood as follows as at 31st March, 2024:

The above balance sheet is wrong, since C has retired with effect from 1st January 2024. No adjustments have been made in the books on C’s retirement.

You are required to make them and redraft the Balance Sheet. The Goodwill of the firm was valued at ₹ 72,000.

On 31st March, 2024, the Balance Sheet of Saman, Harish and Meeta who were sharing profits and losses in the ratio of 2 : 3 : 2, stood as follows:

On 31st March, 2024, Harish retired from the firm and the remaining partners decided to carry on the business. It was agreed to revalue the assets and liabilities as follows:

1. Land and buildings be appreciated by 20%.
2. Machinery be depreciated by 20%.
3. Closing stock be valued at ₹ 4,50,000.
4. Provision for Doubtful Debts be made at 5% on Debtors.
5. Sundry creditors of ₹ 65,000 be written off.
6. Goodwill of the firm be valued at ₹ 5,60,000 and Harish’s share of the goodwill be adjusted in the accounts of Saman and Meeta who will share the future profits and losses in the ratio of 3 : 2.
7. The total capital of the newly constituted firm will be ₹ 35,00,000, which will be adjusted by opening Current Accounts.
8. Amount due to Harish was settled by accepting a bill of exchange in his favour payable after 4 months.

Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of the new firm on Harish’s retirement.

A, B and C are partners sharing profits in the ratio of 1/2 : 1/3 and 1/6 respectively. Their Balance Sheet as at 31st March, 2024 was as follows:

B retired on 1st April 2024 and the new ratio between A and C was agreed at 3 : 2. The following were agreed:

1. Goodwill of the firm is valued at ₹ 1,50,000.
2. Land & Buildings are to be increased by 10%.
3. Provision for Doubtful Debts is to be increased by ₹ 6 000.
4. Out of the insurance premium of ₹ 10,000 which was entirely debited to Profit and Loss Account, ₹ 2,000 be carried forward as unexpired insurance.
5. Creditors will be written back by ₹ 20,000.
6. Part of the stock which had been included at cost of ₹ 10,000 had been badly damaged in storage and could only expect to realise ₹ 2,000.
7. Total capital of the new firm will be ₹ 5,00,000 and will be in the new profit sharing ratio of continuing partners. B will be paid 1,50,000 on retirement and the balance after six months.

Prepare Revaluation Account, Capital Accounts and the Balance Sheet of the new firm.

A, B and C are partners sharing profits in 4 : 3 : 3. Their Balance Sheet as at 31st March 2022 was as follows:

C retires on 1st April, 2022 and A and B decide to share future profits in the ratio of 6 : 4. It is agreed that:

1. Goodwill of the firm is valued at ₹ 80,000.
2. Land & Building is undervalued by ₹ 1,00,000 and Stock is overvalued by 20%.
3. Provision for Doubtful Debts is to be decreased to ₹ 10,000.
4. Computer valued ₹ 30,000 was unrecorded in the books.

It was decided to pay off C by giving him this computer and the balance in annual instalments of ₹ 1,00,000 together with interest @ 10% p.a.

You are required to prepare:

1. Revaluation Account,
2. C’s Capital Account, and
3. C’s Loan Account till it is finally closed.

Lalit, Madhur and Neena were partners sharing profits as 50%, 30% and 20% respectively. On 31st March, 2025, their Balance Sheet was as follows:

On this date, Madhur retired and Lalit and Neena agreed to continue on the following terms:

1. The goodwill of the firm was valued at ₹ 51,000.
2. There was a claim for Workmen’s Compensation to the extent of ₹ 6,000.
3. Investment were brought down to ₹ 15,000.
4. Provision for bad debts was reduced by ₹ 1,000.
5. Madhur was paid ₹ 10,300 in cash and the balance was transferred to his loan account payable in two equal instalments together with interest @12% p.a.

Prepare Revaluation Account, Partner’s Capital Accounts and Madhur’s Loan Account till the loan is finally paid off.

R, S and T were partners in a firm sharing profits in 2 : 2 : 1 ratio. On 1-4-2025 their Balance Sheet was as follows:

S retired from the firm on 1-4-2025 and his share was ascertained on the revaluation of assets as follows:

Stock ₹ 40,000; Furniture ₹ 6,000; Plant and Machinery ₹ 18,000; Building ₹ 40,000; ₹ 1,700 were to be provided for doubtful debts. The goodwill of the firm was valued at ₹ 12,000.

S was to be paid ₹ 21,680 in cash on retirement and the balance in three equal quarterly instalments (starting from 30th June 2025) along with interest @ 12% p.a.

Prepare Revaluation Account, Partner's Capital Accounts, S's Loan Account and Balance Sheet on 1-4-2025.

P, Q and R were partners sharing profits and losses in the ratio of 5 : 3 : 2 respectively. On 31st March, 2024 the Balance Sheet of the firm stood as follows:

On this date Q decided to retire and for this purpose:

1. Goodwill was valued at ₹ 19,000;
2. Fixed assets were valued at ₹ 30,000;
3. Stock was considered as worth 10,000.

Q was to be paid through cash, brought in by P and R, in such a way as to make their capitals proportionate to their new profit sharing ratio which was to be P 3/5 and R 2/5.

Record these matters in the journal of the firm and prepare the resultant Balance Sheet.

P, Q and R are partners in a firm. R retires from the firm. On the date of retirement, ₹ 3,00,000 is due to him. It is agreed to pay him in instalments every year at the end of the year. Prepare R’s Loan Account in the following cases:

1. Five yearly instalments plus interest @ 15% p.a.
2. Instalments of ₹ 1,00,000 which already include interest @ 15% p.a. on the outstanding balance for the first four years and the balance including interest in the fifth year.

A, B and C are partners in a firm sharing profits in the ratio of 3 : 2 : 1. On 31st March 2022 C retired. Following balances were disclosed by the Firm's Balance Sheet on this date:

1. Capitals: A ₹ 10,00,000; B ₹ 6,00,000 and C ₹ 4,40,000.
2. Profit & Loss (Dr. Balance) ₹ 45,000.
3. Advertisement Expenditure ₹ 15,000.

Revaluation of Assets and re-assessment of liabilities resulted in a loss of ₹ 60,000. On the retirement of C, goodwill is valued at ₹ 1,80,000.

The amount payable to C is agreed to be paid in two yearly instalments of ₹ 2,00,000 each including interest @ 10% p.a. on the outstanding balance during the first two years and the balance including interest in the third year. Books are closed on 31st March every year.

Prepare C’s Loan Account till it is finally paid.

X; Y and Z were partners sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Their capital accounts showed the following balances:

Z retired on 31st March, 2022. All the partners agreed to revalue certain assets as follows:

Goodwill was agreed to be valued at ₹ 54,000. Z’s current account at the date of retirement showed a credit balance of ₹ 11,000. At the date of retirement Z was given 75,000 in cash and the balance were transferred to his loan account and were repaid (at the end of each year) in four equal instalments plus interest at 6% per annum on the annual balance.

After Z’s retirement, profits were to be shared in the ratio of 2 : 1 and all assets (except goodwill) would appear at their revised values.

You are required to show the Partnership Accounts giving effect to these transactions.

A, B and C are partners sharing profits in the proportion of 5 : 3 : 2. A retires from the firm on 31st March, 2014 and you are informed that:

1. A’s capital on 1st April, 2013 stood at ₹ 5,00,000 and interest on capital is to be allowed @ 8% p.a.
2. A has withdrawn ₹ 5,000 per month at the beginning of each month during the year 2013-14. Interest on drawings is to be charged @ 12% p.a.
3. A’s share of profit for the year 2013-14 (after all adjustments) amounts to ₹ 75,000.
4. Goodwill of the firm is worth ₹ 1,00,000.

B and C decide to share future profits equally. The amount due to A in excess of ₹ 5,00,000 is to be paid in cash immediately on retirement and the balance due to him is to be paid in annual instalments of ₹ 2,50,000 each, interest being calculated @ 12% p.a. on the unpaid balances. The first instalment was paid on 31st March 2015.

You are required to prepare A’s Capital Account and also his Loan Account until the payment of the whole amount due to him was made.

A, B and C were partners sharing profits in the ratio of 3 : 2 : 1 respectively. B retired on 31st March, 2024. On that date the capitals of A, B and C after all adjustments were ₹ 5,10,000; ₹ 3,30,000 and 1,80,000 respectively. Cash and bank balances on 31st March, 2024 were 30,000. B was to be paid through cash brought by A and C in a manner that their capitals are proportionate to their new profit-sharing ratio which was to be 5 : 3. Firm wants to maintain a minimum cash balance of ₹ 50,000. Pass necessary journal entries.

The Balance Sheet of A, B and C, who were sharing profit and losses in the proportion of their capitals, as at 31st March, 2025 was as follows:

B retired on 1st April, 2025 and the following adjustments were made:

1. Building be appreciated by 20%, stock be depreciated by 10%, provision for doubtful debts be maintained at 5% and a provision for legal charges be created at ₹ 450.
2. The goodwill of the firm be fixed at ₹ 6,000 and B’s share be adjusted into A and C capital accounts.
3. ₹ 12,000 from B’s capital account be transferred to his loan account and balance be paid in cash, and
4. The capital of the new firm of A and C be fixed at ₹ 25,000 and the profit sharing ratio at 3 : 2. Capital accounts of partners be adjusted accordingly and any surplus or deficit be transferred to current accounts.

Prepare Revaluation Account, Capital Accounts and Balance Sheet of A and C.

Kushal Kumar and Kavita were partners in a firm sharing profit in the ratio 3:1:1. On 1st April 2012 their Balance Sheet was as follows:

On the above date Kavita retired and the following was agreed:

1. Goodwill of the firm was valued at ₹ 40,000.
2. Land was to be appreciated by 30% and building was to be depreciated by ₹ 1,00,000.
3. Value of furniture was to be reduced by ₹ 20,000.
4. Bad debts provision is to be increased to ₹ 15,000.
5. 10% of the amount payable to Kavita was paid in cash and the balance was transferred to her Loan Account.
6. Capitals of Kushal and Kumar will be in proportion to their new profit sharing ratio. The surplus/deficit, if any in their Capital Accounts will be adjusted through Current Accounts.

Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of Kushal and Kumar after Kavita’s retirement.

A, B and C were partners sharing profits and losses in 3 : 4 : 2. The following is the Balance Sheet of A, B and C as at 31st March, 2022:

Owing to falling health B retired on 30th June, 2022. It is agreed that:

1. The retiring partner shall be paid his share of profit in proportion to the period he served as a partner in the year of retirement. For this purpose, profit of the immediately preceding year will be taken as base.
2. The retiring partner will be entitled to his share of goodwill calculated at 3 times of the four year’s average profits. The profits for the year ending 31st March 2019, 2020 and 2021 were ₹ 32,000, ₹ 60,000 and ₹ 52,000 respectively.
3. Capital accounts of A and C will be readjusted by bringing in or paying out cash so that their capitals become in the new profit sharing ratio. ₹ 1,58,000 from B’s Capital Account will be paid in cash and the balance will be transferred to his Loan Account.

Prepare Journal entries, Capital Accounts and a Balance Sheet as at that date.

A, B and C are partners sharing profits and losses in the ratio of 2 : 2 : 1. The Balance Sheet of their business as at 31st March 2022 is given below:

C retired on 31st July 2022 and A and B decided to share future profits in the ratio of 2: 3.

The terms of retirement provide the following:

1. Machinery was to be revalued at ₹ 2,25,000.
2. Liability for the payment of gratuity to workers ₹ 16,000 is to be provided for.
3. Provision for bad debts is no more necessary.
4. Investments are to be taken over by the retiring partner at ₹ 60,000.
5. A provision for ₹ 5,000 be made in respect of an outstanding bill for repairs.
6. Goodwill of the firm is valued at ₹ 60,000 and profit upto the date of retirement was estimated at ₹ 40,000.
7. C was paid off in full and a bank loan of ₹ 1,00,000 is to be arranged for this purpose.
8. The capitals of A and B will be readjusted according to their new profit sharing ratio by bringing in or paying cash to the partners.

Prepare Revaluation Account, Capital Accounts of partners and the Balance Sheet of the new firm.

P, Q and R are in partnership sharing profits in the ratio of 3 : 2 : 1. R retires. Following balances appeared in their books:

Goodwill is agreed at ₹ 30,000. Sufficient money is to be introduced so that R is paid off and leave ₹ 4,000 in cash at bank. P and Q are to provide such sum as will make their capitals proportionate to their share of profits.

Prepare necessary entries and the new balance sheet.

X; Y and Z are partners sharing profits in the ratio of 4 : 2 : 3. Y retires. On this date his Capital after making adjustments for reserves and revaluation exists at ₹ 2,00,000. X and Z agreed to pay him ₹ 2,40,000 in full settlement of his account. Record necessary journal entry for the treatment of goodwill if X and Z decided to share future profits equally.

A, B and C were partners in a firm. B died on 31st August, 2022. B’s share of profit from the closure of the last accounting year till the date of death was to be calculated on the basis of the average of three completed years of profits before death. Profits for the years ending 31st March 2020, 2021 and 2022 were ₹ 40 000; ₹ 50,000 and ₹ 72,000 respectively. The firm closes its books on 31st March every year.

Calculate B’s share of profit till the date of her death and pass the necessary journal entry for the same assuming:

1. There is no change in the profit sharing ratio of A and C.
2. There is change in the profit sharing ratio of A and C and the new ratio is 7: 5.

Hari, Mohan and Sohan were partners in a firm sharing profits in 2 : 2 : 1 ratio. The firm closes its books on 31st March every year. Mohan died on 24-8-2025. On Mohan’s death the goodwill of the firm was valued at ₹ 75,000. The partnership deed provided that on the death of a partner his share in the profits of the firm in the year of his death will be calculated on the basis of last year’s profit. The profit of the firm for the year ended 31-3-2025 was ₹ 2,00,000. Calculate Mohan’s share of profit till the time of his death and pass the necessary journal entries for the treatment of goodwill and his share of profit.

A, B and C are sharing profits in the ratio of 4 : 3 : 2. A dies on 31st December, 2023. Accounts are closed on 31st March every year. Sales for the year ending 31st March, 2023 amounted to ₹ 4,00,000. Sales of ₹ 3,30,000 amounted between the period from 1st April, 2023 to 31st December, 2023. The profit for the year ending 31st March, 2023 amounted to ₹ 60,000.

Calculate the deceased partner's share in the current year's profits of the firm.

A, B and C were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their books are closed on March 31st every year.

B died on 1st August, 2023. The executors of B are entitled to:

1. His share of Capital i.e., ₹ 4,00,000 along-with his share of goodwill. The total goodwill of the firm was valued at 1.5 year's purchase of last year's profit.
2. His share of profit up to his date of death on the basis of sales till date of death. Sales for the year ended March 31, 2023 was ₹ 4,00,000 and profit for the same year was ₹ 80,000. Sales shows a growth trend of 25% and percentage of profit earning is increased by 4%.
3. Amount payable to B was transferred to his executors.

Pass necessary Journal Entries and show the workings clearly.

The Balance Sheet of Sindhu, Rahul and Kamlesh, who were sharing profits in the ratio of 3 : 3 : 4 respectively, as at 31st March, 2023 was as follows:

Sindhu died on 31st July 2023. The partnership deed provided for the following on the death of a partner:

1. Goodwill of the firm be valued at two year's purchase of average profits for the last three years which were ₹ 80,000.
2. Sindhu’s share of profit till the date of his death was to be calculated on the basis of sales. Sales for the year ended 31st March, 2023 amounted to ₹ 8,00,00 and that from 1st April to 31st July 2023 ₹ 3,00,000. The profit for the year ended 31st March, 2023 was ₹ 2,00,000.
3. Interest on capital was to be provided @ 6% p.a.

Prepare Sindhu’s Capital Account to be rendered to his executor.

A, B and C were partners in a firm sharing profits in the ratio of 5 : 3 : 2. The Balance Sheet as at 31 -3-2023 was as follows:

A died on 30-9-2023 and B and C decided to share future profits in the ratio of 7 : 3. Under the partnership agreement the executors of a deceased partner were entitled to:

1. Amount standing to the credit of partner's capital account.
2. Interest on capital at 12% per annum.
3. Share of goodwill on the basis of four years purchase of last three years average profit.
4. Share of profit from the closing of the last financial year to the date of death on the basis of last year’s profit. Profits for the year 2021, 2022 and 2023 were ₹ 8,000; ₹ 12,000 and ₹ 7,000 respectively.

Prepare A’s Capital account to be rendered to his executors.

Ram, Ghanshyam and Vrinda were partners in a firm sharing profits in the ratio of 4 : 3 : 1. The firm closes its books on 31st March every year. On 1st February, 2024 Ghanshyam died and it was decided that the new profit-sharing ratio between Ram and Vrinda will be equal. The Partnership Deed provided for the following on the death of a partner:

1. His share of goodwill be calculated on the basis of half of the profits credited to his account during the previous four completed years: The firm's profit for the last four years were. 2019-20 - ₹ 1,20,000, 2020-21 - ₹ 80,000, 2021 -22 - ₹ 40,000, and 2022-23 - ₹ 80,000.
2. His share of profit in the year of his death was to be computed on the basis of average profits of past two years.

Pass necessary Journal entries relating to goodwill and profit to be transferred to Ghanshyam’s Capital Account. Also show your workings clearly.

R, S and T were partners in a firm sharing profits in the ratio of 4 : 3 : 3. T died on 1st August, 2024 and goodwill was valued at ₹ 7,50,000 on that day. Adjustment entry for goodwill was passed as follows:

Gain on revaluation of assets and reassessment of liabilities credited to T’s account was ₹ 45,000.

Calculate new profit sharing ratio and total amount of gain (profit) on revaluation of assets and reassessment of liabilities.

Aryan, Sahira and Tulsi are partners in a firm with profit sharing ratio of 3 : 2 : 4. Sahira died on 31st March, 2025. The new profit sharing ratio between Aryan and Tulsi was agreed to be 2 : 3.

The capital accounts of partners on 31st March, 2025, before considering the firm’s goodwill were: Aryan ₹ 11,40,000; Sahira ₹ 10,65,000; Tulsi ₹ 12,30,000.

Aryan and Tulsi agreed to pay the executors of Sahira ₹ 11,85,000 immediately by issuing a cheque from the firm, the amount being contributed by Aryan and Tulsi in such a way that their capitals would become proportionate to their new profit sharing ratio.

You are required to pass necessary journal entries.

A, B and C were partners in a firm. A died on 31.3.2018 and the Balance Sheet of the firm on that date was as under:

On A’s death it was found that patents were valueless, furniture was to be brought down to ₹ 24,000, plant was to be reduced by ₹ 10,000 and there was a liability of ₹ 7,000 on account of workmen's compensation.

Pass the necessary journal entries for the above at the time of A’s death.

Anuj, Tanuj and Vishesh were partners in a firm sharing profits in 2 : 2 : 1. Tanuj died on 31st July 2023. His capital on 1st April, 2023 was ₹ 6,00,000. You are informed that:

1. Tanuj is entitled to 6% p.a. interest on his capital.
2. He is entitled to his share of profit till the date of death on the basis of last year’s profit which were ₹ 2,40,000.
3. Land and Building with book value of ₹ 12,00,000 is undervalued by 40%.
4. Executors of Tanuj were paid 10,00,000 in full settlement of his account.

Prepare Tanuj’s Capital Account.

Tripti, Atishay and Radhika were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their Balance Sheet as at 31-3-2024 was as follows:

Tripti died on 30th June, 2024. According to the partnership deed, the executors of the deceased partner are entitled to:

1. Balance in partner’s capital account.
2. Salary @ ₹ 12,500 per quarter.
3. Share of goodwill calculated on the basis of twice the average of past three year’s profits and share of profits from the closure of the last accounting year till the date of death on the basis of last year’s profit. Profits for 2021-22 and 2022-23 were ₹ 1,00,000 and ₹ 1,50,000 respectively.
4. Tripti withdrew ₹ 20 000 on 1st May, 2024 for her personal use.

Prepare Tripti’s Capital Account to be rendered to her executors.

A, B, C and D were partners sharing profits in the ratio of 5 : 3 : 2 : 2. B died on 1st March, 2022. Goodwill of the firm was valued at ₹ 6,00,000. A, C and D decided to share future profits equally. Give necessary journal entry.

Rita, Nina and Mita are partners in a firm sharing profits and losses in the ratio of 3:2:1. Mita dies on 1st April, 2017. On the date of her death, it was decided to value goodwill on the basis of two year’s purchase of
weighted average profits of the firm for the last three years.

The profits of the last three years and weights assigned were:

You are required to:

1. Calculate the firms goodwill on the date of Mita’s death (show working formula).
2. Pass the necessary journal entry to credit Mita’s capital account with her share of goodwise.

Bina and Anita are partners. Their partnership agreement provides for the following:

1. Accounts are to be balanced on 31st December each year:
2. Profits are to divided as follows: Bina: one-half Anita: one third and carrried to Reserve Account: one sixth.
3. That in the event of death of a partner, her executors will be entitled to the following:
   1. The capital to her credit at the date of death.
   2. Proportionate profit to date of death based on the average profits of the last three completed years.
   3. Share of goodwill based on three year’s purchases of the average profits for the three preceding completed years.

The profit for the three years were: year 2005 - ₹ 42,000; year 2006 - ₹ 39,000 and year 2007 - ₹ 45,000.

On 31.12.07, Anita’s capital stood at ₹ 60,000 and firm’s General Reserve Account stood at ₹ 30,000 Anita expired on 1.5.08.

From the above, prepare Anita’s Executors Account as would appear in the firm’s ledger transferring the amount to her Loan Account with proper working notes.

X and Y shared profits in the ratio of 2 : 1. Following is their Balance Sheet as at 31st March, 2024:

Y died on 30th June, 2024. Besides his capital and reserves, his legal representatives are entitled to:

1. His share of goodwill based on 2 years purchase of the last 3 years average profits less 10%. Last three years profits were ₹ 9,000; ₹ 20,000 and ₹ 16,000.
2. Fixed Assets are revalued at ₹ 76,000. There is no need of provision for doubtful debts, as the debtors are all good.
3. He is to be allowed interest at 12% p.a. upto the date of death.

Prepare Y’s A/c to be rendered to his legal representatives.

A, B and C are in partnership, sharing profits in the proportion of two-thirds, one-sixth and one-sixth respectively.

A died on the 30th June, 2024, three months after the annual accounts had been prepared and in accordance with the partnership agreement, his share of the profits to the date of death was estimated on the basis of the profit for the preceding year. In addition to this, the agreement provided for interest on capital at 5 percent per annum on the balance standing to the credit of the capital account at the date of the last Balance Sheet, and also for goodwill, which was to be brought into account at two year’s purchase of the average profits for the last three years.

A’s capital on 31st March, 2024 stood at ₹ 1,20,000, and his drawings from then to the date of death amounted to ₹ 9,000.

The net profits of the business for the three preceding years amounted to ₹ 33,500; ₹ 41,500 and ₹ 40,500, respectively.

You are required to prepare A’s Capital Account as at the date of death, for a settlement with his executors.

You are given the Balance Sheet of A, B and C who are partners sharing profits in the ratio of 2 : 2 : 1 as at March 31, 2025.

B died on June 15, 2025. According to the Deed, his legal representatives are entitled to:

1. Balance in Capital Account;
2. Share of goodwill valued on the basis of thrice the average of the past 4 year’s profits;
3. Share in profits up to the date of death on the basis of average profits for the past 4 years;
4. Interest on capital account @ 12% p.a.

Profits for the years ending on March 31 of 2022, 2023, 2024, 2025 respectively were ₹ 15,000, ₹ 17,000, ₹ 19,000 and ₹ 13,000.

B’s legal representatives were to be paid the amount due. A and C continued as partners by taking over B’s share equally. Work out the amount payable to B’s legal representatives.

Akhil, Nikhil and Sunil were partners sharing profits and losses equally. Following was their Balance Sheet as at 31st March, 2018:

Sunil died on 1st August, 2018. The Partnership Deed provided that the executor of a deceased partner was entitled to:

1. Balance of Partner’s Capital Account and his share of accumulated reserve.
2. Share of profits from the closure of the last accounting year till the date of death on the basis of the profit of the preceding completed year before death.
3. Share of goodwill calculated on the basis of three times the average profit of the last four years.
4. Interest on deceased partner’s capital @ 6% p.a.

₹ 50,000 to be paid to deceased’s executor immediately and the balance to remain in his Loan Account.

Profits and Losses for the preceding years were: 2014-15 − ₹ 80,000 Profit; 2015-16 − ₹ 1,00,000 Loss; 2016-17 − ₹ 1,20,000 Profit; 2017-18 − ₹ 1,80,000 Profit.

Pass necessary Journal entries and prepare Sunil’s Capital Account and Sunil's Executor Account. 

A, B and C are equal partners of a trading firm. The capital of the firm on 1st April, 2024 is ₹ 6,00,000 held equally by the partners.

Under the Partnership Deed:

1. A and B were entitled to be credited at the close of each year with partnership salaries of ₹ 1,000 p.m. and ₹ 1,500 p.m. respectively.
2. In the event of death of a partner, Goodwill is to be valued at one year’s purchase of average profit of the three years preceding the death.
3. Partners were to be charged 6% p.a. interest on their drawings and were to be allowed 6% p.a. interest on their capitals.

B died on 30th June, 2024. His drawings from 1st April to 30th June 2024 amounted to ₹ 10,000 p.m. drawn at the beginning of each month.

The profits of the three years ending 31st March each year were; 2022 - Profit ₹ 1,20,000; 2023 - Loss ₹ 40,000; 2024 -Profit ₹ 1,90,000.

Profit of the firm from 1st April to 30th June, 2024 amounted to ₹ 30,000 before providing for salaries and interest.

Prepare B’s Current and Capital Accounts as they would appear in the books of the firm.

Following given is the Balance Sheet of Raghuvir and Co. in which A, B and C were partners sharing profits and losses in the ratio of 2: 2: 1 as at 31-3-2025:

B died on 30th September, 2025. His account has to be settled under the following terms:

1. Goodwill is to be calculated at 3 year’s purchase on the basis of average of last 3 year’s profit or loss. The profits are: 
   

   The year ending on		₹
   31-3-2023	Profit	37,000
   31-3-2024	Profit	25,000
   31-3-2025	(Loss)	8,000

2. Profit for the period from 1-4-2025 to 30-9-2025 shall be ascertained proportionately on the basis of average profits and losses of the preceding 3 years.
3. During 2024-25, a machinery costing ₹ 25,000 was purchased and debited to repairs account on which 25% depreciation is to be calculated.
4. Other values agreed on assets are:
   • Stock ₹ 60,000
   • Building ₹ 3,20,000
   • Investments ₹ 1,25,000

You are required to prepare Capital Accounts and Balance Sheet of the firm as at 30-9-2025, transferring the amount due to B to his Executor’s Account.

It is assumed that all other items of assets and liabilities remained the same.

Arun and Amit were partners sharing profits and losses in the ratio of 5 : 3 and their balance sheet as at 31st March, 2023 stood as under:

Amit died on 1st December, 2023 and the following decisions were taken:

1. Goodwill to be calculated by taking thrice the amount of the average profit of the last four years. The profits of the previous years ending 31st March were: 2020 ₹ 15,000 (Profit); 2021 ₹ 20,000 (Profit); 2022 ₹ 10,000 (Loss); 2023 ₹ 35,000 (Profit).
2. A provision of ₹ 5,000 is to be made in respect of outstanding legal charges.
3. Further provision of ₹ 3,000 to be created on Debtors.
4. Assets are to be revalued as following:
   • Leasehold Land ₹ 1,05,000
   • Plant & Machinery ₹ 65,000
   • Motor Van ₹ 18,000
   • Stock in Hand ₹ 12,000
5. His share of profit for the period he was alive is to be based on the figure of profit on 31st March, 2023.
6. Executor is entitled to Amit’s Capital as appearing in the last balance sheet and interest thereon at 10% p.a. upto the date of death.

Prepare Revaluation Account, Partner’s Capital Accounts and a Balance Sheet as at 1st December, 2023.

M and N were partners in a firm. Their profit sharing ratio was 3 : 2. On 31st March, 2023, their Balance Sheet stood as under:

N died on 15th May, 2023. It was agreed that

1. Land and Building to be appreciated to 20%.
2. Value of Plant & Machinery, Furniture and Fixtures and Vehicles to be lowered by 10%.
3. Goodwill to be valued at 3 year’s purchase of last six year’s average profits which were:
   

   2017-18 ₹ 20,000;	2018-19 ₹ 18,000;	2019-20 ₹ 10,000;
   2020-21 ₹ 7,000;	2021-22 ₹ 15,000;	2022-23 ₹ 20,000

4. ₹ 3,000 of Debtors proved bad and hence have to be written off and provision for ₹ 2,000 to be created on the Debtors.
5. The profit for the year 2023-24 accrued on the same scale as in 2022-23.
6. A sum of ₹ 68,400 to be paid immediately to the executor’s of N and balance to be paid in 2 equal half-yearly instalments together with interest @ 7% per annum.

Pass the necessary journal entries to record the above transactions and prepare N’s Executor’s account for the year 2023-24.

The following is the Balance Sheet of Ram, Mohan and Sohan as at 31st March, 2023:

Ram, Mohan and Sohan shared profits and losses in the ratio of 2 : 2 : 1. Sohan died on 30th June, 2023. Under the partnership agreement the executor of Sohan was entitled to:

1. Amount standing to the credit of his Capital Account.
2. Interest on Capital which amounted to ₹ 150.
3. His share of goodwill ₹ 5,000.
4. His share of profit from the closing of the last financial year to the date of death which amounted to ₹ 750.

Sohan’s executor was paid ₹ 1,400 on 1st July, 2023 and the balance in four equal yearly instalments starting from 30th June, 2024 with interest @ 6% p.a.

Pass necessary Journal entries and draw up Sohan’s Account to be rendered to his executor and Sohan’s Executor’s Account till it is finally paid.

On 1st May, 2025, A, B, C and D were sharing profits and losses in the ratio of 1 : 2 : 3 : 4. C retires on this date and A, B and D agreed to share future profits and losses equally. On this date following balances appeared in their books:

Partners decide to record the effect of retirement by a single journal entry. You are required to give the journal entry.

X; Y and Z are partners sharing profits and losses in the ratio of 4 : 3 : 2. Y retires and X and Z decide to share future profits and losses in the ratio of 5 : 3. On the date of Y’s retirement, their Balance Sheet disclosed Dr. Balance of Profit & Loss A/c amounting to ₹ 2,70,000. Partners decide to record the effect of change in profit sharing ratio by a single journal entry. You are required to record the same.

A, B and C were partners sharing profits in the ratio of 1 : 3 : 2. Their fixed capitals were: A ₹ 3,00,000; B ₹ 400,000 and C ₹ 6,00,000. A retires and the new profit sharing ratio between B and C is agreed at 1 : 2. On this date, their Balance Sheet disclosed the following items:

Partners decided to record the effect of the above items without affecting their book values. Pass the necessary adjusting entry.

A, B, C and D are partners sharing profits in the ratio of 4 : 3 : 2 : 1. A retired on 1st May, 2025 and B, C and D decided to share future profits and losses equally. On this date their books show ‘Workmen Compensation Reserve’ of ₹ 1,20,000. Continuing partners do not want to alter the value of any item of Balance Sheet and want to record the effect of retirement by passing an adjustment entry. You are required to pass the adjustment entry under following alternative cases:

1. When there is no claim for workmen compensation.
2. When claim for workmen compensation is estimated at ₹ 30,000.
3. When claim for workmen compensation is estimated at ₹ 1,20,000.
4. When claim for workmen compensation is estimated at ₹ 1,80,000.

X, Y and Z are partners sharing profits and losses in the ratio of 1 : 3 : 2. X retires on 1st April, 2025 and the new profit sharing ratio between Y and Z is agreed at 1 : 2. Following balances appeared in their Balance Sheet as at that date:

Y and Z decide that book value of any item in the Balance Sheet is not to be altered but prefer to record the change in profit sharing ratio by an adjustment entry. Show the adjustment entry under the following alternative cases:

Case:

1. If there is no other information
2. If the market value of investments is ₹ 5,52,000
3. If the market value of investments is ₹ 4,50,000
4. If the market value of investments is ₹ 6,30,000

The Balance Sheet of P, Q and R who were sharing profits and losses in the ratio of `1/2:1/3:1/6` respectively stood as follows as at 31st March 2025:

Q retires and P and R decide to share future profits and losses in the ratio of 3 : 2. Claim on account of Workmen Compensation is estimated at ₹ 45,000. P and R agreed that effect of retirement is to be recorded by a single journal entry.

Also prepare the Capital Accounts of partners.

A, B and C are partners sharing profits and losses in the ratio of 2 : 3 : 1. Their Balance Sheet as at 31st March 2025 is given below:

C retires on 1st April, 2025 and A and B continued in partnership, sharing future profits and losses in the ratio of 3 : 2. Following was agreed upon:

1. Land & Building is to be appreciated by 10% and Stock was found overvalued by ₹ 20,000.
2. Provision for Doubtful Debts is to be made equal to 5% of the debtors.
3. Claim on account of Workmen Compensation is ₹ 24,000.
4. Goodwill of the firm be valued at ₹ 4,50,000.
5. A debtor whose due of ₹ 20,000 was written off as bad debts paid 50% in full settlement.
6. A and B decide that after the adjustment of Workmen Compensation Claim from Workmen Compensation Reserve and difference between market value and book value of investments from Investment Fluctuation Reserve, remaining balance of such reserves and all accumulated profits/losses are to appear in the Balance Sheet of the new firm.
7. Amount due to C is to be settled 50% on retirement and balance 50% within one year.

Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet after C’s retirement.

The Balance Sheet of A, B and C who were sharing profits in the ratio of 5 : 3 : 2 as at 31st March 2025 was as under:

A retired on 1st April, 2025 and Band C decided to share future profits and losses in the ratio of 2 : 3. The partners agreed to the following terms:

1. Goodwill of the firm is valued at ₹ 2,00,000.
2. Land and Building is undervalued by ₹ 1,20,000.
3. There were bad debts ₹ 25,000.
4. A provision for ₹ 20,000 is to be made for outstanding legal charges.
5. A claim of ₹ 40,000 on account of Workmen Compensation is to be provided.
6. Continuing partners decided to record the effect of reserves (after adjusting claim on account of Workmen Compensation Reserve) and accumulated profits/losses without affecting their book values.
7. The amount to be paid to A is to be brought in by Band C in such a way that their Capitals are proportionate to their profit sharing ratio and leave a balance of ₹ 50,000 in the Bank Account.

Prepare Revaluation Account, Partner’s Capital Accounts and the Balance sheet of the new firm.

Ravi, Mukesh, Naresh and Yogesh are partners in a firm sharing profits in the ratio of 2 : 2 : 1 : 1. On Mukesh’ s retirement the goodwill of the firm is valued at ₹ 90,000. Ravi, Naresh and Yogesh decided to share future profits equally. Pass the necessary journal entry for the treatment of goodwill.

A, B and C are partners sharing profits in the ratio of 4 : 3 : 3. On C’s retirement the value of the firm’s Goodwill was agreed at 3,00,000. A and B agreed to share profits and losses in future in the ratio of 7 : 3. Give adjustment entry in relation to goodwill.

L, M and O were partners in a firm sharing profits in 1 : 3 : 2 ratio. L retired and the new profit sharing ratio between M and O was 1 : 2. On L’s retirement the goodwill of the firm was valued at 1,20,000. Pass necessary journal entry for the treatment of goodwill on L’s retirement.

X, Y and Z are in partnership sharing profits in the proportion of 3 : 2 : 1. There is no goodwill A/c in the books of the firm.

As from 1st April, 2024, it was agreed that X should give only part of time, to the business and that in consequence he should receive in future only one half of his previous share, the remaining half being divided equally between Y and Z. The goodwill to be valued for this purpose, at ₹ 40,000.

Show the new share of partners and pass necessary journal entry.

Krish, Vrish and Peter are partners sharing profits in the ratio of 3 : 2 : 1. Vrish retired from the firm. On that date the Balance Sheet of the firm was as follows:

Additional Information:

1. Premises to be appreciated by 20%, Stock to be depreciated by 10% and Provision for doubtful debts was to be maintained @ 5% on Debtors. Further, provision for legal damages is to be increased by 1,200 and furniture to be brought up to ₹ 45,000.
2. Goodwill of the firm is valued at ₹ 42,000.
3. ₹ 26,000 from Vrish’s Capital Account be transferred to his loan account and balance to be paid through bank; if required, necessary loan may be obtained from bank.
4. New profit sharing ratio of Krish and Peter is decided to be 5 : 1.

Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet.

Kavya, Manya and Navita were partners sharing profits as 50%, 30% and 20% respectively. On 31-3-2016, their Balance Sheet was as under:

On the above date, Kavya retired and Manya and Navita agreed to continue the business on the following terms:

1. Firm’s goodwill was valued at ₹ 60,000 and it was decided to adjust Kavya’s share of goodwill in the capital accounts of continuing partners.
2. There was a claim for workmen’s compensation to the extent of ₹ 4,000.
3. Investments were revalued at ₹ 2,13,000.
4. Fixed Assets were to be depreciated by 10%.
5. Kavya was to be paid ₹ 20,000 through a bank draft and the balance was transferred to her loan account which will be paid in two equal annual instalments together with interest @ 10% p.a.

Prepare Revaluation A/c, Partner’s Capital accounts and Kavya’s Loan Account till it is finally paid.

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:

1. 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.
2. Fixed Assets were to be increased to ₹ 3,00,000.
3. Stock was to be valued at 120%.
4. 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.  

A, B and C were in partnership sharing profits in proportion to their capitals. Their Balance Sheet as at 31-3-2018 was as follows:

On the above date B retired owing to ill health and the following adjustments were agreed upon:

1. Buildings be appreciated by 10%.
2. Provision for bad and doubtful debts be increased to 5% on debtors.
3. Machinery be depreciated by 15%.
4. Goodwill of the firm be valued at ₹ 36,000 and be adjusted into the Capital Accounts of A and C who will share profits in future in the ratio of 3 : 1.
5. A provision be made for outstanding repairs bill of ₹ 3,000.
6. Included in the value of creditors is ₹ 1,800 for an outstanding legal claim, which is not likely to arise.
7. Out of the insurance premium paid ₹ 2,000 is for the next year. The amount was debited to P & L A/c.
8. The partners decide to fix the capital of the new firm as ₹ 1,20,000 in the profit sharing ratio.
9. B to be paid ₹ 9,000 in cash and the balance to be transferred to his Loan Account.

Prepare the Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the new firm after B’s retirement.

Mohan, Vinay and Nitya were partners in a firm sharing profits and losses in the proportion of `1/2,1/3` and `1/6` respectively. On 31st March, 2018, their Balance Sheet was as follows:

Mohan retired on the above date and it was agreed that:

1. Plant and Machinery will be depreciated by 5%.
2. An old computer previously written off was sold for ₹ 4,000.
3. Bad debts amounting to ₹ 3,000 will be written off and a provision of 5% on debtors for bad and doubtful debts will be maintained.
4. Goodwill of the firm was valued at ₹ 1,80,000 and Mohan’s share of the same was credited in his account by debiting Vinay’s and Nitya’s accounts.
5. The capital of the new firm was to be fixed at ₹ 90,000 and necessary adjustments were to be made by bringing in or paying off cash as the case may be.
6. Vinay and Nitya will share future profits in the ratio of 3 : 2.

Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the reconstituted firm.

A, B and C are partners sharing profits in the ratio of their Capitals. Their Balance Sheet as at March 31, 2024 is as under:

A retired on this date.

Additional Information:

1. Furniture and fittings were undervalued by ₹ 4,000.
2. An amount of ₹ 12,000 due from Mr. Arun, a debtor, was doubtful and a provision for the same is required.
3. Stock be valued at 90%.
4. Goodwill of the firm be valued at ₹ 60,000.
5. ₹ 1,00,000 be transferred to A’s loan account and balance be paid through bank. Bank overdraft be arranged, if required.
6. B and C will share future profits in 5 : 3.

Prepare necessary ledger accounts and balance sheet of the firm after A’s retirement.

Following is the Balance Sheet of G, K & W as at 31st March, 2024 who share profits in the ratio of 3 : 2 : 1.

On 1st April, 2024, G retired and the following arrangements were agreed upon:

1. Goodwill of the firm is to be valued at ₹ 15,000.
2. The assets and liabilities are to be valued as under: Stock ₹ 10,000; Sundry Debtors ₹ 11,500; Land and Buildings ₹ 18,000; Plant and Machinery ₹ 16,500; and Sundry Creditors ₹ 9,200.
3. Liability for Workmen’s Compensation amounting to ₹ 500 is to be brought into the books.
4. K and W were to introduce ₹ 12,000 and ₹ 6,000 respectively into the business and ₹ 13,150 were paid to G. The balance due to him was to be paid in three equal instalments annually together with interest @ 12% per annum.

Give necessary ledger accounts, the Balance Sheet of the firm after G’s retirement and G’s Loan Account till it is finally paid off.

The Balance Sheet of Messrs A, B and C showed as follows:

B agrees to take over the business, A and C retiring on the following terms:

1. That the goodwill of the firm be valued at ₹ 15,000
2. That plant and stock be reduced by 10%.
3. That freehold property be appreciated by ₹ 1,000.
4. That Provision for doubtful debts be brought up to ₹ 250.
5. B has to bring in sufficient cash to pay off A and C. The partners used to share profits in the proportion of 2/5, 2/5 and 1/5.

Show the necessary Journal entries, Partner’s Capital Accounts and Balance Sheet of B after the retirement of A and C.

Akul, Bakul, and Chandan were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 31^st March 2018 their Balance Sheet was as follows:

Bakul retired on the above date and it was agreed that:

1. Plant and Machinery were undervalued by 10%.
2. Provision for doubtful debts was to be increased to 15% on debtors.
3. Furniture was to be decreased to ₹ 87,000.
4. Goodwill of the firm was valued at ₹ 3,00,000 and Bakul’s share was to be adjusted through the capital accounts of Akul and Chandan.
5. Capital of the new firm was to be in the new profit sharing ratio of the continuing partners.

Prepare Revaluation account, Partner’s Capital accounts, and the Balance Sheet of the reconstituted firm.

G, E and F were partners in a firm sharing profits in the ratio of 7 : 2 : 1. The Balance Sheet of the firm as at 31st March, 2018, was as follows:

E retired on the above data. On E’s retirement the following was agreed upon:

1. Land and Building were revalued at ₹ 1,88,000, Machinery at ₹ 76,000 and Stock at ₹ 10,000 and goodwill of the firm was valued at ₹ 90,000.
2. A provision of 2.5% was to be created on sundry debtors for doubtful debts.
3. The net amount payable to E was transferred to his loan account to be paid later on.
4. Total capital of the new firm was fixed at ₹ 2,40,000 which will be adjusted according to their new profit sharing ratio by opening current accounts.

Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of reconstituted firm.

A, B and C were partners sharing profits and losses in the ratio of 3 : 2 : 1. Their Balance Sheet as at 31-03-2024 stood as follows:

B retired on 1-4-2024 subject to the following conditions:

1. A typewriter purchased on 1-10-2023 for 2,000 debited to office expenses account is to be brought into account charging depreciation @ 10% p.a.
2. Building revalued at ₹ 75,000. Furniture is to be written-down by ₹ 2,000 and stock is reduced to ₹ 17,500.
3. Provision for bad debts is to be calculated @ 5% on debtors.
4. Goodwill of the firm is to be valued at ₹ 18,000.
5. Amount due to Bis to be transferred to his Loan Account.
6. A and C will share profits and losses in the ratio of 2 : 1 and their capitals are to be adjusted in the profit sharing ratio.

You are required to prepare: Revaluation Account, Partner’s Capital Accounts and Balance Sheet immediately after B’s retirement.

A, B and C were in partnership sharing profits and losses in the ratio of 3 : 2 : 1. Their Balance Sheet as at 31st March, 2024 was as follows:

C retired on this date. It was agreed that:

1. Plant and Machinery is to be revalued at ₹ 40,000; the existing provision for bad debts is to be increased by 50% and liability for workmen’s compensation was decided at ₹ 2,000.
2. Creditors are to be paid ₹ 3,000 more.
3. C’s share of goodwill was valued at ₹ 8,000.
4. The total amount payable to C was brought in by A and B in such a way as to make their capital accounts in proportion to their share of profits which is to be equal.

You are required to prepare (i) revaluation account, (ii) partner’s capital accounts, and (iii) revised balance sheet after all adjustments are carried out.

Radha, Manas and Arnav were partners in a firm sharing profits and losses in the ratio of 3 : 1 : 1. Their Balance Sheet as at 31st March, 2019 was as follows:

Manas retired on 1st April, 2019. It was agreed that:

1. Stock was to be appreciated by 20%.
2. Provision for doubtful debts was to be increased to ₹ 15,000.
3. Value of furniture was to be reduced by ₹ 3,000.
4. Market value of investments was ₹ 1,90,000.
5. Goodwill of the firm was valued at ₹ 2,00,000 and Manas’s share was adjusted in the accounts of Radha and Arnav.
6. Manas was paid ₹ 68,000 in cash and the balance was transferred to his loan account.
7. Capitals of Radha and Arnav were to be in proportion to their new profit sharing ratio. Surplus/deficit, if any, in their capital accounts was to be adjusted through current accounts.

Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the reconstituted firm.

A, B and C are partners sharing profits and losses in the ratio of 5 : 3 : 2. Their Balance Sheet as at 31st March, 2024 was as follows:

C retired on 1st April, 2024 as per the following conditions:

1. Goodwill of the firm is to be valued at three years purchase of the average profits of the last five years which were ₹ 20,000; ₹ 12,000; ₹ 30,000; ₹ 6,000 (loss) and ₹ 34,000 respectively.
2. Machinery is to be reduced to ₹ 40,000 and patents are valueless.
3. There is no need of any provision for doubtful debts.
4. An unclaimed liability of ₹ 2,000 is to be written off.
5. Out of the total insurance premium paid, ₹ 1,000 be treated as pre-paid.
6. Investments are revalued at ₹ 16,000 and these are taken by C at this value.

Entire sum payable to C is to be brought in by A and B in such a way so as to make their capitals proportionate to their new profit sharing ratio which is 2 : 1.

Prepare Revaluation Account, Capital Accounts and the opening Balance Sheet of A and B.

A, B and C were equal partners. Their Balance Sheet as at 31-3-2024 was as under:

B retired on 1st April, 2024. A and C decided to continue the business as equal partners on the following terms:

1. Goodwill of the firm was valued at ₹ 57,600.
2. Reserve for bad and doubtful debts to be maintained at 10% on debtors.
3. Land and building to be increased to ₹ 1,32,000.
4. Furniture to be reduced by ₹ 8,000.
5. Rent outstanding (not provided for as yet) was ₹ 1,500.

Remaining partners decided to bring sufficient cash in the business to pay off B and to maintain a bank balance of ₹ 24,800. They also decided to readjust their capitals as per their new profit sharing ratio.

Prepare necessary Ledger Accounts and Balance Sheet.

X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. Their Balance Sheet as at 31st March, 2024 was as follows:

X retired on that date and it was decided to make the following adjustments:

1. Stock to be depreciated by 40% and sale of old papers and materials realised ₹ 1,000.
2. Provision for doubtful debts to be increased to 17% of Sundry Debtors.
3. Machinery be depreciated by 40% and buildings be appreciated by 20%.
4. Partners paid ₹ 10,000 to the family of an employee who died of an heart-attack.
5. Goodwill is valued at ₹ 30,000.
6. Y and Z decided to share future profits in the ratio of 3 : 2 and not to show goodwill in the books.
7. Y and Z would introduce sufficient capital to pay off X and have thereafter a sum of ₹ 25,000 as Working Capital in a manner that their Capitals would be in proportion of their new profit sharing ratio.

Pass journal entries and prepare the Balance Sheet of the new firm.

Harish, Paresh and Mahesh were three partners as sharing profits and losses in the ratio of 5 : 4 : 1. Paresh retired on 31st March, 2017. His capital on 1st April, 2016, was ₹ 80,000. During the year 2016-17, he made drawings of Rs. 5,000. He was to be charged interest on drawings of ₹ 100.

The partnership deed provides that on the retirement of a partner, he will be entitled to:

1. His share of capital.
2. Interest on capital @ 10% per annum.
3. His share of profit for the year of his retirement.
4. His share of goodwill in the firm.
5. His share in the profit/loss on revaluation of assets and liabilities.

Additional information: 

1. Paresh’s share in the profits of the firm for the year 2016-17 was ₹ 20,000.
2. Goodwill of the firm was valued at ₹ 24,000.
3. The firm suffered a loss of ₹ 12,000 on the revaluation of assets and liabilities.
4. It was decided to transfer the amount due to Paresh to his loan account bearing interest @ 6% per annum. The loan was to be repaid in two equal annual instalments, the first instalment to be paid on 31st March, 2018.

You are required to prepare: 

1. Paresh’s Capital Account.
2. Paresh’s Loan Account till it is finally closed.

Mohit, Ali and John were partners in a firm, sharing profits and losses in the ratio of 3 : 1 : 1. Their Balance Sheet as at 31st March, 2018, was as follows:

Mohit retired on 1st April, 2018, subject to the following adjustments:

1. Goodwill of the firm to be valued at ₹ 20,000.
2. Mohit to take over the investments at the market value.
3. 25% of the General Reserve to be transferred to Provision for Doubtful Debts and the balance to be distributed amongst all the partners.
4. Creditors to be paid ₹ 3,000 less.
5. Investment Fluctuation Fund not to be distributed. For this, it was decided that the remaining partners would compensate the retiring partner through their capital accounts.
6. Mohit to be paid ₹ 20,000 immediately on retirement and the balance to be transferred to his loan account.

You are required to:

1. Pass journal entries on the date of Mohit’s retirement.
2. Prepare the Balance Sheet of the reconstituted firm.

L, M and N were partners in a firm sharing profit & losses in the ratio of 2:2:3. On 31^st March 2023, their Balance Sheet was as follows:

On 31^st March 2023, M retired from the firm and remaining partners decided to carry on business. It was decided to revalue assets and liabilities as under:

1. Land and Building be appreciated by ₹ 2,40,000 and Machinery be depreciated 10%.
2. 50% of investments were taken by the retiring partner at book value.
3. Provision for doubtful debts was to be made at 5% on debtors.
4. Stock will be valued at market price which is ₹ 1,00,000 less than the book value.
5. Goodwill of the firm be valued at ₹ 5,60,000. L and N decided to share future profits and losses in the ratio of 2 : 3.
6. The total capital of the new firm will be ₹ 32,00,000 which will be in proportion of profit-sharing ratio of L and N.
7. Gain on revaluation account amounted to ₹ 1,05,000.

Prepare Partner’s Capital accounts and Balance sheet of firm after M’s retirement.

P, R and S are in partnership sharing profits 4/8, 3/8 and 1/8 respectively. It is provided under the partnership deed that on the death of any partner his share of goodwill is to be valued at one-half of the net profits credited to his account during the last 4 completed years (books of accounts are closed on 31st March).

R died on 1st April, 2022. The firm’s profits for the last 4 years ending 31st March each year were as follows: 2019 Profits ₹ 1,20,000; 2020 Profits ₹ 60,000; 2021 Losses ₹ 20,000 and 2022 Profits ₹ 80,000.

1. Determine the amount that should be credited to R in respect of his share of goodwill.
2. Pass a journal entry without raising goodwill account for its adjustment assuming that profit sharing ratio between P and S in future will be 3 : 2. Show your working clearly.

In the partnership agreement between X, Y and Z who were sharing profits in the ratio of 5 : 3 : 2, the goodwill was to be valued on the death of any partner on the basis of such partner’s share of 2 year’s profits calculated on the average of 5 year’s profits immediately preceding the year of death less 10%. The firm’s profits were 2019 ₹ 10,000; 2020 ₹ 30,000; 2021 ₹ 43,000 and in 2022 and 2023 losses of ₹ 6,000 and ₹ 4,000 respectively. The deceased partner’s share of profits for the period of his life-time in the year of death was to be based on the average of the profits of the previous 3 years plus 10%.

X died on 31st August, 2023. His Capital A/c showed a credit of ₹ 50,000 on 1st April, 2023 and he had drawn ₹ 4,000 since that date.

Calculate the amount due to his legal representatives.

A, B and C were partners. Their partnership deed provided that they were to share profits thus; A 26 percent; B 34 percent; C 40 percent; and that if a partner died, his capital should remain in the business for a stated period at a fixed rate of interest, but that the deceased partner’s share should be credited with an amount for Goodwill, based upon one and a half year’s average profits, for the five years prior to his death, but be subject to deduction of 5 percent from the book debts. C died, and the profits of the firm for five years were agreed at ₹ 20,000; ₹ 30,000; ₹ 15,000 (loss); ₹ 5,000 (loss); and ₹ 45,000 respectively. Book Debts stood at ₹ 90,000.

Prepare a statement showing the amount of Goodwill to be credited to C’s Account and give the Journal entry in the firm's book necessary to carry out the transactions.

M, N and O were partners in a firm sharing profits and losses equally. Their Balance Sheet as at 31st March, 2025 was as follows:

N died on 12th June, 2025. According to the Partnership Deed, executors of the deceased partner are entitled to:

1. Balance of partner’s capital account.
2. Interest on Capital @ 5% p.a.
3. Share of goodwill calculated on the basis of twice the average of past three year’s profits and
4. Share of profits from the closure of the last accounting year till the date of death on the basis of twice the average of three completed year’s profits before death.

Profits for the years ended on 31st March, 2023, 2024 and 2025 were ₹ 80,000, ₹ 90,000 and ₹ 1,00,000 respectively. Show the working for deceased partner’s share of goodwill and profits till the date of his death. Pass the necessary journal entries and prepare N’s Capital Account to be rendered to his executors.

Hiren, Suren and Chaman were partners sharing profits and losses in the ratio of 2 : 1 : 1. They closed their books on 31st March each year. Hiren died on 31st August, 2013, when their Balance Sheet was as follows:

According to the partnership deed:

1. Interest on capital was allowed to all partners @ 6% p.a.
2. Hiren and Chaman were entitled to salaries at ₹ 100 and ₹ 50 per month respectively.
3. In the event of death of a partner goodwill was to be valued at 3 year’s purchase of the average net profits of 2 completed years preceding death. The net profits for the years 2011-12 and 2012-13 were ₹ 4,000 and ₹ 6,000 respectively.

Hiren’s share was paid to his executors.

You are required to prepare:

1. Hiren’s Capital Account.
2. Hiren’s Executor’s Account.

X, Y and Z were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. On 31.3.2023 their Balance Sheet was as follows:

Z died on 31.7.2023. It was agreed that:

(a) Goodwill be valued at 2½ year’s purchased of the average profits of the last four year which were as follows:  

(b) Machinery be valued at ₹ 70,000; Patents at ₹ 20,000 and Building at ₹ 62,500.

(c) For the purpose of calculating Z’s share of profits in the year of his death the profits in 2023-24 should be taken to have been accrued on the same scale as in 2022-23.

(d) A sum of ₹ 17,500 was paid immediately to the executors of Z and the balance was paid in four half yearly instalments together with interest at 12% p.a. starting from 31.1.2024.

Give necessary journal entries to record the above transactions and Z’s executor's account till the payment of instalments due on 31.1.2024.

Karan, Ali and Deb are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. On 31st March, 2016, their Balance Sheet was as under:

Karan died on 1st July, 2016. An agreement was reached among Ali, Deb and Karan's legal representatives that:

1. Building be revalued at ₹ 93,500.
2. Furniture be appreciated by ₹ 10,000.
3. To write off the Provision for Doubtful Debts since all debtors are good.
4. Investments be valued at ₹ 38,000.
5. Goodwill of the firm be valued at ₹ 1,20,000.
6. Karan's share of profit to the date of his death, to be calculated on the basis of previous year’s profit which was ₹ 25,000.
7. Interest on capital to be allowed on Karan's capital @ 6% per annum.
8. Amount payable to Karan’s legal representative to be transferred to his legal representative’s loan account.

You are required to:

1. Pass journal entries on the date of Karan’s death.
2. Prepare the Interim Balance Sheet of the reconstituted firm.

Ravi, Sam and Tukai were in partnership sharing profits and losses in the ratio of 6 : 5 : 4. The annual rent due to Sam for using his personal property for the use of the business is ₹ 9,000 and this is treated as a business expense.

Accounts of the business are closed annually on 31st March.

The partnership deed provides that the representatives of a deceased partner are entitled to:

1. The deceased partner’s capital as appearing in the last Balance Sheet.
2. Interest on capital @ 6% per annum to the date of his death.
3. Interest on drawings @ 5% per annum.
4. His share of profits calculated till the date of his death on the average of the last three year’s profits.
5. Share of goodwill calculated at two year’s purchase of the average profits for the last three years prior to charging the rent but after charging interest on capital.

The profits of the firm for the years 2014-15, 2015-16 and 2016-17 after charging rent and interest on capital amounted to ₹ 62,000, ₹ 63,000 and ₹ 73,000 respectively.

Sam died on 30th June, 2017.

His drawings from 1st April 2017 to the date of his death amounted to ₹ 3,000.

His capital shown in the Balance Sheet of 31st March 2017, was ₹ 90,000.

You are required to prepare Sam’s Capital Account to show the amount due to his estate from the firm.

Retiring partner is compensated for parting with the firm's future profits in favour of the remaining partners. The remaining partners contribute to such compensation amount in ______.

‘Gaining Ratio’ means ______.

What treatment is made of accumulated profits on the retirement of a partner?

At the time of retirement of a partner, profit on revaluation will be credited to the capital accounts of ______.

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

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

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

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

How Goodwill is recorded on the retirement of a partner?

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:

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?

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 ______.

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 ______.

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 ______.

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 ______.

Aaroh, Bhuvan and Charu were partners in a firm sharing profits and losses in the ratio of 1 : 2 : 6. Charu died. Aaroh and Bhuvan acquired Charu's share in the ratio of 2 : 1. The new profit sharing ratio between Aaroh and Bhuvan after Charu’s death will be ______.

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 ______.

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 ______.

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

Mita, Veena and Atul were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Atul retired and his share was taken over by Mita and Veena in the ratio of 1 : 4. The new profit sharing ratio between Mita and Veena after Atul’s retirement will be ______.

Srishti, Nitya and Anand were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Srishti retired from the firm selling her share of profits to Nitya and Anand in the ratio of 2 : 1. The new profit sharing ratio between Nitya and Anand will be ______.

Amla, Bimla and Kavita were partners sharing profits and losses in the ratio of 4 : 3 : 1. Bimla retires and gives her share of profit to Amla for ₹ 3,600 and to Kavita for ₹ 3,000. The gaining ratio of Amla and Kavita will be ______.

Rey and Ley Associates is having three partners named as Rakesh, Leena and Sanjana. Their Capitals were ₹ 4,00,000; ₹ 40,000 and ₹ 1,60,000 respectively. Sanjana retired on March 31, 2023 and sold her share of profits by taking ₹ 30 000 from Rakesh and ₹ 20,000 from Leena. Determine the new ratio.

On 1st April, 2024 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 ______.

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 ______.

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 ______.

Aditya, Vishesh and Nimesh were partners in a firm sharing profits and losses equally. Aditya died on 1^st July, 2023. Remaining partners decided to continue the business of the firm and decided to share future profits in the ratio of 4 : 3. The gaining ratio of Vishesh and Nimesh will be ______.

Anju, Divya and Bobby were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Bobby retired. The new profit sharing ratio between Anju and Divya after Bobby’s retirement was 5 : 3. The gaining ratio of remaining partners will be ______.

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

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 ______.

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 B?

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.

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.

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.

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:

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

A, B and C are partners in a firm sharing profit/loss in the ratio of 2 : 2 : 1. On March 31, 2024, C died. Accounts are closed on Dec., 31 every year. The sales for the year 2023 was ₹ 6,00,000 and the profits were ₹ 60,000. The sales for the period from Jan. 1, 2024 to March 31, 2024 were ₹ 2,00,000. The share of deceased partner in the current year’s profits on the basis of sales is:

A, B and C were partners sharing profits and losses in the ratio of 2 : 2 : 1. Books are closed on 31st March every year. C dies on 5th November, 2023. Under the partnership deed, the executors of the deceased partner are entitled to his share of profit to the date of death, calculated on the basis of last year’s profit. Profit for the year ended 31st March, 2023 was ₹ 2,40,000. C’s share of profit will be: 

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, 2021. 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 2018 ₹ 50,000; 2019 1,80,000 (Loss); 2020 ₹ 30,000 and 2021 ₹ 60,000. P’s share of profit/loss will be:

A, B and C are partners in a firm sharing profit/loss in the ratio of 3 : 2 : 1. On March 31, 2019, C died. Accounts are closed on Dec., 31 every year. The sales for the year 2018 was 10,00,000 and the profits were 2,00,000. The sales for the period from Jan. 1, 2019 to March 31, 2019 were ₹ 3,00,000. The share of deceased partner in the current year’s profits on the basis of sales is:

A, B and C were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. C retired and his capital balance after adjustments regarding reserves, accumulated profits/losses and his share of gain on revaluation was ₹ 2,50,000. C was paid ₹ 3,22,000 including his share of goodwill. The amount credited to C’s Capital Account, on his retirement, for goodwill will be:

In the case of retirement, if full or part of the amount payable to the retiring partner still remains to be paid, and there is no agreement among the partners then the retiring partner will get:

1. Interest @ 6% p.a. on the Balance amount.
2. Share of profit earned proportionate to his amount outstanding to the total capital of the firm.
3. Interest @ 9% p.a. on the balance amount.

Which out of the following is correct?

Rajat, Mishi and Tanvi were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. Tanvi died on 31st October, 2019. According to the partnership agreement, her share of profits from the closure of last accounting year till the date of her death was to be calculated on the basis of aggregate profits of two completed years before death. Profits of the firm for the years ending 31st March, 2018 and 31st March, 2019 were ₹ 57,000 and ₹ 63,000 respectively. The firm closes its books on 31st March every year. Tanvi’s share of profits till the date of her death will be:

______ is opened to credit the share of profit of the deceased partner, till the time of his death to his Capital Account.

X, Y and Z were partners in a firm sharing profits in the ratio of `1/2,1/3` and `1/6` respectively. Z decided to retire from the firm. On the date of his retirement, ‘Workmen Compensation Reserve’ of 1,20,000 was appearing in the Balance Sheet of the firm. The claim on account of Workmen Compensation was determined at ₹ 67,500. Excess of reserve amount over the claim will be:

A, B and C are partners sharing profits in 3 : 2 : 1 B retires, and the balance of his Capital A/c after adjusting reserves and his share of goodwill was ₹ 2,40 000. The remaining partners gave B an unrecorded vehicle valued at ₹ 60,000 and the balance payable to B was discharged by giving a Bank draft. What will be the amount of the Bank Draft?

A, B, C are partners sharing profits in 7 : 3 : 2 C retires and his share was purchased by A and B by giving him (C) ₹ 10,000 each from their Capital A/cs. What will be the new profit-sharing ratio of A and B?

A, B and C are partners sharing profits in 5 : 3 : 2. C retires and his share was purchased by A and B by giving him (C) ₹ 10,000 each from their Capital A/cs. What will be the value of the goodwill of the firm?

A, B, C are partners. B retired and on the date of retirement Workmen’s compensation fund was appearing in the books at ₹ 50,000. The claim on account of workmen’s compensation was ₹ 65,000. The excess claim will be:

Amay, Bina and Chander are partners in a firm with capital balances of ₹ 50,000, ₹ 70,000 and ₹ 80,000 respectively on 31st March, 2022. Amay decides to retire from the firm on 31st March 2022. With the help of the information provided, calculate the amount to be paid to Amay on his retirement. There existed a general reserve of ₹ 7,500 in the balance sheet on that date. The goodwill of the firm was valued at ₹ 30,000. Gain on revaluation was ₹ 24,000.

Punit, Sujit and Jiten are partners sharing profits and losses in the ratio of 4 : 3 : 1. Sujit retires from the firm, selling his share of profit to Punit and Jiten for ₹ 1,50,000; ₹ 80,000 being paid by Punit and ₹ 70,000 by Jiten. What is the new profit-sharing ratio between the remaining partners?

A firm has an unrecorded liability for workmen compensation of ₹ 10,000: The firm was not prudent enough to create a workmen compensation reserve. How will this liability be treated in the books of the firm at the time of retirement of a partner?

G, S and T were partners sharing profits in the ratio 3:2:1. G retired and his dues towards the firm including Capital balance, Accumulated profits and losses share, Revaluation Gain amounted to ₹ 5,80,000. G was being paid ₹ 7,00,000 in full settlement. For giving that additional amount of ₹ 1,20,000, S was debited for ₹ 40,000. Determine goodwill of the firm.

Khushi, Namita and Manvi were partners in a firm sharing profits and losses in the ratio of 5:2:3. On 30^th June, 2022, Khushi died. The partnership deed provided that on the death of a partner, her share of profit till the date of death was to be calculated on the basis of average profit of last three years less ₹ 10,000. Profits for the last three years were:

Khushi's share of profit till the date of her death was:

Nikhil, Akhil and Amber are partners in a firm. At the time of Akhil’s retirement, Amber takes over furniture of ₹ 12,000 at ₹ 10,000.

Choose the correct journal entry from the following options to record this adjustment.

At the time of retirement, if nothing is mentioned about the payment made due to him, in which account, the amount will be transferred:

Eena, Meena and Deeka are partners sharing profits and losses in the ratio 5:4:1. Meena retired on 31st March 2023 and her dues came out to be ₹ 7,20,000. Amount of ₹ 1,20,000 was paid immediately and balance was to be paid in three equal annual instalments together with interest @ 10% per annum. Determine the amount payable to Meena on 31st March 2025.

A, B and C were partners, sharing profits and losses equally. B died on 31 August 2023, and the total amount transferred to B’s executors was ₹ 13,20,000. B’s executors were being paid ₹ 1,20,000 immediately, and the balance was to be paid in four equal semi-annual installments together with interest @ 10% p.a. Total amount of interest to be credited to B’s executors account for the year ended March 31, 2024, will be?

Assertion (A): Retirement of a partner results into dissolution of partnership and new partnership among the remaining partners comes into existence.

Reason (R): Retirement of a partner results into reconstitution of partnership.

In the context of the above two statements, which of the following is correct?

Assertion (A): In the event of retirement of a partner, the combined share of profit of the remaining partners will increase.

Reason (R): Combined share of profit of the remaining partners increases because they will also acquire the profit share of the retiring partner.

In the context of the above two statements, which of the following is correct?

Assertion (A): If A, B, C and D are partners, D’s son will automatically become the new partner in case of D’s death. 

Reason (R): D’s son will become the new partner only if majority of the remaining partners agree to admit him into partnership.

In the context of the above two statements, which of the following is correct?

Assertion (A): In case of retirement of a partner, goodwill is credited to all partners Capital accounts in old ratio.

Reason (R): In case of retirement of a partner, his share of goodwill is credited to retiring partner’s capital account and debited to continuing partners in their sacrificing ratio.

In the context of the above two statements, which of the following is correct?

Assertion (A): At the time of retirement, the retiring partner is entitled to get his share of general reserve and credit balance in Profit & Loss Account.

Reason (R): Retiring partner is not entitled to share of general reserve and credit balance in Profit & Loss Account since he gets his share of goodwill.

In the context of the above two statements, which of the following is correct?

Assertion (A): In the event of death of a partner, in case there is no change in the profit sharing ratio of continuing partners, the deceased partner’s share of profit till the date of his death is debited to Profit & Loss Suspense Account.

Reason (R): Profit and Loss Suspense Account is closed by transferring its balance to Profit & Loss Account.

In the context of the above two statements, which of the following is correct?

Assertion (A): At the time of retirement of a partner, loss on revaluation is debited to the Capital accounts of remaining partners in their old ratio.

Reason (R): At the time of retirement of a partner, gain on revaluation is credited to the Capital accounts of all partners in their old ratio.

In the context of the above two statements, which of the following is correct?

Assertion (A): In case of retirement, the retiring partner is entitled to get interest @ 6% p.a. till the amount due to him is paid off.

Reason (R): At his option, the retiring partner, instead of the interest, may take that share of profits which has been earned by the firm by the use of the amount due to him.

In the context of the above two statements, which of the following is correct?

Assertion (A): Amount due to retiring partner is always transferred to his Loan Account bearing interest @ 6% p.a.

Reason (R): Amount due to retiring partner may be paid immediately or later in instalments with agreed rate of interest.

In the context of the above two statements, which of the following is correct?

Assertion (A): On retirement of a partner, if the retiring partner is paid in excess of the total amount due to him, such an excess is treated as his share of goodwill.

Reason (R): Retiring partner’s share of goodwill is recorded by debiting goodwill account and crediting retiring partner’s capital account.

In the context of the above two statements, which of the following is correct?

Assertion (A): A, B and C were partners sharing profits in 4 : 3 : 2. A retires and new profit sharing ratio between B and C is agreed at 2 : 1. On that date, advertisement suspense account of ₹ 1,80,000 existed in the balance sheet. It will be written off among all partners in old ratio.

Reason (R): Advertisement Suspense Account is a fictitious asset and at the time of retirement of a partner all fictitious assets are written off to the Capital Accounts of old partners in old profit sharing ratio.

In the context of the above two statements, which of the following is correct?

Assertion (A): When Workmen Compensation Reserve appearing in the Balance Sheet is more than the claim against it, the excess of such reserve is credited to old partners in their old profit-sharing ratio.

Reason (R): Workmen Compensation Reserve is a reserve created out of past profits and hence distributed among old partners in their old ratio.

In the context of the above two statements, which of the following is correct?