# Balbharati solutions for Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board chapter 4 - Reconstitution of Partnership (Retirement of Partner) [Latest edition]

## Chapter 4: Reconstitution of Partnership (Retirement of Partner)

Exercise 4Exercise 4 (Practical Problems)
Exercise 4 [Pages 182 - 183]

### Balbharati solutions for Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board Chapter 4 Reconstitution of Partnership (Retirement of Partner) Exercise 4 [Pages 182 - 183]

#### Select the most appropriate alternative from those given below and rewrite the sentence.

Exercise 4 | Q (A) 1. | Page 182

The Profit or Loss from revaluation on the retirement of a partner is shared by ______.

• The remaining partners

• All the partners

• Only retiring partner

• Bank

Exercise 4 | Q (A) 2. | Page 182

Decrease in the value of assets should be __________ to Profit and Loss Adjustment Account.

• Debited

• Credited

• Equal

Exercise 4 | Q (A) 3. | Page 182

The balance of the capital account of retired partner is transferred to his _________ account if it is not paid.

• Loan

• Personal

• Current

• Son's

Exercise 4 | Q (A) 4. | Page 182

Gain ratio _______ Ratio less Old Ratio.

• New

• Equal

• Capital

• Sacrifice

Exercise 4 | Q (A) 5. | Page 182

New Ratio = Old Ratio + _____ Ratio

• Gain

• Capital

• Sacrifice

• Current

Exercise 4 | Q (A) 6. | Page 182

Apte, Bhate and Chitale are sharing 1/2, 3/10, "and" 1/5 if Apte retire their new ratio will be ______.

• 5: 2

• 3: 2

• 5: 3

• 2: 5

Exercise 4 | Q (B) 1. | Page 182

Write the Word/Term/Phrase which can substitute of the following statement:

Credit balance of Profit and Loss Adjustment Account.

Exercise 4 | Q (B) 2. | Page 182

Write the Word/Term/Phrase which can substitute of the following statement:

The ratio in which the continuing partners are benefited due to the retirement of partner.

Exercise 4 | Q (B) 3. | Page 182

Write the Word/Term/Phrase which can substitute the following statement:

Debit balance of revaluation Account.

Exercise 4 | Q (B) 4. | Page 182

Write the Word/Term/Phrase which can substitute of the following statement:

The ratio which is obtained by deducting the Old Ratio from New Ratio.

Exercise 4 | Q (B) 5. | Page 182

Write the Word/Term/Phrase which can substitute of the following statement:

Money value of business reputation earned by the firm over a number of years.

Exercise 4 | Q (B) 6. | Page 182

Write the Word/Term/Phrase which can substitute of the following statement:

Partner’s Account where Loss or Profit on revaluation is transferred.

Exercise 4 | Q (C) 1. | Page 183

State whether the following statement is true or false with reason.

Gain ratio means New ratio minus Old ratio.

• True

• False

Exercise 4 | Q (C) 2. | Page 183

State whether the following statement is true or false with reasons.

Retiring partner’s share in profit up to the date of his retirement will be debited to Profit and Loss Suspense Account.

• True

• False

Exercise 4 | Q (C) 3. | Page 183

State whether the following statement is true or false with reason.

On retirement of a partner, a sacrifice ratio is considered.

• True

• False

Exercise 4 | Q (C) 4. | Page 183

State whether the following statement is true or false with reason.

Retiring partner is called an outgoing partner.

• True

• False

Exercise 4 | Q (C) 5. | Page 183

State whether the following statement is true or false with reason.

On retirement of a partner, remaining partner will share the goodwill in their profit sharing ratio.

• True

• False

Exercise 4 | Q (C) 6. | Page 183

State whether the following statement is true or false with reason.

Retiring partner is not entitled to share in general reserve and accumulated profit.

• True

• False

#### Fill in the blanks and rewrite the following sentences:

Exercise 4 | Q (D) 1. | Page 183

New Ratio (less) _________ = Gain ratio

Exercise 4 | Q (D) 2. | Page 183

Retiring Partner’s share of goodwill is ________ to the remaining partner’s capital account.

Exercise 4 | Q (D) 3. | Page 183

Revaluation A/c is also known as ________ account.

Exercise 4 | Q (D) 4. | Page 183

On retirement, the balance at a current Account of a partner is transferred to his _______ account.

Exercise 4 | Q (D) 5. | Page 183

A proportion in which the continuing partners get the share of retiring partner is known as ________ ratio.

Exercise 4 | Q (E) 1. | Page 183

What is meant by Retirement of a Partner?

Exercise 4 | Q (E) 2. | Page 183

What is Benefit Ratio?

Exercise 4 | Q (E) 3. | Page 183

What is New Ratio?

Exercise 4 | Q (E) 4. | Page 183

How is the amount due to the retiring partner settled?

Exercise 4 | Q (E) 5. | Page 183

How is Gain Ratio calculated?

Exercise 4 | Q (E) 6. | Page 183

Why is retiring partner’s capital account credited with goodwill?

Exercise 4 (Practical Problems) [Pages 183 - 186]

### Balbharati solutions for Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board Chapter 4 Reconstitution of Partnership (Retirement of Partner) Exercise 4 (Practical Problems) [Pages 183 - 186]

Exercise 4 (Practical Problems) | Q 1. | Page 183

The Balance Sheet of Mr. Mama, Kaka and Mr. Baba who shared profit and losses as 4:3:3 respectively.

 Balance Sheet as on 31 st March 2018 Liabilities Amount ₹ Amount ₹ Assets Amount ₹ Amount ₹ Suppliers 7,000 Cash 4,500 Loan 5,000 Sundry Debtors 5,000 General Reserve 6,250 Less: R:D:D 500 4,500 Capital Account: Live Stock 12,500 Mama 20,000 Motor Car 4,000 Kaka 15,000 Furniture 17,500 Baba 12,250 Plant 22,500 65,500 65,500

Kaka retires on 1st April 2018 on the following terms.

1. The share of Kaka in Goodwill of the firm is valued at ₹ 2,700

2. Furniture to be depreciated by 10% and Motor Car by 12.5%

3. Live Stock to be appreciated by 10% and Plant by 20%

4. A provision of ₹ 2,000 to be made for a claim of compensation.

5. R.D.D. is no longer necessary.

6. The amount payable to Kaka should be transferred to his Loan A/c

Exercise 4 (Practical Problems) | Q 2. | Page 184

The Balance Sheet of Ram, Shyam, and Ghanshyam sharing profits and losses 3:2:1 respectively. Their position on 31-3-2019 were as follows.

 Balance Sheet as on 31st March 2019 Liabilities Amount ₹ Assets Amount ₹ Capitals : Bank 54,000 Ram 1,20,000 Debtors 90,000 Shyam 90,000 Building 60,000 Ghanshyam 60,000 Investment 1,50,000 Creditors 22,000 Bills payable 12,000 Loan 50,000 3,54,000 3,54,000

Ghanshyam retired on 1st April 2019 on the following terms.

1. Building and Investment to be appreciated by 5% and 10% respectively.

2. Provision for Doubtful Debts to be created at 5% on Debtors.

3. The provision of ₹ 3,000 be made in respect of Outstanding Salary.

4. Goodwill of the firm is valued at  ₹ 90,000 and partners decide that goodwill should be written back.

5. The amount payable to the Retiring partner be transferred to his Loan A/c.

Prepare : Profit and Loss Adjustment A/c, Partners Capital A/c, Balance Sheet of New Firm.

Exercise 4 (Practical Problems) | Q 3. | Page 184

The Balance Sheet of the Anu, Renu, and Dinu is as follows, the partners are sharing profits and losses in the proportion of 2: 2: 1 respectively.

 Balance Sheet as on 31st March 2019 Liabilities Amount ₹ Amount ₹ Assets Amount ₹ Amount ₹ Creditors 8,000 Bank 5,000 Bills Payable 2,000 Debtors 20,000 General Reserve 5,000 Less : R.D.D 1,000 19,000 Capital Account: Furniture 15,000 Anu 40,000 Machinery 4,000 Renu 30,000 Free hold Property 27,000 Dinu 15,000 Goodwill 30,000 1,00,000 1,00,000

Dinu retires from the firms on 1st April 2019 on the following terms.

1. The assets are to be revalued as freehold property  ₹ 30,000, Machinery  ₹ 5000, Furniture ₹ 12000, All debtors are good.

2. Goodwill of the firm is valued at thrice the average profit for the preceding five years. Profits of the firm for the year.

 2014-15 ₹ 14,500 2015-16 ₹ 10,500 2016-17 ₹ 10,000 2017-18 ₹ 16,000 2018-19 ₹ 10,000

3. Dinu should be paid ₹ 3,000 by cheque

4. The Balance of Dinu’s capital A/c should be kept in the business as a loan.

Prepare: Profit and loss adjustment A/c, Capital Accounts of partners, Balance Sheet of the new firm.

Exercise 4 (Practical Problems) | Q 4. | Page 185

Rohan, Rohit, and Sachin are partners in a firm sharing profit and losses in the proportion 3:1:1 respectively. Their balance sheet as on 31st March 2018 is as shown below

 Balance Sheet as on 31st March 2018 Liabilities Amount ₹ Assets Amount ₹ Creditors 40,000 Bank 12,500 General Reserve 50,000 Debtors 60,000 Bills payable 25,000 Live Stock 50,000 Capital Accounts : Building 75,000 Rohan 1,25,000 Plant and Machinery 35,000 Rohit 1,00,000 Motor Truck 1,00,000 Sachin 50,000 Goodwill 57,500 3,90,000 3,90,000

On 1st April 2018, Sachin retired and the following adjustments have been agreed upon.

1. Goodwill was revalued at ₹ 50,000

2. Assets and Liabilities were revalued as follows. Debtors ₹ 50,000, Live Stock, ₹ 45,000; Building ₹ 1,25000, Plant and Machinery ₹ 30,000, Motor Truck ₹ 95,000 and Creditors ₹ 30,000

3. Rohan and Rohit contributed additional capital through Net Banking of ₹ 50,000 and ₹ 25,000 respectively.

4. Balance of Sachin’s Capital Account is transferred to his Loan Account

Give Journal entries in the books of new firm.

Exercise 4 (Practical Problems) | Q 5. | Page 186

Shah, Lodha, and Dhole were partners sharing profits and losses in the ratio of 4:3:3. Their Balance Sheet as on 31st March 2019 is a given below.

 Balance Sheet as on 31st March 2019 Liabilities Amount ₹ Amount ₹ Assets Amount ₹ Amount ₹ Sundry Creditors 20,000 Cash 9,000 Bills payable 4,000 Sundry Debtors 10,000 Capital Account: Less: R.D.D. 1,000 9,000 Shah 45,000 Furniture 25,000 Lodha 35,000 Computers 43,000 Dhole 27,000 Vehicles 45,000 1,31,000 1,31,000

On 1st April 2019, Mr. Lodha retired from the firm on the following terms.

1. Goodwill is to be valued at average Profits and Losses of the last five years which were as follows.

 Years Profit/Loss 2015 ₹ 35,000 2016 ₹ 20,000 2017 ₹ 30,000 2018 ₹ 20,000 2019 ₹ 25,000

2. Computers to be depreciated by 10%

3. Furniture to be revalued at ₹ 27,500

4. Vehicles appreciated by 20%

5. R.D.D. was no longer necessary

6. Shah and Dhole will share the future profits and losses in the ratio of 2:1

7. It was decided that goodwill should not appear in the books of a new firm and amount payable to Lodha is to be transferred to his Loan A/c

Prepare: Profit and Loss adjustment A/c, Partners capital accounts, Balance sheet of new firm

## Chapter 4: Reconstitution of Partnership (Retirement of Partner)

Exercise 4Exercise 4 (Practical Problems)

## Balbharati solutions for Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board chapter 4 - Reconstitution of Partnership (Retirement of Partner)

Balbharati solutions for Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board chapter 4 (Reconstitution of Partnership (Retirement of Partner)) include all questions with solution and detail explanation. This will clear students doubts about any question and improve application skills while preparing for board exams. The detailed, step-by-step solutions will help you understand the concepts better and clear your confusions, if any. Shaalaa.com has the Maharashtra State Board Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board solutions in a manner that help students grasp basic concepts better and faster.

Further, we at Shaalaa.com provide such solutions so that students can prepare for written exams. Balbharati textbook solutions can be a core help for self-study and acts as a perfect self-help guidance for students.

Concepts covered in Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board chapter 4 Reconstitution of Partnership (Retirement of Partner) are Reconstitution of Partnership (Retirement of Partner), Treatment of Goodwill, Transfer of Reserve Fund Or General Reserve/Accumulated Profit Or Loss, Accounting for Revaluation of Assets and Reassessment of Liabilities, Retirement Or Death of a Partner - Adjustment of Capitals, Total Payable Amount to Retiring Partner.

Using Balbharati 12th Board Exam solutions Reconstitution of Partnership (Retirement of Partner) exercise by students are an easy way to prepare for the exams, as they involve solutions arranged chapter-wise also page wise. The questions involved in Balbharati Solutions are important questions that can be asked in the final exam. Maximum students of Maharashtra State Board 12th Board Exam prefer Balbharati Textbook Solutions to score more in exam.

Get the free view of chapter 4 Reconstitution of Partnership (Retirement of Partner) 12th Board Exam extra questions for Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board and can use Shaalaa.com to keep it handy for your exam preparation