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Micheal Vaz solutions for 12th Board Exam Book Keeping and Accountancy chapter 5 - Reconstitution of Partnership (Death of Partner)

Micheal Vaz Class 12 Accounts - Book Keeping and Accountancy

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Micheal Vaz Micheal Vaz Class 12 Accounts - Book Keeping and Accountancy

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Chapter 5: Reconstitution of Partnership (Death of Partner)

ExercisePractical Problems

Chapter 5: Reconstitution of Partnership (Death of Partner) Exercise Exercise solutions [Page 140]

Exercise | Q 1 | Page 140

Answer in one Sentence :
What is gaining ratio or benefit ratio?

Exercise | Q 2 | Page 140

Answer in one Sentence :
How is gaining ratio calculated?

Exercise | Q 3 | Page 140

Answer in one Sentence :
When is gaining ratio required to be calculated?

Exercise | Q 4 | Page 140

Answer in one Sentence :
How would you treat general reserve on death of a partner?

Exercise | Q 5 | Page 140

Answer in one Sentence :
How much amount due to the deceased partner is calculated?

Exercise | Q 6 | Page 140

Answer in one Sentence :
How is amount due to deceased partner settled?

Exercise | Q 7 | Page 140

Answer in one Sentence :
How is the share of deceased partner in accrued profit calculated?

Exercise | Q 8 | Page 140

Answer in one Sentence :
How is a debit balance of profit and loss account dealt with on death of a partner?

Chapter 5: Reconstitution of Partnership (Death of Partner) Exercise Exercise solutions [Page 140]

Exercise | Q 1 | Page 140

Give a word / term / phrase which can substitute the following statements :
The account which shows revaluation of assets and liabilities.

Exercise | Q 2 | Page 140

Give a word / term / phrase which can substitute the following statements :
Excess of credit side over debit side of revaluation account.

Exercise | Q 3 | Page 140

Give a word / term / phrase which can substitute each of the following statements :
The method under which payment is made to retiring partner in instalment.

Exercise | Q 4 | Page 140

Give a word / term / phrase which can substitute the following statements :
Excess of proportionate at capital over actual capital.

Exercise | Q 5 | Page 140

Give a word / term / phrase which can substitute  the following statements :
The account to which deceased partners capital balance is transferred.

Exercise | Q 6 | Page 140

Give a word / term / phrase which can substitute the following statements :
The partner who died.

Exercise | Q 7 | Page 140

Give a word / term / phrase which can substitute the following statements :
A person who represents the deceased partner.

Chapter 5: Reconstitution of Partnership (Death of Partner) Exercise Exercise solutions [Page 140]

Exercise | Q 1 | Page 140

Select the most appropriate answer from the alternatives given below :

Gaining ratio is calculated on ___________.

  • admission of a partner

  • retirement of a partner

  • death of a partner

  • retirement or death of a partner

Exercise | Q 2 | Page 140

Select the most appropriate answer from the alternatives given below :
Gaining ratio is the ratio in which ________________.

  • the old partner gains on admission of a new partner

  • the goodwill of a new partner on admission is credited to old partners

  • the continuing partner’s benefits on retirement or death of a partner

  • none of the above

Exercise | Q 3 | Page 140

Select the most appropriate answer from the alternatives given below :

Share of profit of a deceased partner till the date of death is _________________.

  • debited to P/L Adjustment A/c

  • credited to P/L Adjustment A/c

  • debited to P/L Suspense A/c

  • credited to P/L Suspense A/c

Exercise | Q 4 | Page 140

Select the most appropriate answer from the alternatives given below :

An amount received from the Insurance Company against the joint life policy is __________.

  • debited to deceased partner

  • credited to deceased partner

  • credited to continuing partners capital A/c

  • credited to all partners capital A/c in their profit sharing ratio.

Exercise | Q 5 | Page 140

Select the most appropriate answer from the alternatives given below :

M.N.S. are partners in a firm having joint life policy of Rs 10,00,000 on which premium has been paid by a firm. M dies and his legal representatives want the whole amount of the policy where as N & S want to distribute the amount among all the partners.

  • M’s representatives and correct

  • N & S are correct

  • All are wrong

  • Insurance company will decide

Chapter 5: Reconstitution of Partnership (Death of Partner) Exercise Exercise solutions [Page 141]

Exercise | Q 1 | Page 141

State whether the following statements is true or false :

Retiring partner is entitled to his share of goodwill.

  • True

  • False

Exercise | Q 2 | Page 141

State whether the following statements is true or false :

Retiring partner is not entitled to his share of general reserve.

  • True

  • False

Exercise | Q 3 | Page 141

State whether the following statements is true or false :
The capital account of a retiring partner always shows a debit balance.

  • True

  • False

Exercise | Q 4 | Page 141

State whether the following statements is true or false :

An amount due to a deceased partner is transferred to his executor’s loan A/c.

  • True

  • False

Exercise | Q 5 | Page 141

State whether the following statements is true or false :

If goodwill is written off retiring partner’s capital account is debited.

  • True

  • False

Exercise | Q 6 | Page 141

State whether the following statements is true or false :

Death of a partner is like a compulsory retirement.

  • True

  • False

Exercise | Q 7 | Page 141

State whether the following statements is true or false :

Total amount due to deceased partner is paid in cash to executor immediately after his death.

  • True

  • False

Exercise | Q 8 | Page 141

State whether the following statements is true or false :

On the death of a partner, his share in the goodwill is divided equally among continuing partners.

  • True

  • False

Exercise | Q 9 | Page 141

State whether the following statements is true or false :

Deceased Partner’s share in profit up to the date of his death will be debited to his capital A/c.

  • True

  • False

Chapter 5: Reconstitution of Partnership (Death of Partner) Exercise Practical Problems solutions [Pages 141 - 144]

Practical Problems | Q 1 | Page 141

Vilas, Mangal, Guru were partners in a business sharing profits and losses in the ratio of 2:1:1 respectively. Their Balance sheet as on 31st March, 2012 was as follows: 

          Balance Sheet as on 31st March 2012

Liabilities  Amount (Rs) Assets Amount (Rs)
Capital   Land and Building 6,000
Vilas 6,000 Debtors 5,000
Mangal 7,000 Stock 3,000
Guru 3,400 Cash 6,000
Creditors 2,000    
General Reserve 1,600  
  20,000   20,000

Guru died on 1st July, 2012

1) Land and Building was to be revalued to Rs 7,000 and RDD was to be created of Rs 200.

2) The drawings of Guru upto the date of his death amounted to Rs 1,000/-

3) Charge interest on drawings Rs 100/-

4) His share of goodwill should be calculated at ‘Three’ years purchase of the profits for the last four years which were Rs 15,000, Rs 13,000/-, Rs 7,000, Rs 5,000

5) The deceased partners share of profit upto the date of his death to be calculated on the basis of average profit of last two years.

Prepare:

1) Profit and Loss Adjustment A/c

2) Partners Capital A/cs

3) Balance Sheet of the continuing firm

4) Give working or share of profit and goodwill

Practical Problems | Q 2 | Page 142

Sheetal, Anjali, Rajendra were sharing profits and losses as 7:5:4. Their Balance sheet as on 31st March, 2011:

           Balance Sheet as on 31st March 2012

Liabilities  Amount (Rs) Assets Amount (Rs)
Capital   Furniture 17,000
Sheetal 23,000 Machinery 18,000
Anjali 15,000 Building 16,000
Rajendra 12,000 Cash 37,000
Bills Payable 4000    
Creditors 8000  
Loan 10,000  
General Reserve 16,000  
  88,000   88,000

Rajendra died on 30th June 2012 and the following adjustments were agreed as per deed.

1) Furniture, Machinery and Building are to be revalued at Rs 16,700/-, Rs 16,200, to Rs 30,100.

2) Rajendra’s share is goodwill to be valued from firm’s goodwill which was valued at two times the average profit of last three years. Profits of last three years Rs 30,000, Rs 25,000, Rs 20,000/-.

3) His profit upto the date of death is to be calculated on the basis of last years profit.

4) Rajendra was entitled to get a salary of Rs 800/-per month.

5) Interest on capital at 10% be allowed.

6) Rajendra’s drawing upto date of death were Rs 600 p.m. 
Prepare:
1) Rajendra’s Capital A/c showing amount payable to his executor
2) Give working of share of goodwill and profit

Practical Problems | Q 3 | Page 142

The Balance sheet of Mohan, Subhash and Babi as on 31st December, 2011 was as under. They were sharing profits and losses in the ratio of 2:1:1.

            Balance Sheet as on 31st December,2011

Liabilities  Amount (Rs) Assets Amount (Rs)
Capital   Investments 20000
Mohan 25,000 Buildings 33000
Subhash 15,000 Debtors 12000
Babi 15,000 Stock 28000
Creditors 30,000 Cash   8000
Reserve 16000    
  101000   101000

Babi died on 1st July, 2012 and partnership deed provided that in the event of death of the partner his executor will be entitled to be paid out.

1) Capital to the credit at the date of last balance sheet

2) Proportion of reserves

3) Proportion of goodwill to be calculated twice the average profits of last three years.

4) His proportion of profits to the date of death based on the average profits of the last three year plus 20%.

5) The net profits for last 3 years Rs 18,000, Rs 18,000, Rs 16,500.

6) Babi had withdrawn Rs 6,000/- to the date of her death.

7) The investments were sold at par and the amount was paid off to Babi’s executor and the balance was transferred to loan A/c.

Prepare: 
1) Babi’s Capital A/c only.

Practical Problems | Q 4 | Page 143

Minaxi, Ramesh and Poonam were partners sharing profits and losses in the proportion to their capitals, Their Balance sheet of the firm on 31st March, 2012 was as under:

           Balance Sheet as on 31st March, 2012

Liabilities Amount (Rs) Assets Amount (Rs)
Capital   Land and Building 40,000
Minaxi 30,000 Investment 20,000
Ramesh 20,000 Debtors 16,000 14,000
Poonam 10,000 Less : R.D.D 2,000
Creditors 28,000 Stock 18,000
Reserve 18,000 Cash  14,000
  1,06,000   1,06,000

Poonam died on 1st August, 2012 and the following adjustments were made

1) Assets revalued as under-Land & Building Rs 44,000, Investment Rs 18,000, Stock Rs 17,000.

2) All debtors were good.

3) Goodwill of the firm valued at two times the average profits of the last 4 years. No goodwill account to be shown in the books of the firm.

4) Poonam’s share of profit upto her death to be calculated on the basis of average profits of last two year.

5) Profits were Rs 6,000, Rs 12,000, Rs 7,000, Rs 11,000
Prepare:
1) Profits and loss adjustment A/c
2) Balance sheet as on 1st August 2012

Practical Problems | Q 5 | Page 144

Vishnu, Prabhakar and Krishna were partners in a business sharing profits and losses in the ratio of 3:1:1 respectively. Their Balance Sheet as on 31st March, 2012 was as follows:

         Balance Sheet as on 31st March, 2012

Liabilities  Amount (Rs) Assets Amount (Rs)
Capital  

Plant and Machinery

35,000
Vishnu 40,000 Stock 25,000
Prabhakar 30,000 Debtors 20,000
Krishna 25,000 Cash 20,000
Creditors 5,000    
Reserve Fund 10,000    
  1,10,000   1,10,000

Krishna died on 1st October, 2012 and the partnership deed provided that:

1) The deceased partner to be given his share of profit to the date of death on the basis of the profits of the previous year.

2) His share of goodwill will be calculated on two years purchase of average profit of the last 4 years. The net profit for last 4 years were Rs 70,000, Rs 55,000, Rs 45,000, Rs 30,000

3) Plant and Machinery to be valued at Rs 40,000. Reserve for doubtful debts of Rs 2,000 to be created.

4) The drawings of Krishna upto the death amounted to Rs 20,000

5) Interest on capital at 10% p.a. is to be allowed and 6% p.a. to be charged on drawings. Both the interest should be calculated for 6 months. 
Prepare:
1) Krishna’s capital A/c and P/L Adjustment A/c

Chapter 5: Reconstitution of Partnership (Death of Partner)

ExercisePractical Problems

Micheal Vaz Micheal Vaz Class 12 Accounts - Book Keeping and Accountancy

Micheal Vaz Class 12 Accounts - Book Keeping and Accountancy - Shaalaa.com

Micheal Vaz solutions for 12th Board Exam Book Keeping and Accountancy chapter 5 - Reconstitution of Partnership (Death of Partner)

Micheal Vaz solutions for 12th Board Exam Accounts chapter 5 (Reconstitution of Partnership (Death 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 Micheal Vaz Class 12 Accounts - Book Keeping and Accountancy solutions in a manner that help students grasp basic concepts better and faster.

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Concepts covered in 12th Board Exam Book Keeping and Accountancy chapter 5 Reconstitution of Partnership (Death of Partner) are Meaning of Reconstitution, Different Ways of Reconstitution, Admission of a Partner, Need of Admission of a Partner, Capital Brought by New Partner, Admission of a Partner - Sacrifice Ratio and New Ratio, Concept of Goodwill, Admission of a Partner - Adjustment of Accumulated Profits and Losses, Admission of a Partner - Revaluation of Assets and Liabilities, Admission of a Partner - Adjustment of Capitals, Admission of a Partner - Treatment of Goodwill, Meaning of Retirement Or Death of a Partner, Needs of Retirement Or Death of a Partner, Retirement Or Death of a Partner - Treatment of Goodwill, Retirement Or Death of a Partner - Adjustment of Accumulated Profits and Losses, Retirement Or Death of a Partner - Revaluation of Assets and Liabilities, Retirement Or Death of a Partner - Adjustment of Capitals, Retirement Or Death of a Partner - New Ratio, Retirement Or Death of a Partner - Gain Ratio, Retirement Or Death of a Partner - Amount Due to Retiring Parter, Reconstitution of Partnership Examples and Solutions.

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