Tamil Nadu Board of Secondary EducationHSC Commerce Class 12th
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Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Accountancy Answers Guide chapter 6 - Retirement and death of a partner [Latest edition]

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Class 12th Accountancy Answers Guide - Shaalaa.com
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Chapter 6: Retirement and death of a partner

Multiple choice questionsVery short answer questionsShort answer questionsExercises
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Multiple choice questions [Pages 215 - 216]

Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Accountancy Answers Guide Chapter 6 Retirement and death of a partnerMultiple choice questions [Pages 215 - 216]

Choose the correct answer

Multiple choice questions | Q I 1. | Page 215

A partner retires from the partnership firm on 30th June. He is liable for all the acts of the firm up to the ______.

  • End of the current accounting period

  • End of the previous accounting period

  • Date of his retirement

  • Date of his final settlement

Multiple choice questions | Q I 2. | Page 215

On the retirement of a partner from a partnership firm, accumulated profits and losses are distributed to the partners on the basis of ______.

  • New profit sharing ratio

  • Old profit sharing ratio

  • Gaining ratio

  • Sacrificing ratio

Multiple choice questions | Q I 3. | Page 215

On the retirement of a partner, general reserve will be transferred to the ______.

  • Capital account of all the partners

  • Revaluation account

  • Capital account of the continuing partners

  • Memorandum revaluation account

Multiple choice questions | Q I 4. | Page 215

On revaluation, the increase in liabilities leads to ______.

  • Gain

  • Loss

  • Profit

  • None of these

Multiple choice questions | Q I 5. | Page 215

At the time of retirement of a partner, determination of gaining ratio is required ______.

  • To transfer revaluation profit or loss

  • To distribute accumulated profits and losses

  • To adjust goodwill

  • None of these

Multiple choice questions | Q I 6. | Page 215

The final amount due to a retiring partner is not paid immediately, it is transferred to ______.

  • Bank A/c

  • Retiring partner’s capital A/c

  • Retiring partner’s loan A/c

  • Other partners’ capital A/c

Multiple choice questions | Q I 7. | Page 215

‘A’ was a partner in a partnership firm. He died on 31st March 2019. The final amount due to him is ₹ 25,000 which is not paid immediately. It will be transferred to ______.

  • A’s capital account

  • A’s loan account

  • A’s Executor’s account

  • A’s Executor’s loan account

Multiple choice questions | Q I 8. | Page 216

A, B and C are partners sharing profits in the ratio of 2:2:1. On retirement of B, goodwill of the firm was valued as ₹ 30,000. Find the contribution of A and C to compensate B:

  • ₹ 20,000 and ₹ 10,000

  • ₹ 8,000 and ₹ 4,000

  • ₹ 10,000 and ₹ 20,000

  • ₹ 15,000 and ₹ 15,000

Multiple choice questions | Q I 9. | Page 216

A, B and C are partners sharing profits in the ratio of 4:2:3. C retires. The new profit sharing ratio between A and B will be ______.

  • 4 : 3

  • 3 : 4

  • 2 : 1

  • 1 : 2

Multiple choice questions | Q I 10. | Page 216

X, Y and Z were partners sharing profits and losses equally. X died on 1st April 2019. Find out the share of X in the profit of 2019 based on the profit of 2018 which showed ₹ 36,000.

  • ₹ 1,000

  • ₹ 3,000

  • ₹ 12,000

  • ₹ 36,000

Very short answer questions [Page 216]

Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Accountancy Answers Guide Chapter 6 Retirement and death of a partnerVery short answer questions [Page 216]

Very short answer questions | Q II 1. | Page 216

What is meant by the retirement of a partner?

Very short answer questions | Q II 2. | Page 216

What is gaining ratio?

Very short answer questions | Q II 3. | Page 216

What is the purpose of calculating gaining ratio?

Very short answer questions | Q II 4. | Page 216

What is the journal entry to be passed to transfer the amount due to the deceased partner to the executor of the deceased partner?

Short answer questions [Page 216]

Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Accountancy Answers Guide Chapter 6 Retirement and death of a partnerShort answer questions [Page 216]

Short answer questions | Q III 1. | Page 216

List out the adjustments made at the time of retirement of a partner in a partnership firm.

Short answer questions | Q III 2. | Page 216

Distinguish between sacrificing ratio and gaining ratio.

Short answer questions | Q III 3. | Page 216

What are the ways in which the final amount due to an outgoing partner can be settled?

Exercises [Pages 216 - 223]

Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Accountancy Answers Guide Chapter 6 Retirement and death of a partnerExercises [Pages 216 - 223]

Retirement of a partner

Exercises | Q IV 1. | Page 216

Dheena, Surya, and Jankai are partners sharing profits and losses in the ratio of 5:3:2. on 31.3.2018, Dheena retired. On the date of retirement, the books of the firm showed a reserve fund of ₹ 50,000. The pass journal entry to transfer the reserve fund.

Exercises | Q IV 2. | Page 216

Rosi, Rathi and Rani are partners of firm sharing profits and losses equally. Rathi retired from the partnership on 1.1.2018. On that date, their balance sheet showed accumulated loss of ? 45,000 on the asset side of the balance sheet. Give the journal entry to distribute the accumulated loss.

Exercises | Q IV 3. | Page 217

Akash, Mugesh and Sanjay are partners in a firm sharing profits and losses in the ratio of 3:2:1. Their balance sheet as on 31st March, 2017 is as follows:

Liabilities Assets
Capital accounts:   1,30,000 Buildings 1,10,000
Akash 40,000 Vehicle 30,000
Mugesh 60,000 Stock in trade 26,000
Sanjay 30,000 Debtors 25,000
Profit and loss
appropriation A/c
  12,000 Cash in hand 15,000
General reserve   24,000    
Workmen compensation fund   18,000    
Bills payable    22,000    
    2,06,000   2,06,000

Pass journal entry to transfer accumulated Profit and prepare the capital account of the partners.

Revaluation of assets and liabilities

Exercises | Q IV 4. | Page 217

Roja, Neela and Kanaga are partners sharing profits and losses in the ratio of 4:3:3. On 1st April 2017, Roja retires and on retirement, the following adjustments are agreed upon:

  1. Increase the value of building by ₹ 30,000.
  2. Depreciate stock by ₹ 5,000 and furniture by ₹ 12,000.
  3. Provide an outstanding liability of ₹ 1,000.

Pass journal entries and prepare revaluation account.

Exercises | Q IV 5. | Page 217

Vinoth, Karthi and Pranav are partners sharing profits and losses in the ratio of 2:2:1. Pranav retires from partnership on 1st April 2018. The following adjustments are to be made:

  1. Increase the value of land and building by ₹ 18,000
  2. Reduce the value of machinery by ₹ 15,000
  3. A provision would also be made for outstanding expenses for ₹ 8,000.
    Give journal entries and prepare a revaluation account.
Exercises | Q IV 6. | Page 218

Chandru, Vishal and Ramanan are partners in a firm sharing profits and losses equally. Their balance sheet as on 31st March, 2018 is as follows:

Liabilities   Assets  
Capital accounts:     Furniture   60,000
Chandru 60,000 2,00,000 Machinery   1,20,000
Vishal 70,000 Sundry debtors 33,000 30,000
Ramanan 70,000 Less: Provision for doubtful debts 3,000
Bills payable   80,000 Bills receivable   50,000
      Cash at bank   20,000
    2,80,000     2,80,000

Ramanan retired on 31 st March 2019 subject to the following conditions:

  1. Machinery is valued at ₹ 1,50,000
  2. Value of furniture brought down by ₹ 10,000
  3. Provision for doubtful debts should be increased to ₹ 5,000
  4. Investment of ₹ 30,000 not recorded in the books is to be recorded now.

Pass necessary journal entries and prepare revaluation account and capital account of partners.

New profit sharing ratio and gaining ratio

Exercises | Q IV 7. | Page 218

Kayal, Mala and Neela are partners sharing profits in the ratio of 2:2:1. Kayal retires and the new profit sharing ratio between Nila and Neela is 3:2. Calculate the gaining ratio.

Exercises | Q IV 8. | Page 218

Sunil, Sumathi and Sundari are partners sharing profits in the ratio of 3:3:4. Sundari retires and her share is taken up entirely by Sunil. Calculate the new profit sharing ratio and gaining ratio.

Exercises | Q IV 9. | Page 218

Ramu, Somu and Gopu are partners sharing profits in the ratio of 3:5:7. Gopu retires and the share is purchased by Ramu and Somu in the ratio of 3:1. Find the new profit sharing ratio and gaining ratio.

Exercises | Q IV 10. | Page 218

Navin, Ravi and Kumar are partners sharing profits in the ratio of 1/2, 1/4 and 1/4 respectively. Kumar retires and his share is taken up by Navin and Ravi equally. Calculate the new profit sharing ratio and gaining ratio.

Exercises | Q IV 11. | Page 219

Mani, Gani and Soni are partners sharing the profits and losses in the ratio of 4:5:6. Mani retires from the firm. Calculate the new profit sharing ratio and gaining ratio.

Adjustment for goodwill

Exercises | Q IV 12. | Page 219

Rajan, Suman and jegan were partners in firm sharing profits and losses in the ratio of 4:3:2 Suman retired from partnership. The goodwill of the firm on the date of retirement was valued at ₹ 45,000. Pass necessary journal entries for goodwill on the assumption that the fluctuating capital method is followed.

Exercises | Q IV 13. | Page 219

Balu, Chandru and Nirmal are partners in a firm sharing profits and losses in the ratio of 5:3:2 on 31st March 2018, Nirmal retires from the firm. On the date of Nirmal’s retirement, goodwill appeared in the books of the firm at ₹ 60,000 By assuming fluctuating capital account, pass the necessary journal entry if the partners decide to

  1. write off the entire amount of existing goodwill
  2. write off half of the existing goodwill.

Adjustment for current year’s profit or loss upto the date of retirement

Exercises | Q IV 14. | Page 219

Rani, Jaya and Rathi are partners sharing profits and losses in the ratio of 2:2:1. On 31.3.2018, Rathi retired from the partnership. Profit of the preceding years is as follows: 2014: ₹ 10,000; 2015; ₹ 20,000; 2016; ₹ 18,000 and 2017; ₹ 32,000.
Find out the share of profit of Rathi for the year 2018 till the date of retirement if

  1. profit is to be distributed on the basis of the previous year’s profit
  2. Profit is to be distributed on the basis of the average profit of the past 4 years.

Also pass necessary journal entries by assuming partners’ capitals are fluctuating.

Settlement of amount due to the retiring partner

Exercises | Q IV 15. | Page 219

Kavin, Madhan, and Ranjith are partners sharing profits and losses in the ratio of 4:3:3 respectively. Kavin retires from the firm on 31st December 2018. On the date of retirement, his capital account shows a credit balance of ₹ 1,50,000. Pass journal entries if:

  1. The amount due is paid off immediately.
  2. The amount due is not paid immediately.
  3. ₹ 1,00,000 is paid and the balance in the future.
Exercises | Q IV 16. | Page 220

Manju, Chara’and Lavanya are partners in firm sharing profits and losses in the ratio of 5:3:2. The balance sheet as of 31st March, 2018 was as follows:

Liabilities Assets
Capital accounts:   1,30,000 Buildings 1,00,000
Manju 70,000 Furniture 80,000
Charu 70,000 Stock 60,000
Lavanya 70,000 Debtors 40,000
Sundry creditors   40,000 Cash in hand 20,000
Profit and loss A/c   50,000    
    3,00,00   3,00,000

Manju retired from the partnership firm on 31.03.2018 subject to the following adjustments:

  1. Stock to be depreciated by ₹ 10,000
  2. Provision for doubtful debts to be created for ₹ 3,000.
  3. Buildings to be appreciated by ₹ 28,000

Prepare revaluation account and capital accounts of partners after retirement.

Comprehensive problems

Exercises | Q IV 17. | Page 220

Kannan, Rahim, and John are partners in a firm sharing profits and losses in the ratio of 5:3:2. The balance sheet as of 31st December 2017 was as follows:

Liabilities   Assets
Capital accounts:     Buildings 90,000
Kannan 1,00,000 2,20,000 Machinery 60,000
Rahim 80,000 Debtors 30,000
John 40,000 Stock 20,000
Workmen compensation funds   30,000 Cash at bank 50,000
Creditors   20,000 Profit and loss A/c (loss) 20,000
    2,70,000   2,70,000

John retires on 1st January 2018, subject to the following conditions :

  1. To appreciate building by 10%
  2. Stock to be depreciated by 5%
  3. To provide ₹ 1,000 for bad debts
  4. An unrecorded liability of ₹ 8,000 has been noticed.
  5. The retiring partner shall be paid immediately.

Prepare revaluation account, partner’s capital account, and the balance sheet of the firm after retirement.

Exercises | Q IV 18. | Page 221

Saran, Arun, and Karan are partners in firms sharing profits and losses in the ratio of 4:3:3. The balance sheet as of 31.12.2016 was as follows:

Liabilities   Assets  
Capital accounts:     Buildings   60,000
Saran 60,000 1,50,000 Machinery   40,000
Arun 50,000 Investment   20,000
Karan 40,000 Stock   12,000
Creditors   35,000 Debtors 25,000 24,000
General reserve   15,000 Less: Provision for bad debts 1000
      Cash at bank   44,000
    2,00,000     2,70,000

Karan retires on 1.1.2017, subject to the following conditions:

  1. Goodwill of the firm is valued at ₹ 21,000 %
  2. Machinery to be appreciated by 10%
  3. Building to be valued at ₹ 80,000
  4. provision for bad debts to be raised to ₹ 2,000
  5. Stock to be depreciated by ₹ 2,000
  6. The final amount due to Karan is not paid immediately.

Prepare the necessary ledger accounts and show the balance sheet of the firm after retirement.

Exercises | Q IV 19. | Page 221

Rajesh, Sathish and Mathan are partners sharing profits and losses in the ratio of 3:2:1 respectively. Their balance sheet as on 31.3.2017 is given below.

Liabilities   Assets
Capital accounts:     Premises 4,00,000
Rajesh 4,00,000 9,50,000 Machinery 4,20,000
Sathish 3,00,000 Debtors 1,60,000
Mathan 2,50,000 Stock 3,00,000
General reserve   1,20,000 Cash at bank 20,000
Creditors   50,000    
Bills payable   1,80,000    
    13,00,000   13,00,000

Mathan retires on 31st March, 2017 subject to the following conditions :

  1. Rajesh and Sathis will share profits and losses in the ratio of 3:2
  2. Assets are to be revalued as follows;
    Machinery ₹ 4,50,000, Stock ₹ 2,90,000 , Debtors ₹ 1,52,000
  3. Goodwill of the firm is valued at ₹ 1,20,000.

Prepare the necessary ledger accounts and the balance sheet immediately after the retirement of Mathan.

Death of a partner

Exercises | Q IV 20. | Page 222

Janani, Janaki and Jamuna are partners sharing profits and losses in the ratio of 3:3:1 respectively. Janaki died on 31st December, 2017. Final amount due to her showed a credit balance of ₹ 1,40,000. Pass journal entries if,

  1. The amount due is paid off immediately.
  2. The amount due is not paid immediately.
  3. ₹ 75,000 is paid and the balance in future.
Exercises | Q IV 21. | Page 222

Varsha, Shanthi and Madhuri are partners, sharing profits in the ratio of 5:4:3. Their balance sheet as on 31st December 2017 is as under:

Balance Sheet as on 31.12.2018

Liabilities   Assets
Capital accounts:     Premises 1,20,000
Varsha 80,000 1,60,000 Stock 40,000
Shanthi 60,000 Debtors 50,000
Madhuri 20,000 Cash at bank 18,000
General reserve   48,000 Profit and loss A/c (loss) 12,000
Sundry creditors   32,000    
    2,40,000   2,40,000

On 1.1.2018, Madhuri died and on her death the following arrangements are made:

  1. Stock to be depreciated by ₹ 5,000
  2. Premises is to be appreciated by 20%
  3. To provide ₹ 4,000 for bad debts
  4. The final amount due to Madhuri was not paid.

Prepare revaluation account, partners’ capital account and the balance sheet of the firm after death.

Exercises | Q IV 22. | Page 223

Vijayan, Sudhan, and Suman are partners who share profits and losses; in the capital ratio. Their balance sheet as of 31st December 2018 is as follows:

Balance Sheet as on 31.12.2018

Liabilities   Assets
Capital accounts:     Buildings 80,000
Vijayan 70,000 1,50,000 Stock 45,000
Sudhan 50,000 Debtors 30,000
Suman 30,000 Cash at bank 20,000
General reserve   18,000 Cash in hand 15,000
Creditors   17,000    
    1,85,000   1,85,000

Suman died on 31.3.2019. On the death of Suman, the following adjustments are made:

  1. Building is to be valued at ₹ 1,00,000
  2. Stock to be depreciated by ₹ 5,000
  3. Goodwill of the firm is valued at ₹ 36,000
  4. Share of profit from the closing of the last financial year to the date of death on the basis of the average of the three completed year’s profit before death.

Profit for 2016, 2017 and 2018 were ₹ 40,000,₹ 50,000 and ₹ 30,000 respectively.

Prepare the necessary ledger accounts and the balance sheet immediately after the death of Suman.

Chapter 6: Retirement and death of a partner

Multiple choice questionsVery short answer questionsShort answer questionsExercises
Class 12th Accountancy Answers Guide - Shaalaa.com

Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Accountancy Answers Guide chapter 6 - Retirement and death of a partner

Tamil Nadu Board Samacheer Kalvi solutions for Class 12th Accountancy Answers Guide chapter 6 (Retirement and death of a 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 Tamil Nadu Board of Secondary Education Class 12th Accountancy Answers Guide solutions in a manner that help students grasp basic concepts better and faster.

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Concepts covered in Class 12th Accountancy Answers Guide chapter 6 Retirement and death of a partner are Retirement and Death of a Partner, Adjustments Required on Retirement of a Partner, Determination of New Profit Sharing Ratio and Gaining Ratio, Distribution of Accumulated Profits, Reserves and Losses, Adjustment for Current Year’s Profit or Loss upto the Date of Retirement, Settlement of the Amount Due to the Retiring Partner, Revaluation of Assets and Liabilities, Adjustment for Goodwill, Adjustments Required on the Death of a Partner.

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