Question 1

Q.No.1 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionA, B and C were partners sharing profits and losses in the ratio of 3:2:1. Find the new profit-sharing ratio if (i) A retires, (ii) B retires, and (iii) C retires.SolutionNote: When no partner is said to gain more than their existing share, the remaining partners simply carry forward their old ratio to each other.WorkingParticularsValueOld Ratio (A, B, C)3 : 2 : 1(i) A retires — remaining B and C keep their old relative ratio2 : 1(ii) B retires — remaining A and C keep their old relative

Question 2

Q.No.2 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionA, B and C were partners sharing profits in the ratio of 5:3:2. B retires from the firm. Calculate the new profit-sharing ratio of A and C.SolutionWorkingParticularsValueOld Ratio (A, B, C)5 : 3 : 2B retires — remaining A and C keep their old relative ratio5 : 2Answer: New Ratio of A and C = 5 : 2.

Question 3

Q.No.3 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionE, F, G are partners sharing profits in the ratio of 3:2:1. E retires and his share in profit will be shared by F and G in the ratio of 2:3. Find out the new profit-sharing ratio.SolutionWorkingParticularsValueE's share (retiring)1/2F's gain (2/5 of E's share)1/5G's gain (3/5 of E's share)3/10New F's share1/3 + 1/5 = 8/15New G's share1/6 + 3/10 = 7/15New Ratio (F : G)8 : 7Answer: New Ratio F : G = 8 : 7.

Question 4

Q.No.4 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionJ, K and L are partners sharing profits in the ratio of 5:2:1. K decides to retire and his share was taken up by L entirely. Find out the new profit-sharing ratio.SolutionWorkingParticularsValueK's share (retiring), taken entirely by L1/4New J's share (unchanged)5/8New L's share1/8 + 1/4 = 3/8New Ratio (J : L)5 : 3Answer: New Ratio = 5 : 3.

Question 5

Q.No.5 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionM, N, O and P are partners sharing profits in the ratio of 6:5:3:2. Calculate the new ratio and the gaining ratio, when (i) M retires, (ii) N retires, (iii) O retires and (iv) P retires.SolutionNote: Since no separate agreement about who gains how much is mentioned, the remaining partners gain in exactly their own old relative proportions — so here the Gaining Ratio in each case is the same as the New Ratio.WorkingParticularsValueOld Ratio (M, N, O, P)6 : 5 : 3 : 2(i) M retires5 : 3 : 2(

Question 6

Q.No.6 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionRina, Tina and Mina were partners sharing profits in the ratio of 7:2:1. Rina retires and Tina and Mina decide to share profits in the ratio of 5:7. Calculate gaining ratio.SolutionWorkingParticularsValueOld Ratio (Rina, Tina, Mina)7 : 2 : 1New agreed ratio (Tina, Mina)5 : 7Tina's Gain5/12 − 1/5 = 13/60Mina's Gain7/12 − 1/10 = 29/60Gaining Ratio (Tina : Mina)13 : 29Answer: Gaining Ratio = 13 : 29.

Question 7

Q.No.7 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionP, Q and R have been sharing profits in the ratio of 4:2:1. Q retires. P and R take Q's share equally. Calculate New ratio and gaining ratio.SolutionWorkingParticularsValueQ's share (retiring), taken equally by P and R2/7Each of P and R gets1/7New Ratio (P : R)5 : 2Gaining Ratio (P : R)1 : 1Answer: New Ratio = 5 : 2; Gaining ratio = 1 : 1.

Question 8

Q.No.8 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionPriti, Sweety and Prachi are partners sharing profits in the ratio of 5:4:1. Prachi retires and her share is taken up entirely by Sweety. Calculate new ratio.SolutionWorkingParticularsValuePrachi's share (retiring), taken entirely by Sweety1/10New Priti's share (unchanged)1/2New Sweety's share2/5 + 1/10 = 1/2New Ratio (Priti : Sweety)1 : 1Answer: New ratio = 1 : 1.

Question 9

Q.No.9 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionAman, Ashish and Namish are partners in a business and divide profit and loss in the ratio of 15:9:8 respectively. Namish retires. Aman and Ashish decide to share profits in equal proportion. Calculate the gaining ratio.SolutionWorkingParticularsValueOld Ratio (Aman, Ashish, Namish)15 : 9 : 8New agreed ratio (Aman, Ashish) — equal1 : 1Aman's Gain1/2 − 15/32 = 1/32Ashish's Gain1/2 − 9/32 = 7/32Gaining Ratio (Aman : Ashish)1 : 7Answer: Gaining Ratio = 1 : 7.

Question 10

Q.No.10 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionA, B and C are partners with capital of ₹1,00,000, ₹75,000 and ₹50,000 respectively. On C’s retirement, his share is acquired by A and B in the ratio of 6:4 respectively. Ascertain new profit sharing ratio and gaining ratio.SolutionNote: The capital figures given are not used for the ratio itself — with no profit-sharing ratio stated for A, B and C, the standard assumption is that they shared profits equally.WorkingParticularsValueOld Ratio (A, B, C) — equal, since no profit-sharing rati

Question 11

Q.No.11 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionMathur, Kansal and Bansal are partners sharing profits in the proportion of 2/10:5/10:3/10. Kansal retires and the goodwill of the firm is calculated at ₹24,000. No goodwill appears as yet in the books of the firm. Mathur and Bansal decide to share profits in future in the ratio of 3:2. Give journal entries to record the above.SolutionWorkingParticularsValueOld Ratio (Mathur, Kansal, Bansal)2 : 5 : 3Kansal's share (retiring)1/2 of ₹24,000 = ₹12,000Gaining Ratio (Mathur : Bansal)4 : 1Date

Question 12

Q.No.12 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionMina, Rina and Tina are partners sharing profits and losses in the ratio of 2:1:1. On Tina’s retirement, the value of firm’s goodwill was agreed at ₹48,000. Mina and Rina agreed to share future profits and losses in the ratio of 3:1 respectively. Give necessary journal entry in relation to goodwill without opening its account.SolutionWorkingParticularsValueOld Ratio (Mina, Rina, Tina)2 : 1 : 1New Ratio (Mina, Rina)3 : 1Mina's Gain3/4 − 1/2 = 1/4Rina's Gain1/4 − 1/4 = 0 (no change)Tina's

Question 13

Q.No.13 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionKavi, Ravi, Kumar and Guru were partners in a firm sharing profits in the ratio of 3:2:2:1. On 1st Feb., 2017, Guru retired and the new profit sharing ratio decided between Kavi, Ravi and Kumar was 3:1:1. On Guru’s retirement, the goodwill of the firm was valued at ₹3,60,000. Showing your working notes clearly, pass necessary journal entry in the books of the firm for the treatment of goodwill on Guru’s retirement. [CBSE (AI) 2017]SolutionNote: Not every remaining partner gains here — Ka

Question 14

Q.No.14 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionP, Q, R and S were partners in a firm sharing profits in the ratio of 5:3:1:1. On 1st January, 2017, S retired from firm. The new profit sharing ratio between P, Q and R will be 4:3:3. Showing your working notes clearly, pass necessary journal entry for the treatment of goodwill in the books of the firm on S’s retirement. The goodwill of the firm was valued at ₹4,20,000. [CBSE (F) 2017]SolutionWorkingParticularsValueOld Ratio (P, Q, R, S)5 : 3 : 1 : 1New Ratio (P, Q, R)4 : 3 : 3P's chang

Question 15

Q.No.15 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionX, Y and Z are partners sharing profits in the ratio of 7:5:4. Z retires and the goodwill of the firm is valued at ₹80,000. No goodwill account appears as yet in the books of the firm. X and Y will share future profits equally. Pass necessary journal entry for the treatment of goodwill by opening current accounts of partners.SolutionWorkingParticularsValueOld Ratio (X, Y, Z)7 : 5 : 4New Ratio (X, Y) — equal1 : 1X's Gain1/2 − 7/16 = 1/16Y's Gain1/2 − 5/16 = 3/16DateParticularsL.F.Dr. (&#8

Question 16

Q.No.16 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

Question(a) P, Q and R are equal partners. Goodwill is appearing in their books at ₹30,000. R retires and on the eve of R’s retirement, goodwill is valued at ₹72,000. Pass the necessary journal entry.(b) L, P and G are partners. G retires from the firm. On G’s retirement goodwill has been valued at ₹1,50,000. There was a goodwill account in the books with a balance of ₹1,80,000. Pass the necessary journal entry.SolutionNote: Case (a): first, the existing Goodwill already on the books is written

Question 17

Q.No.17 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionSonia, Tania and Mania are partners sharing profits in the ratio of 6:4:2. Tania retires and goodwill of the firm is valued at ₹72,000. Sonia and Mania decided to share profit in future in the ratio of 6:4. Pass necessary journal entries.SolutionWorkingParticularsValueOld Ratio6 : 4 : 2 = 3 : 2 : 1Tania's share1/3 of ₹72,000 = ₹24,000Gaining Ratio (Sonia : Mania)3 : 7DateParticularsL.F.Dr. (&#8377;)Cr. (&#8377;)Sonia's Capital A/c Dr.Mania's Capital A/c Dr.   To Tania's Ca

Question 18

Q.No.18 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionA, B and C are partners sharing profits in the ratio of 2:2:1. On 1st April, 2018, Goodwill of the firm was valued at ₹45,000. Goodwill does not appear in books. On this date A retires. Pass journal entry.SolutionWorkingParticularsValueOld Ratio2 : 2 : 1A's share2/5 of ₹45,000 = ₹18,000Gaining Ratio (B : C) — unchanged old relative ratio2 : 1DateParticularsL.F.Dr. (&#8377;)Cr. (&#8377;)B's Capital A/c Dr.C's Capital A/c Dr.   To A's Capital A/c(Being goodwill adjusted on A

Question 19

Q.No.19 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionKamla, Bimla, Sarla and Nirmala are partners in a firm sharing profits and losses in the ratio of 2:1:2:1. On Kamla’s retirement, the goodwill of the firm is valued at ₹36,000. Bimla, Sarla and Nirmala decided to share future profits equally. Pass the necessary Journal entry for the treatment of goodwill without opening Goodwill Account.SolutionWorkingParticularsValueOld Ratio (Kamla, Bimla, Sarla, Nirmala)2 : 1 : 2 : 1New Ratio (Bimla, Sarla, Nirmala) — equal1 : 1 : 1Sarla's change1/3 −

Question 20

Q.No.20 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

Sarbjit Singh · Accepted Answer

QuestionA, B and C are partners sharing profits in the ratio 1:2:3. C retires and his capital after making adjustments for reserves and profit on revaluation stands at ₹7,20,000. A and B agreed to pay him ₹9,00,000 in full settlement of his claim. Record necessary journal entry for the treatment of goodwill if the new profit-sharing ratio is decided as 1:3 between partners.SolutionWorkingParticularsValueC's implied goodwill compensation₹9,00,000 − ₹7,20,000 = ₹1,80,000Implied total Goodwill of t

Particulars	Value
Old Ratio (A, B, C)	3 : 2 : 1
(i) A retires — remaining B and C keep their old relative ratio	2 : 1
(ii) B retires — remaining A and C keep their old relative ratio	3 : 1
(iii) C retires — remaining A and B keep their old relative ratio	3 : 2

V K Accountancy Class 12-2021-22 - NPO and Partnership-Solution Solutions Chapter No. 5 Retirement and Death of a Partner

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Table of Contents

Q.No.1 | Retirement and Death of a Partner | V K Accountancy Class 12 (NPO and Partnership)

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