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Retirement of a partner Quiz-2
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A, B and C are partners 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 gain/loss on revaluation was ₹2,50,000. C was paid ₹3,00,000 in full settlement. The amount of goodwill of the firm is:
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₹50,000
₹3,00,000
₹2,50,000
₹5,50,000
P, Q and R are equal partners. R retires and P and Q agree to share future profits in the ratio of 3 : 2. The goodwill of the firm is valued at ₹36,000, which will be adjusted through the entry.
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Option 1
Option 2
Option 3
Option 4
A, B and C are partners in a business. B retired from the business when his capital a/c, after all necessary adjustments, showed a balance of ₹1,09,500. It was agreed that he should be paid ₹49,500 cash on retirement and the balance in three equal yearly installments with interest at 12% per annum. Amount of last installment with interest will be:
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₹22,400
₹22,300
₹22,200
₹22,100
The amount due to the retiring partner will always be settled in cash. State True or False.
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True
False
According to Section 37 of the Indian Partnership Act, 1932, the interest payable on the amount due to the representative of the deceased partner at:
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6% p.a.
10% p.a.
Bank Rate
Market Rate
X, Y and Z are partners with capitals of ₹4,00,000, ₹3,00,000 and ₹1,00,000 respectively. On Z's retirement, his share is acquired by X and Y in the ratio of 3 : 2 respectively. Gaining ratio will be:
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4 : 3
3 : 1
4 : 1
3 : 2
Ram, Shyam and Geeta were partners sharing profits and losses in the ratio of 3 : 2 : 1. Ram retired on 31.3.2020. On that that stock and patents stood at ₹80,000 and ₹10,000 respectively. The following adjustments were agreed upon Ram's retirement: a) stock was undervalued by 20%. b) Patents are valueless. c) Provision for legal damages are made to be made for ₹10,000. What amount will be credited/debited to Ram's capital account on account of profit/loss on revaluation of assets and liabilities?
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debited by ₹18,000
debited by ₹2,000
credited by ₹5,000
Nil
Claim of the retiring partner is payable in which of the following form:
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fully paid in cash
fully transferred to loan a/c with some interest on it
partly in cash and partly as loan repayment with agreed interest
Any of the above
Under which of the following conditions, there is no need to compute the gaining ratio?
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When the continuing partners acquire the retiring/deceased partner in the old profit sharing ratio.
When the ratio in which the continuing partners acquire the share of the retiring/deceased partner is specified
Both a and b
When the continuing partners agree on a specified new profit sharing ratio.
Ashima, Bhawna and Chirag are partners sharing profits and losses in the ratio of 5 : 4 : 3. Chirag retires and it is decided that Ashima and Bhawna will share profits of Chirag in 4 : 3, new profit sharing ratio will be:
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5 : 4
4 : 3
47 : 37
5 : 3
P, Q and R are partners sharing profits in the ratio of 4 : 3: 2. R retires and he surrenders 2/3 of his share in favour of P and 1/3 share in favour of Q. The new profit sharing ratio of P and Q would be:
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16 : 11
15 : 12
17 : 10
None of these
On retirement of Hari from the firm of Hari, Ram and Sharma, the balance sheet showed a debit balance of ₹12,000 in the P&L Account. For calculating the amount payable to Hari this balance will be transferred:
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to the credit of capital accounts of Hari, Ram and Sharma equally.
to the debit of capital accounts of Hari, Ram and Sharma equally.
to the debit of capital accounts of Ram and Sharma equally.
to the credit of capital accounts of Ram and Sharma equally.
A, B and C are partners sharing profits in the ratio of 4 : 3 : 2. B retires, selling his share of profit to A and C for ₹7200 (₹4,000 paid by A and ₹3,200 paid by C). The new profit sharing ratio of A and C will be:
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17 : 10
15 : 12
19 : 8
None of these
Gaining ratio may be applied when:
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a partner is admitted
a partner retires
a business is sold out
a partner is insolvent
On retirement of a partner, the existing goodwill in the balance sheet is written off and debited to:
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All Partners' Capital A/c in the old ratio
Remaining Partners' Capital A/c in new ratio
Remaining Partners' Capital A/c in gaining ratio
None of these
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