Test: Retirement Of A Partner - 3


23 Questions MCQ Test Principles and Practice of Accounting | Test: Retirement Of A Partner - 3


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QUESTION: 1

Retiring or outgoing partner:

Solution:
QUESTION: 2

A, B and C are partners with profits sharing ratio 4:3:2. B retires and Goodwill Rs. 10,800 shown in books of account. If A & C shares profits of B in 5:3, then find the new profit sharing ratio.

Solution:
QUESTION: 3

A, B and C are partners with profits sharing ratio 4:3:2. B retires and Goodwill Rs. 10,800 was shown in books of account. If A & C shares profits of B in 5:3, then find the value of goodwill shared between A and C.

Solution:
QUESTION: 4

C, D and E are partners sharing profits and losses in the proportion of ½, 1/3 and 1/6. D retired and the new profit sharing ratio between C and E is 3:2 and the Reserve of Rs. 12,000 is divided amount the partners in the ratio:

Solution:
QUESTION: 5

The capitals of A, B and C are Rs. 1,00,000; Rs. 75,000 and Rs. 50,000, profits are shared in the ratio of 3:2:1. B retires on the basis that his shares is purchased by other partners keeping the total capital intact. The new ratio between A and C is 3:1. Find the capital of A and C after purchasing B’s share..

Solution:
QUESTION: 6

Outgoing partner is compensated for parting with firm’s future profits in favour of remaining partners. In what ratio do the remaining partners contribute to such compensation amount?

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QUESTION: 7

Joint Life Policy is taken by the firm on the life(s) of ………

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QUESTION: 8

At the time of retirement of a partner, firm gets ……… from the insurance company against the Joint Life Policy taken jointly for all the partners.

Solution:
QUESTION: 9

At the time of retirement of a partner, firm gets ……… from the insurance company against the Joint Life Policy taken severely for each partner.

Solution:
QUESTION: 10

A, B and C takes a Joint Life Policy, after five years B retires from the firm. Old profit sharing ratio is 2:2:1. After retirement A and C decides to share profits equally. They had taken a Joint Life Policy of Rs. 2,50,000 with the surrender value Rs. 50,000. What will be the treatment in the partner’s capital account on receiving the JLP amount if joint life premium is fully charged to revenue as and when paid?

Solution:
QUESTION: 11

A, B and C takes a Joint Life Policy, after five years, B retires from the firm. Old profit sharing ratio is 2:2:1. After retirement A and C decides to share profits equally. They had taken a Joint Life Policy of Rs. 2,50,000 with the surrender value Rs. 50,000. What will be the treatment in the partner’s capital account on receiving the JLP amount if joint life policy is maintained at the surrender value?

Solution:
QUESTION: 12

A, B and C takes a Joint Life Policy, after five years B retires from the firm. Old profit sharing ratio is 2:2:1. After retirement A and C decides to share profits equally. They had taken a Joint Life Policy of Rs. 2,50,000 with the surrender value Rs. 50,000. What will be the treatment in the partner’s capital account on receiving the JLP amount if joint life policy is maintained at surrender along with the reserve?

Solution:
QUESTION: 13

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

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QUESTION: 14

Claim of the retiring partner is payable in the following form.

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QUESTION: 15

A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1 respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.

Solution:
QUESTION: 16

A, B and C are partners sharing profits and losses in the ratio of 3:2:1. C retires on a decided date and Goodwill of the firm is to be valued at Rs. 60,000. Find the amount payable to retiring partner on account of goodwill.

Solution:
QUESTION: 17

A, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retired and Goodwill of the firm is to be valued at Rs. 24,000 and Goodwill Account is to be raise which is not appearing in the balance sheet. What will be the treatment for goodwill?

Solution:
QUESTION: 18

A, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retired and firm received the joint life policy as Rs. 7,500 appearing in the balance sheet at Rs. 10,000. JLP is credited and cash debited with Rs. 7,500, what will be the treatment for the balance in Joint Life Policy?

Solution:
QUESTION: 19

Balances of M/s. Ram, Rahul and Rohit sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: Ram Rs. 3,00,000; Rahul Rs. 2,00,000 and Rohit Rs. 1,00,000. Ram desired to retire form the firm and the remaining partners decided to carry on, Joint life policy of the partners surrendered and cash obtained Rs. 60,000. What will be the treatment for JLP?

Solution:
QUESTION: 20

Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000; JLP Reserve Rs. 80,000 and JLP Rs. 80,000. A desired to retire form the firm and the remaining partners decided to carry on in equal ratio, Joint life policy of the partners surrendered and cash obtained Rs. 80,000. What will be the treatment for JLP?

Solution:
QUESTION: 21

Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.

Solution:
QUESTION: 22

Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. JLP Reserve and JLP at Rs. 80,000. A desired to retire form the firm, B and C share the future profits equally. Joint life policy of the partners surrendered and cash obtained Rs. 80,000. Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.
Revaluation Loss was Rs. 10,000. Amount due to A is to be settled on the following basis: 50% on retirement and the balance 50% within one year. The total capital of the firm is to be the same as before retirement. Individual capitals in their Profit sharing ratio. Find the balances of Partner’s Capital Account

Solution:
QUESTION: 23

Balances of Ram, Hari & Mohan sharing profits and losses in the ratio 2:3:2 stood as follows: Capital Accounts: Ram Rs. 10,00,000; Hari Rs. 15,00,000; Mohan Rs. 10,00,000; Joint Life Policy Rs. 3,50,000. Hari desired to retire from the firm and the remaining partners decided to carry on with the future profit sharing ratio of 3:2. Joint Life Policy of the partners surrendered and cash obtained Rs. 3,50,000. What would be the treatment for JLP?

Solution:

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