Test: Reconstitution of a Partnership Firm : Retirement/Death of a Partner- Case Based Type Questions


12 Questions MCQ Test Accountancy Class 12 | Test: Reconstitution of a Partnership Firm : Retirement/Death of a Partner- Case Based Type Questions


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Attempt Test: Reconstitution of a Partnership Firm : Retirement/Death of a Partner- Case Based Type Questions | 12 questions in 24 minutes | Mock test for Commerce preparation | Free important questions MCQ to study Accountancy Class 12 for Commerce Exam | Download free PDF with solutions
QUESTION: 1

Read the following information and answer the given questions:

Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Karan retires and surrenders 5/25th share in favour of Rohit. The goodwill of the firm is valued at 2 years’ purchase of Super Profit based on average profits of the last three years. The profits for the last three years are ₹50,000, ₹55,000 and ₹60,000, respectively. The normal profits for the similar firm are ₹30,000. Goodwill already appears in the books of the firm at ₹75,000.

Q. What amount will be brought in by Rohit as goodwill for Karan?

Solution: The goodwill is to be brought in by Rohit himself as he is the only gaining partner.

Karan's share of Goodwill = ₹50,000 x 5/25 = ₹10,000

QUESTION: 2

Read the following information and answer the given questions:

Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Karan retires and surrenders 5/25th share in favour of Rohit. The goodwill of the firm is valued at 2 years’ purchase of Super Profit based on average profits of the last three years. The profits for the last three years are ₹50,000, ₹55,000 and ₹60,000, respectively. The normal profits for the similar firm are ₹30,000. Goodwill already appears in the books of the firm at ₹75,000.

Q. Who is the gaining partner?

Solution: As Karan surrenders his full 5/25th share to Rohit, thus Rohit is a gaining partner only.
QUESTION: 3

Read the following information and answer the given questions:

Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Karan retires and surrenders 5/25th share in favour of Rohit. The goodwill of the firm is valued at 2 years’ purchase of Super Profit based on average profits of the last three years. The profits for the last three years are ₹50,000, ₹55,000 and ₹60,000, respectively. The normal profits for the similar firm are ₹30,000. Goodwill already appears in the books of the firm at ₹75,000.

Q. What value of existing goodwill will be transferred to Karan’s Capital Account?

Solution: Existing goodwill is shared among the partners in the old profit sharing ratio.
QUESTION: 4

Read the following information and answer the given questions:

Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6 respectively. Karan retires and surrenders 5/25th share in favour of Rohit. The goodwill of the firm is valued at 2 years’ purchase of Super Profit based on average profits of the last three years. The profits for the last three years are ₹50,000, ₹55,000 and ₹60,000, respectively. The normal profits for the similar firm are ₹30,000. Goodwill already appears in the books of the firm at ₹75,000.

Q. What is the value of new goodwill determined?

Solution: Actual Average Profit = 50,000 + 55,000 + 60,000 / 3 = ₹55,000

Normal Profit = ₹30,000Super Profit = Average Profit – Normal Profit

= ₹55,000 – ₹30,000

= ₹25,000

Firm’s Goodwill = ₹25,000 × 2 = ₹50,000

QUESTION: 5

Analyse the case given below and answer the questions that follow :

Alia, Karan and Shilpa were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Goodwill appeared in their books at the value of ₹60,000. Karan decided to retire from the firm. On the date of his retirement, goodwill of the firm was valued at ₹2,40,000. The new profit sharing ratio decided among Alia and Shilpa was 2 : 3. Give the answers to the questions given below:

Q. What amount of goodwill will be transferred to Karan’s Capital account?

Solution: The new goodwill is shared in the new profit sharing ratio
QUESTION: 6

Analyse the case given below and answer the questions that follow :

Alia, Karan and Shilpa were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Goodwill appeared in their books at the value of ₹60,000. Karan decided to retire from the firm. On the date of his retirement, goodwill of the firm was valued at ₹2,40,000. The new profit sharing ratio decided among Alia and Shilpa was 2 : 3. Give the answers to the questions given below:

Q. What is Alia’s gaining or sacrificing ratio:

Solution: Alia = 5 / 10 - 2 / 5 = -1 / 10(Sacrifice)
QUESTION: 7

Analyse the case given below and answer the questions that follow :

Alia, Karan and Shilpa were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Goodwill appeared in their books at the value of ₹60,000. Karan decided to retire from the firm. On the date of his retirement, goodwill of the firm was valued at ₹2,40,000. The new profit sharing ratio decided among Alia and Shilpa was 2 : 3. Give the answers to the questions given below:

Q. How much will be transferred to Karan’s Capital Account of the existing goodwill?

Solution: The existing goodwill will be transferred in the old profit sharing ratio.
QUESTION: 8

Analyse the case given below and answer the questions that follow :

Alia, Karan and Shilpa were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Goodwill appeared in their books at the value of ₹60,000. Karan decided to retire from the firm. On the date of his retirement, goodwill of the firm was valued at ₹2,40,000. The new profit sharing ratio decided among Alia and Shilpa was 2 : 3. Give the answers to the questions given below:

Q. What is Shilpa’s gaining or sacrificing ratio:

Solution: Shilpa = 3 / 5 - 2 / 10 = 4 / 10 (Gain)
QUESTION: 9

Read the following information and answer the given questions:

Parth, Angad and Leesha are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Angad retires and his claim, including his capital and entitlements from the firm including his share of Goodwill of the firm, is ₹50,000.

After this amount was determined, it was found that there was an unrecorded piece of furniture valued at ₹12,000 which had to be recorded. Upon recording this piece of furniture, the revised amount due to Angad was determined and settled by giving him this piece of furniture and the balance in cash.

Q. What will be the final amount of the claim to be paid to Angad?

Solution: Angad’s Share = ₹50,000 + ₹4,000 (profit on revaluation)

= ₹54,000

QUESTION: 10

Read the following information and answer the given questions:

Parth, Angad and Leesha are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Angad retires and his claim, including his capital and entitlements from the firm including his share of Goodwill of the firm, is ₹50,000.

After this amount was determined, it was found that there was an unrecorded piece of furniture valued at ₹12,000 which had to be recorded. Upon recording this piece of furniture, the revised amount due to Angad was determined and settled by giving him this piece of furniture and the balance in cash.

Q. What is the profit on revaluation?

Solution: As there are no other things to be entered in the Revaluation Account, thus, profit on revaluation will be ₹12,000.
QUESTION: 11

Read the following information and answer the given questions:

Parth, Angad and Leesha are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Angad retires and his claim, including his capital and entitlements from the firm including his share of Goodwill of the firm, is ₹50,000.

After this amount was determined, it was found that there was an unrecorded piece of furniture valued at ₹12,000 which had to be recorded. Upon recording this piece of furniture, the revised amount due to Angad was determined and settled by giving him this piece of furniture and the balance in cash.

Q. To which account will the unrecorded piece of furniture be adjusted?

Solution: Unrecorded piece of furniture be adjusted in a revaluation account because assets are increasing.
QUESTION: 12

Read the following information and answer the given questions:

Parth, Angad and Leesha are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Angad retires and his claim, including his capital and entitlements from the firm including his share of Goodwill of the firm, is ₹50,000.

After this amount was determined, it was found that there was an unrecorded piece of furniture valued at ₹12,000 which had to be recorded. Upon recording this piece of furniture, the revised amount due to Angad was determined and settled by giving him this piece of furniture and the balance in cash.

Q. What will be the share of Angad in profit on revaluation?

Solution: Angad’s Share = ₹12000× 2 / 6 = ₹ 4,000
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