The document Retirement/Death of a Partner (Part - 1) Commerce Notes | EduRev is a part of the Commerce Course TS Grewal Solutions - Class 12 Accountancy.

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**Page No 6.77:**

**Question 1: A, B and C were partners sharing profits in the ratio of 1/2, 2/5 and 1/10. Find the new ratio of the remaining partners if C retires.****ANSWER:**

As we can see, no information is given as to how A and B are acquiring C's profit share after his retirement, so the new profit sharing ratio between A and B is calculated just by crossing out the Câ€™s share. That is, the new ratio becomes 5 : 4.

âˆ´ New Profit Ratio (A and B) = 5 : 4

**Page No 6.77:**

**Question 2: From the following particulars, calculate new profit-sharing ratio of the partners:****(a) Shiv, Mohan and Hari were partners in a firm sharing profits in the ratio of 5 : 5 : 4. Mohan retired and his share was divided equally between Shiv and Hari.****(b) P, Q and R were partners sharing profits in the ratio of 5 : 4 : 1. P retires from the firm.****ANSWER:**

(b) Old Ratio (P, Q and R) = 5 : 4 : 1

Pâ€™s Profit Share =

As we can see, no information is given as to how Q and R are acquiring P's profit share after his retirement, so the new profit sharing ratio between Q and R is calculated just by crossing out the Pâ€™s share. That is, the new ratio becomes 4 : 1

âˆ´ New Profit Ratio (Q and R) = 4 : 1

**Page No 6.77:**

**Question 3: R, S and M are partners sharing profits in the ratio of 2/5, 2/5 and 1/5. M decides to retire from the business and his share is taken by R and S in the ratio of 1 : 2. Calculate the new profit-sharing ratio.****ANSWER:**

**Page No 6.77:**

**Question 4: A, B and C were partners sharing profits in the ratio of 4 : 3 : 2. A retires, assuming B and C will share profits in the ratio of 2 : 1. Determine the gaining ratio.****ANSWER:**

Old Ratio (A, B and C) = 4 : 3 : 2

New Ratio (B and C) = 2 : 1

**Page No 6.77:**

**Question 5: X, Y and Z are partners sharing profits in the ratio of 1/2, 3/10, and 1/5. Calculate the gaining ratio of remaining partners when Y retires from the firm.****ANSWER:**

**Page No 6.77:**

**Question 6: (a) W, X, Y and Z are partners sharing profits and losses in the ratio of 1/3, 1/6, 1/3 and 1/6 respectively. Y retires and W, X and Z decide to share the profits and losses equally in future.****Calculate gaining ratio.****(b) A, B and C are partners sharing profits and losses in the ratio of 4 : 3 : 2. C retires from the business. A is acquiring 4/9 of C's share and balance is acquired by B. Calculate the new profit-sharing ratio and gaining ratio.****ANSWER:**

**Page No 6.78:**

**Question 7: Kumar, Lakshya, Manoj and Naresh are partners sharing profits in the ratio of 3 : 2 : 1 : 4. Kumar retires and his share is acquired by Lakshya and Manoj in the ratio of 3 : 2. Calculate new profit-sharing ratio and gaining ratio of the remaining partners.****ANSWER:**

**Page No 6.78:**

**Question 8: A, B, and C were partners in a firm sharing profits in the ratio of 8 : 4 : 3. B retires and his share is taken up equally by A and C. Find the new profit-sharing ratio.****ANSWER:**

**Page No 6.78:**

**Question 9: A, B, and C are partners sharing profits in the ratio of 5 : 3 : 2. C retires and his share is taken by A. Calculate new profit-sharing ratio of A and B.****ANSWER:**

**Page No 6.78:**

**Question 10: P, Q and R are partners sharing profits in the ratio of 7 : 5 : 3. P retires and it is decided that profit-sharing ratio between Q and R will be same as existing between P and Q. Calculate New profit-sharing ratio and Gaining Ratio.****ANSWER:**

**Page No 6.78:**

**Question 11: Murli, Naveen and Omprakash are partners sharing profits in the ratio of 3/8, 1/2 and 1/8. Murli retires and surrenders 2/3rd of his share in favour of Naveen and remaining share in favour of Omprakash. Calculate new profit-sharing ratio and gaining ratio of the remaining partners.****ANSWER:**

**Page No 6.78:**

**Question 12: A, B and C are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. B decides to retire from the firm. Calculate new profit-sharing ratio of A and C in the following circumstances:****(a) If B gives his share to A and C in the original ratio of A and C.****(b) If B gives his share to A and C in equal proportion.****(c) If B gives his share to A and C in the ratio of 3 : 1.****(d) If B gives his share to A only.****ANSWER:**

**Page No 6.78:**

**Question 13: L, M and O are partners sharing profits and losses in the ratio of 4 : 3 : 2. M retires and the goodwill is valued at â‚¹ 72,000. Calculate M's share of goodwill and pass the Journal entry for Goodwill. L and O decided to share the future profits and losses in the ratio of 5 : 3.****ANSWER:**

**Page No 6.78:**

**Question 14: P, Q, R and S were partners in a firm sharing profits in the ratio of 5 : 3 : 1 : 1. On 1st January, 2019, S retired from the firm. On S's retirement, goodwill of the firm was valued at â‚¹ 4,20,000. New profit-sharing ratio among 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.****ANSWER:**

**Page No 6.78:**

**Question 15: Aparna, Manisha and Sonia are partners sharing profits in the ratio of 3 : 2 : 1. Manisha retired and goodwill of the firm is valued at â‚¹ 1,80,000. Aparna and Sonia decided to share future profits in the ratio of 3 : 2. Pass necessary Journal entries.****ANSWER:**

**Page No 6.78:**

**Question 16: A, B and C are partners sharing profits in the ratio of 3 : 2 : 1. B retired and the new profit-sharing ratio between A and C was 2 : 1. On B's retirement, the goodwill of the firm was valued at â‚¹ 90,000. Pass necessary Journal entry for the treatment of goodwill on B's retirement.****ANSWER:**

**Page No 6.79:**

**Question 17: Hanny, Pammy and Sunny are partners sharing profits in the ratio of 3 : 2 : 1. Goodwill is appearing in the books at a value of â‚¹ 60,000. Pammy retires and at the time of Pammy's retirement, goodwill is valued at â‚¹ 84,000. Hanny and Sunny decided to share future profits in the ratio of 2 : 1. Record the necessary Journal entries. ****ANSWER:**

Working Notes:**WN1:** Calculation of Pammyâ€™s Share in Goodwill

Pammy's share=Firm's GoodwillÃ—Pammy's Profit Share

Pammy's share=84,000Ã—2/6=28,000 (to be borne by gaining partners in gaining ratio)**WN2:** Calculation of Gaining Ratio

Gaining Ratio = New Ratio âˆ’ Old Ratio

Gaining Ratio=1:1

**Page No 6.79:**

**Question 18: X, Y and Z are partners sharing profits in the ratio of 3 : 2 : 1. Goodwill is appearing in the books at a value of â‚¹ 60,000. Y retires and at the time of Y's retirement, goodwill is valued at â‚¹ 84,000. X and Z decided to share future profits in the ratio of 2 : 1. Pass the necessary Journal entries through Goodwill Account.****ANSWER: ****Working Notes:****WN1: **Calculation of Gaining Ratio

X :Y :Z=3:2:1(Old ratio)

X :Z = 2:1(New ratio)

Gaining Ratio = New Ratio - Old Ratio

X:Z=1:1**WN2:** Calculation of Retiring Partnerâ€™s Share of Goodwill

**Question 19: A, B and C are partners sharing profits in the ratio of 4/9 : 3/9 : 2/9. B retires and his capital after making adjustments for reserves and gain (profit) on revaluation stands at â‚¹ 1,39,200. A and C agreed to pay him â‚¹ 1,50,000 in full settlement of his claim. Record necessary Journal entry for adjustment of goodwill if the new profit-sharing ratio is decided at 5 : 3.ANSWER:**

**Working Notes **

i. Calculation of Bâ€™s share of goodwill

A, B and C are sharing profits in ratio 4/9 : 3/9 : 2/9

B retires from the firm. Remaining partners agreed to pay him Rs 1,50,000

Bâ€™s capital after making necessary adjustments Rs 1,39,200

Therefore, Hidden Goodwill is Rs (1,50,000 â€“ 1,39,200) i.e. Rs 10,800

ii Gaining Ratio

New profit sharing ratio between A and B is 5:3

Thus, Bâ€™s share of goodwill will be brought in by A and C in the gaining ratio 13:11 i.e.

**Question 20: M, N and O are partners in a firm sharing profits in the ratio of 3 : 2 : 1. Goodwill has been valued at â‚¹ 60,000. On N's retirement, M and O agree to share profits equally. Pass the necessary Journal entry for treatment of N's share of goodwill.ANSWER:**

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