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Question
Write the word/phrase/term/ which can substitute of the following statement:
The ratio which is obtained by deducting the Old Ratio from New Ratio.
Solution
The ratio which is obtained by deducting the Old Ratio from New Ratio. - Gain Ratio.
Explanation:
The ratio in which the continuing partners acquire the retiring partner’s share is called gain ratio. It is normally used to write off goodwill created or raised to the extent of retiring partner’s share only.
Gain Ratio = New Ratio - Old Ratio
RELATED QUESTIONS
Select the most appropriate answer from the alternatives given below:
Gaining ratio is the ratio in which ______.
Apte, Bhate and Chitale are sharing `1/2, 3/10, "and" 1/5` if Apte retire their new ratio will be ______.
State whether the following statement is true or false with reason.
Gain ratio means New ratio minus Old ratio.
State whether the following statement is true or false with reason.
Retiring partner is called an outgoing partner.
State whether the following statement is true or false with reason.
On retirement of a partner, a sacrifice ratio is considered.
New Ratio (less) _________ = Gain ratio
A proportion in which the continuing partners get the share of retiring partner is known as ________ ratio.
What is meant by Retirement of a Partner?
What is Benefit Ratio?
What is New Ratio?
How is Gain Ratio calculated?
New Ratio (less) ______ = Gain ratio.
New Ratio (less) ____ = Gain ratio
New Ratio (less) ______ = Gain ratio
Aman, Bankim and Chitra are partners of a firm sharing profit and loss in the 3 : 3 : 2 ratio. Their firm Balance Sheet as on 31st March, 2023 is as under :
| Balance Sheet as on 31st March, 2023 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Bills Payable | 8,050 | Cash | 18,900 | ||
| General Reserve | 14,000 | Debtors | 43,750 | ||
| Creditors | 30,100 | Investments | 42,000 | ||
| Capital Accounts: | Machinery | 30,450 | |||
| Aman | 42,000 | 1,19,000 | Furniture | 22,050 | |
| Bankim | 45,500 | Equipment | 14,000 | ||
| Chitra | 31,500 | ||||
| 1,71,150 | 1,71,150 | ||||
On 1st April 2023, Chitra retired from the firm on the following terms:
(1) Outstanding amount of retiring partner Chitra, be transferred to her loan account.
(2) Write off ₹ 1,750 as bad debts.
(3) ₹ 350 is now not payable to creditors.
(4) Assets are revalued as under:
| Furniture | ₹ 21,000 |
| Machinery | ₹ 28,000 |
| Equipments | ₹ 14,700 |
Pass necessary Journal entries in the books of firm.
Given below is a Balance Sheet of A, B and C who were partners in a firm sharing profits and losses in the ratio 5 : 3 : 2.
Their Balance Sheet as on 31st March, 2023 was as follows :
| Balance Sheet as on 31-03-2023 | |||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | 5,600 | Cash | 3,800 |
| Bank Overdraft | 4,850 | Debtors | 9,000 |
| Reserve Fund | 7,500 | Stock | 8,750 |
| Capital A/c | Machinery | 15,000 | |
| A | 21,000 | Land | 35,000 |
| B | 18,500 | Furniture | 2,500 |
| C | 16,600 | ||
| 74,050 | 74,050 | ||
On 1st April, 2023 C retired on the following terms:
(1) Goodwill of the Firm will be raised in the books at ₹ 10,000.
(2) Stock be reduced by 10% and Furniture by 5% and Machinery by 11 %.
(3) R.B.D.D. be maintained at 5% on debtors.
(4) ₹ 100 to be written off from Creditors.
(5) Out of the amount due to C, ₹ 2,500 to be paid by cash and remaining amount to be transferred to his loan account.
Prepare Profit and Loss Adjustment Account, Partner's Capital A/c, Balance Sheet of new firm.
New Ratio (less) ______ = Gain ratio
New ratio (less) ______ = Gain ratio
New Ratio (less) _____ = Gain ratio
New Ratio (less) ______ = Gain ratio
New Ratio (less) ______ = Gain ratio
New Ratio (less) ______ = Gain ratio.
New Ratio (less) _________ = Gain ratio
New Ratio (less) ______ = Gain ratio.
