Micheal Vaz solutions for Book Keeping and Accountancy [English] 12 Standard HSC Maharashtra State Board chapter 4 - Reconstitution of Partnership (Retirement of Partnership) [Latest edition]

Answer in one sentence only.
Who is a retiring partner?

Answer in one sentence only.
What is gaining ratio?

Answer in one sentence only.
How would you treat General Reserve on retirement of a partner?

Answer in one sentence only.
How is amount due to a retiring partner settled?

Answer in one sentence only.
How would you adjust retiring partner’s share of goodwill without opening goodwill account?

Answer in one sentence only.
When is the gaining ratio to be calculated?

Write the term / word / phrase which can substitute the following statement :
The account which shows revaluation of assets and liabilities.

Write the term / word / phrase which can substitute the following statement :
Debit balance of revaluation account.

Write the term / word / phrase which can substitute the following statement :
The proportion in which the continuing partners benefit due to retirement of partner.

Write the term / word / phrase which can substitute the following statement :
Excess of actual capital over proportionate capital.

Write the term / word / phrase which can substitute the following statement :
The method under which amount payable to the retiring partner is paid off at a time.

Write the term / word / phrase which can substitute the following statement :
Capital account of a retiring partner always shows balance.

Select the most appropriate answer from the alternatives given below :

X, Y, and Z are partners sharing profits in the ratio of 5:3:2. If Y retires then new ratio will be ___________.

Himanshu, Gagan and Naman are partners sharing profits and losses in the ratio of 3:2:1. On March 31, 2017, Naman retires.
The various assets and liabilities of the firm on the date were as follows:
Cash Rs 10,000, Building Rs 1,00,000, Plant and Machinery Rs 40,000, Stock Rs 20,000, Debtors Rs 20,000 and Investments Rs 30,000.
The following was agreed upon between the partners on Naman’s retirement:
(i) Building to be appreciated by 20%.
(ii) Plant and Machinery to be depreciated by 10%.
(iii) A provision of 5% on debtors to be created for bad and doubtful debts.
(iv) Stock was to be valued at Rs 18,000 and Investment at Rs 35,000.
Record the necessary journal entries to the above effect and prepare the Revaluation Account.

Select the most appropriate answer from the alternatives given below :

When goodwill is raised at its full value and it is written off __________ account is to be credited.

Select the most appropriate answer from the alternatives given below :

Increase in the value of assets should be ___________ to profit and loss adjustment account.

Select the most appropriate answer from the alternatives given below :

If the goodwill is raised to the extent of retiring partners share ___________ account is to be debited.

State whether the following statements is true or false :

Gaining ratio means old ratio minus new ratio.

State whether the following statements is true or false :

Retiring partner’s share in profit up to the date of his retirement will be debited to profit and loss suspense account.

State whether the following statements is true or false :

Amount due to a retiring partner if not paid, appears as his loan in the books of the firm.

State whether the following statements is true or false :

Revaluation account is also called Realisation account.

State whether the following statements is true or false :

Retirement of a partner leads to dissolution of the firm unless otherwise agreed upon.

State whether the following statements is true or false :

Profit on revaluation account is transferred to continuing partners’ capital account only.

Sanil, Nitish, Sapna were partners in a firm sharing profits and losses in the proportion of 1/2, 1/3 and 1/6 respectively. Their Balance Sheet as on 31^st March, 2012 was as follows:

              Balance Sheet as on 31-03-2012

Sapna decided to retire on 1^st April 2012 on following terms:-

1) Goodwill of the firm will be valued at Rs 30,000/-

2) Furniture was taken over by Sanil for Rs 4,700/-

3) Make a provision for unpaid expenses Rs 1,700/-

4) Out of the amount due to Sapna Rs 7,500/- to be paid by cheque and the remaining amount to be transferred to her loan account.

Pai, Amba and Manoj are partners in a firm sharing profit and losses in the proportion to their capitals. Their Balance Sheet as on 31.3.2012 is as follow: 

        Balance Sheet as on 31^st March, 2012

On the above date Pai retired and the following adjustments have been agreed upon

1) Goodwill was revalued at Rs 15,000

2) Assets and Liabilities were revalued as under debtors Rs 17,000 stock at 90% of book value Building Rs 35,000 Plant Rs 11,500 Motor Van Rs 29, 500, Outstanding expenses Rs 18,000

3) Amba and Manoj contributed additional capital of Rs 20,000 and Rs 10,000 respectively

4) Balance due to Mr. Pai is transferred to his loan account after paying him Rs 1,000/-

Prepare:- Profit and Loss adjustment A/c,. Partner’s Capital A/c’s and Balance Sheet of new firm

Shailesh, Anil and Das were partners sharing profits and losses in the ratio at 3:3:2. Their Balance Sheet as on 31.3.2012 is as below:

             Balance Sheet as on 31^st March, 2012

In 1^st April, 2012 Mr. Das retired from the firm on following terms:

1) Shailesh and Anil’s share in reserve fund should be continued in new firm.

2) Goodwill of the firm is to be valued at Rs 4,000 however only Das’s share in it is to be raised in the books and written off immediately

3) Assets to be revalued as under stock Rs 6,300 machinery Rs 10,000 furniture Rs 10,200

4) R.D.D. to be maintained at 10% on debtors

5) Rs 100 to be written off from creditors

6) The amount payable to Mr. Das is to be transferred to his loan account

Prepare:- Profit and Loss adjustment A/c, Partners capital A/c and Balance Sheet of New firm on 1/04/2012

Shedge, Mayekar and Raut were partners sharing profits and losses in the ratio of 4: 3: 3.
Their Balance Sheet on 31^st March 2012 was as given below:-

             Balance Sheet as on 31^st March, 2012

Raut retired from the business on above date and it was agreed that the amount due to Raut to be paid immediately by availing overdraft facility

1) His share of goodwill was raised at Rs 3,500

2) Revalue furniture Rs 4,000 and stock Rs 16,000

3) Create R.D.D. at 5% on Debtors.

4) Make provision for outstanding printing bill Rs 6,000. Prepare profit and loss adjustment A/c, Capital A/c and Balance Sheet of continuing partners assuming that goodwill is written off by the continuing partners.

Sathe, Deshpande and Madlani were partners sharing profits and losses in the ratio of 5:2:3. Their Balance Sheet was as follows:

             Balance Sheet as on 31^st March, 2012

Deshpande retired on that date on the following terms:

1) Plant to be depreciated by 10% and Motor Van by 20%.

2) Stock to be appreciated by 10% and building by 20%.

3) R.D.D. is no longer necessary

4) Provision is to be made for Rs 8,000 being compensation to worker

5) The goodwill of the firm to be valued at Rs 40,000 and Deshpande’s share in it should be raised.

6) Both the remaining partners decided to write off the goodwill

7) Amount payable to Shri. Deshpande to be kept as his Loan

Prepare:

1 ) Profit and Loss Adjustment Account

2) Partner’s Capital Accounts

3) New Balance Sheet