Micheal Vaz solutions for Book Keeping and Accountancy [English] 12 Standard HSC Maharashtra State Board chapter 5 - Reconstitution of Partnership (Death of Partner) [Latest edition]

Answer in one Sentence :
What is gaining ratio or benefit ratio?

Answer in one Sentence :
How is gaining ratio calculated?

Answer in one Sentence :
When is gaining ratio required to be calculated?

Answer in one Sentence :
How would you treat general reserve on death of a partner?

Answer in one Sentence :
How much amount due to the deceased partner is calculated?

Answer in one Sentence :
How is amount due to deceased partner settled?

Answer in one Sentence :
How is the share of deceased partner in accrued profit calculated?

Answer in one Sentence :
How is a debit balance of profit and loss account dealt with on death of a partner?

Give a word / term / phrase which can substitute the following statements :
The account which shows revaluation of assets and liabilities.

Give a word / term / phrase which can substitute the following statements :
Excess of credit side over debit side of revaluation account.

Give a word / term / phrase which can substitute each of the following statements :
The method under which payment is made to retiring partner in instalment.

Give a word / term / phrase which can substitute the following statements :
Excess of proportionate at capital over actual capital.

Give a word / term / phrase which can substitute  the following statements :
The account to which deceased partners capital balance is transferred.

Give a word/term/phrase which can substitute the following statements :

The partner who died.

Give a word/term/phrase which can substitute the following statement:

A person who represents the deceased partner.

Select the most appropriate answer from the alternatives given below :

Gaining ratio is calculated on ___________.

Select the most appropriate answer from the alternatives given below:

Gaining ratio is the ratio in which ______.

Select the most appropriate answer from the alternatives given below:
Share of profit of a deceased partner till the date of death is _____________.

Select the most appropriate answer from the alternatives given below :

An amount received from the Insurance Company against the joint life policy is __________.

Select the most appropriate answer from the alternatives given below :

M.N.S. are partners in a firm having joint life policy of Rs 10,00,000 on which premium has been paid by a firm. M dies and his legal representatives want the whole amount of the policy where as N & S want to distribute the amount among all the partners.

State whether the following statements is true or false :

Retiring partner is entitled to his share of goodwill.

State whether the following statements is true or false :

Retiring partner is not entitled to his share of general reserve.

State whether the following statements is true or false :
The capital account of a retiring partner always shows a debit balance.

State whether the following statements is true or false :

An amount due to a deceased partner is transferred to his executor’s loan A/c.

State whether the following statements is true or false :

If goodwill is written off retiring partner’s capital account is debited.

State whether the following statements is true or false :

Death of a partner is like a compulsory retirement.

State whether the following statements is true or false :

Total amount due to deceased partner is paid in cash to executor immediately after his death.

State whether the following statements is true or false :

On the death of a partner, his share in the goodwill is divided equally among continuing partners.

State whether the following statements is true or false :

Deceased Partner’s share in profit up to the date of his death will be debited to his capital A/c.

Vilas, Mangal, Guru were partners in a business sharing profits and losses in the ratio of 2:1:1 respectively. Their Balance sheet as on 31^st March, 2012 was as follows: 

          Balance Sheet as on 31st March 2012

Guru died on 1^st July, 2012

1) Land and Building was to be revalued to Rs 7,000 and RDD was to be created of Rs 200.

2) The drawings of Guru upto the date of his death amounted to Rs 1,000/-

3) Charge interest on drawings Rs 100/-

4) His share of goodwill should be calculated at ‘Three’ years purchase of the profits for the last four years which were Rs 15,000, Rs 13,000/-, Rs 7,000, Rs 5,000

5) The deceased partners share of profit upto the date of his death to be calculated on the basis of average profit of last two years.

Prepare:

1) Profit and Loss Adjustment A/c

2) Partners Capital A/cs

3) Balance Sheet of the continuing firm

4) Give working or share of profit and goodwill

Sheetal, Anjali, Rajendra were sharing profits and losses as 7:5:4. Their Balance sheet as on 31^st March, 2011:

           Balance Sheet as on 31^st March 2012

Rajendra died on 30^th June 2012 and the following adjustments were agreed as per deed.

1) Furniture, Machinery and Building are to be revalued at Rs 16,700/-, Rs 16,200, to Rs 30,100.

2) Rajendra’s share is goodwill to be valued from firm’s goodwill which was valued at two times the average profit of last three years. Profits of last three years Rs 30,000, Rs 25,000, Rs 20,000/-.

3) His profit upto the date of death is to be calculated on the basis of last years profit.

4) Rajendra was entitled to get a salary of Rs 800/-per month.

5) Interest on capital at 10% be allowed.

6) Rajendra’s drawing upto date of death were Rs 600 p.m. 
Prepare:
1) Rajendra’s Capital A/c showing amount payable to his executor
2) Give working of share of goodwill and profit

The Balance sheet of Mohan, Subhash and Babi as on 31^st December, 2011 was as under. They were sharing profits and losses in the ratio of 2:1:1.

            Balance Sheet as on 31^st December,2011

Babi died on 1^st July, 2012 and partnership deed provided that in the event of death of the partner his executor will be entitled to be paid out.

1) Capital to the credit at the date of last balance sheet

2) Proportion of reserves

3) Proportion of goodwill to be calculated twice the average profits of last three years.

4) His proportion of profits to the date of death based on the average profits of the last three year plus 20%.

5) The net profits for last 3 years Rs 18,000, Rs 18,000, Rs 16,500.

6) Babi had withdrawn Rs 6,000/- to the date of her death.

7) The investments were sold at par and the amount was paid off to Babi’s executor and the balance was transferred to loan A/c.

Prepare: 
1) Babi’s Capital A/c only.

Minaxi, Ramesh and Poonam were partners sharing profits and losses in the proportion to their capitals, Their Balance sheet of the firm on 31^st March, 2012 was as under:

           Balance Sheet as on 31^st March, 2012

Poonam died on 1^st August, 2012 and the following adjustments were made

1) Assets revalued as under-Land & Building Rs 44,000, Investment Rs 18,000, Stock Rs 17,000.

2) All debtors were good.

3) Goodwill of the firm valued at two times the average profits of the last 4 years. No goodwill account to be shown in the books of the firm.

4) Poonam’s share of profit upto her death to be calculated on the basis of average profits of last two year.

5) Profits were Rs 6,000, Rs 12,000, Rs 7,000, Rs 11,000
Prepare:
1) Profits and loss adjustment A/c
2) Balance sheet as on 1^st August 2012

Vishnu, Prabhakar and Krishna were partners in a business sharing profits and losses in the ratio of 3:1:1 respectively. Their Balance Sheet as on 31^st March, 2012 was as follows:

         Balance Sheet as on 31^st March, 2012

Krishna died on 1^st October, 2012 and the partnership deed provided that:

1) The deceased partner to be given his share of profit to the date of death on the basis of the profits of the previous year.

2) His share of goodwill will be calculated on two years purchase of average profit of the last 4 years. The net profit for last 4 years were Rs 70,000, Rs 55,000, Rs 45,000, Rs 30,000

3) Plant and Machinery to be valued at Rs 40,000. Reserve for doubtful debts of Rs 2,000 to be created.

4) The drawings of Krishna upto the death amounted to Rs 20,000

5) Interest on capital at 10% p.a. is to be allowed and 6% p.a. to be charged on drawings. Both the interest should be calculated for 6 months. 
Prepare:
1) Krishna’s capital A/c and P/L Adjustment A/c