Accountancy

Chapter 5- Retirement & Death of a Partner

CASE/SOURCE BASED QUESTIONS
CASE 1 P and Q and R are partners in a firm sharing Profit in the Ratio of 2:2:1. Their capitals
were 1,50,000; 100,000 and 50,000 respectively.
Plant 140,000; Stock 90,000; Patents 18250; Cash 30750; Debtors 80,000
And provision for doubtful debt 4000 ;Creditors 55000 .R retires on the this date and P,Q
decided to share future profit and losses in the Ratio of 3:2
On the basis of above case .Give the answer of following questions.
Q.1 Stock to be reduced by Rs 82000 the new amount will shown in
(A) Debit side of revaluation A/C 8000
(B) Credit side of revaluation A/C 90000
(C) Credit side of partners capital A/C 8000
(D) None of the above
Q.2 If Patents are valueless then what will be the new amount of
patent (A)18,250
(B) zero
(C) Both amount to be consider
(D) None of the above

Q.3 Profit or loss on Revaluation A/c Transferred to

(A)Rs 60,000 Profit
(B) Rs 60,000 loss
(c) Rs 90,000 Profit
(D) Rs 90,000 loss
Q.4 How will you treat an amount of Rs 20,000 had to be paid to an employee injured in
accident?
(A) Bank a/c Credit side Of revaluation a/c
(B) Bank a/c Debit side Of revaluation a/c
(C) Bank a/c Credit side Of realization a/c a/c
(D) Bank a/c Debit side Of Realization a/c
CASE 2 P,Q,R are partners sharing profit in the ratio of 5:3:2 Q retires and new Profit sharing ratio
Between P and R agreed at 2:3.They also decided to record the effect of the following
without affect their book values:
General Reserve 120,000
Contingency reserve 70,000
Profit and Loss(Dr) 30,000
Advertisement suspense a/c 10,000
On the basis of above data give the answer of following questions
Q5 Calculate Sacrificing Ratio of P
(A) 1/20
(B) 1/10
(C) 2/10
(D) 2/15
Q 6 Contingency reserve will be
(A) Added to General reserve
(B) Subtracted to General Reserve
(C) Added to Advertisement Expenses
(D) No effect

KVS ZIET BHUBANESWAR 12/10/2021 Page 1

 Q 7 What will be single Adjusting Entry
(A) R’s capital A/cDr. 60,000
To Q’s capital a/c 45,000
To P’s capital A/c 15,000
(B) Q’s capital A/cDr. 80,000
To R’s capital a/c 45,000
To A’s capital A/c 35,000
(C) R’s capital A/cDr. 60,000
To P’s capital a/c 45,000
To Q’s capital A/c 15,000
(D) P’s capital A/cDr. 80,000
To Q’s capital a/c 45,000
To R’s capital A/c 35,000
Q 8 What will be the net effect:
(A) 140,000
(B) 130,000
(C) 150,000
(D) 200,000
CASE 3 Analyse the case given below and answer the questions that follow:
A, K and S were partners in a firm sharing profits in the ratio of 5: 3: 2. Goodwill
appeared in their books at the value of Rs 60,000. ‘K’ decided to retire from the firm. On
the date of his retirement, goodwill of the firm was valued at Rs2,40,000. The new profit
sharing ratio decided among A and S was 2 : 3.

Q9 How much will be transferred to K’s Capital Account of the existing goodwill?

(A) Rs 18,000
(B) Rs30,000
(C) Rs 12,000
(D) Rs 72,000

Q 10
What is A’s gaining or sacrificing ratio:

A) 1/10 Gain B) 1/10 Sacrifice C) 4/10 Gain (D) 4/10 Sacrifice

Q 11 What amount of goodwill will be transferred to K’s capital account as compensated by A

and S?

(A) Rs96,000 (B) Rs 72,000 (C) Rs 24,000 (D) Rs18,000

CASE 4 Analyse the case given below and answer the questions that follow:
Rohit, Karan and Karim are partners sharing profits and losses in the ratio of 14 : 5 : 6
respectively. Karan retires and surrenders his entire 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 last three years. The profits for the last three years are Rs50,000, Rs 55,000 and Rs
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.

KVS ZIET BHUBANESWAR 12/10/2021 Page 2

Q 12 Who is the gaining partner on retirement of Karan?

(A) Rohit
(B) Karim
(C) Both (A) and (B)
(D) Neither (A) nor (B)

Q 13 What is the value of goodwill determined by using super- profit method?

(A) Rs50,000 (B) Rs 10,000 (C) Rs 30,000 (D) Rs 75,000

Q 14 In which ratio, existing goodwill of Rs 75000 be written off :

(A) 14:5:6
(B) New ratio, after Karan retirement
(C) In gaining ratio
(D) None of these.
 ANSWER KEY
Q.1 (A) Debit side of revaluation A/C 8000

Q.2 (A)18,250

(B) Rs 60,000 loss

Q.3

Q.4 (A) Bank a/c Debit side Of revaluation a/c

Q5 (A) 1/10

Q6 (A) Added to General reserve

Q7 (A) R’s capital A/cDr. 60,000

To Q’s capital a/c 45,000
To P’s capital A/c 15,000

Q8 (A) 150,000

Q9 A
Q 10 B
Q 11 B
Q 12 A
Q 13 A
Q 14 A

PREPARED BY THE PGTs ( COMMERCE ) OF BHUBANESWAR, GUWAHATI,

KOLKATA, RANCHI, SILCHAR AND TINSUKIA REGIONS.

KVS ZIET BHUBANESWAR 12/10/2021 Page 4