SUNIL PANDA COMMERCE CLASSES

BEFORE EXAM PRACTICE QUESTIONS FOR TERM 2 BOARDS

ACCOUNTS - RETIREMENT OF A PARTNER
Q.1) Surrender, Ramesh, Naresh and Mohan are partners in a firm sharing profit in the ratio
2:1:2:1. On the retirement of Naresh goodwill was valued at 72,000. Surrender, Ramesh and
Mohan decided to share future profits equally. Pass the journal entry for goodwill without
opening goodwill account. Show the working.
Q.2) M, N and G were partners in a firm sharing profits and losses in the ratio of 5:3:2. On
31-3-2016 their balance sheet was as under:
Balance sheet of M, N and G as on 31-3-2016

Liabilities Amount Assets Amount

Creditors 55,000 Cash 40,000
General reserve 30,000 Stock 50,000
Capital of Debtors 45,000
M 1,50,000 Less provision 5,000 40,000
N 1,25,000 Machinery 1,50,000
G 75,000 3,50,000
Patents 30,000
Building 1,00,000
Profit and loss account 25,000
4,35,000 4,35,000
M retired on the above date and it was agreed that:
a) Debtors of 2,000 will be written off as bad debts and a provision of 5% on debtors
for bad and doubtful debts will be maintained
b) Patents will be completely written off and stock, machinery and building will be
depreciated by 5%
c) An unrecorded creditors of10,000 will be taken into account
d) N and G will share the future profits in the ratio of 2:3
e) Goodwill of the firm on M retirement was valued at 3,00,000
Pass necessary journal entries for the above transaction in the books of the firm on M
retirement.
Q.3) Shivam , Kapil and Deepak are partners sharing profits in the ratio of 3:1:2. On 31-3-
2022, Kapil retired and his capital account after adjustment or reserve and profit on
revaluation was 3,50,000. Shivam and Deepak paid him 4,20,000 in settlement of his claim.
To settle his account a computer of 4,20,000 was given to kapil. Pass the necessary journal
entries in the books of the firm.
Q.4) Asha, Naveen and Shalini were partners in a firm sharing profit in the ratio of 5:3:2.
Goodwill appeared in the book at a value of 80,000 and General reserve at 40,000. Naveen
decided to retire form the firm. On the date of his retirement goodwill of the firm was
valued at 1,20,000. The new profit-sharing ratio decided among Asha and Shalini is 2:3.
Record necessary journal entries on Naveen retirement.

Q.5) A, B and C are partners sharing profit and losses in the ratio of 4:3:3. Their balance
sheet as at 31-3-2022 is

Liabilities Amount Assets Amount

Creditors 7,000 Land and building 36,000
Bill payables 3,000 Plant and machinery 28,000
General reserve 20,000 Computer printer 8,000
Capital a/c Stock 20,000
A 32,000 Sundry debtors
B 24,000 14,000 12,000
C 20,000 76,000 Less PFDD
2,000
Bank 2,000
1,06,000 1,06,000
On 1st April 2022, B retired from the firm on the following terms:
a) Goodwill of the firm is to be valued at 14,000
b) Stock, land and building are to be appreciated by 10%
c) Plant and machinery and computers printer are to be reduced by 10%
d) Sundry debtors are considered to be good
e) Provision for legal charges to be made at 2,000
f) Amount payables to Bis to be maintained to his loan account
Prepare Revaluation account, Partner’s capital account and the Balance sheet of A and C
after B’s retirement.