Ch: Death of a Partner

2 Marks
Q1 X, Y and Z were partners sharing profits and losses in the ratio of 3:2:1. X died on 1 st
April, 2021 His share is taken by Y and Z equally. Calculate the new profit-sharing
ratio.

Q2 Jayant, Kartik and Leena were partners in a firm sharing profits and losses in the
ratio of 5:2:3. Kartik died and Jayant and Leena decided to continue the business.
Their gaining ratio was 2:3. Calculate the new profit-sharing ratio of Jayant and
Leena.

Q3 Riyansh, Garv and Kavleen were partners in a firm sharing profits and losses in the
ratio of 8:7:5. On 2nd November, 2018, Kavleen died. Kavleen's share of profits till
the date of her death was calculated at Rs 9,375. Pass the necessary Journal entry.

Q4 Dinkar, Navita and Vani were partners sharing profits and losses in the ratio of
3:2:1. Navita died on 30th June, 2021. Her share of profit for the intervening period
was based on the sales during that period, which were Rs 6,00,000. The rate of
profit during the past four years had been 10% on sales. The firm closes its books
on 31st March every year.
Calculate Navita's share of profit and pass the necessary Journal entry for it in the
books of the firm.

Q5 Lokesh, Mansoor and Nihal were partners in a firm whose books are closed on 31st
March each year. Lokesh died on 30th June, 2021 and according to the agreement,
the share of profits of a deceased partner up to the date of the death is to be
calculated on the basis of the average profit for the last five years. Net profits for
the last 5 years have been 2017: Rs 14,000; 2018: Rs 18,000; 2019: Rs 16,000; 2020:
Rs 10,000 (Loss) and 2021: Rs 16,000. Determine Lokesh's share of the profits up to
the date of death and pass necessary Journal entry.

Q6 Ganesh, Harish and Anil were partners sharing profits in the ratio of 3:3:4. Ganesh
died on 30th June, 2021. Ganesh’s share of profit or loss till the date of death was to
be estimated on the basis of sales. Sales for the year ended 31st March, 2021 was
10,00,000 and that from 1st April, to 30th June, 2021 was 3,75,000. Profit for the
year ended 31st March, 2021 was Rs 2,50,000. Calculate Ganesh’s share of profit or
loss up to the date of death.

Q7 A, B and C were partners sharing profits and losses in the ratio of 3:2:1. B died on
30th June, 2021. The profit from 1st April, 2021 to 30th June, 2021 was estimated Rs
45,000. A and C decided to share future profits in the ratio of 3:2 with effect from
1st July, 2021. Pass the necessary Journal entry to record the B’s share of profit to
the date of death.
Q8 Manoj, Hari and Jitin were partners sharing profits in the ratio of 5:3:2. Hari died on
31st July, 2021. On the date of death, profit for the period was estimated at Rs
75,000 based on average of previous years’ profits of five years. Manoj and Jitin
decided to share profits equally w.e.f. 1st April, 2022. Pass the Journal entry or
entries to record Hari’s share of profit till the date of death.

Q9 Seeta, Reeta and Geeta were partners in a firm sharing profits in the ratio of 5:3:2.
Seeta died and new profit-sharing ratio of Reeta and Geeta was agreed to be equal.
On Seeta’s death, goodwill of the firm was valued at Rs 50,000.
Calculate the gaining ratio and pass the necessary Journal entry on Seeta’s death
for the treatment of goodwill.

Q10 Monika, Sonika and Manisha were partners sharing profits in the ratio of 4:3:1. It is
provided in the Partnership Deed that on the death of a partner, her share of
goodwill is to be valued at half of the profits credited to her account during the
previous four completed years. Sonika died on 1st April, 2021. The firm’s
profits/losses for the last four years ending on 31st March, were 2018: Rs 1,20,000;
2019: Rs 360,000; 2020 Rs 20,000 (Loss); 2021: Rs 80,000.
a) Determine the amount that is to be credited to Sonika’s Capital Account as
her share of goodwill.
b) Pass the Journal entry for adjustment of goodwill assuming that profit-
sharing ratio between Monika and Manisha in future will be 3:2.
Give the working.

3 Marks

Q11 A, B and C were partners in a firm sharing profits in ratio of 3:2:1. The firm closes its
books on 31st March every year. B died on 30th June, 2021. On B’s death goodwill of
the firm was valued at Rs 60,000. On B’s death his share in the profit of the firm till
the time of his death was to be calculated on the basis of previous year’s profit
which was Rs 1,50,000. Calculated B’s share in the profit of the firm.
Pass the necessary Journal entries for the treatment of goodwill and B’s share of
profit at the time of his death.

Q12 P, Q and R were partners in a firm sharing profits in the ratio of 2:2:1. The firm
closes its books on 31st March every year. P died three months after the last
accounts were prepared. On that date, the goodwill of the firm was valued at Rs
90,000. On the death of a partner, his share of profit in the year of death was to be
calculated on the basis of the average profit of the last four years. The profits of last
four years were:
Year I II III IV
Profit (Loss) Rs 2,00,000 Rs 1,80,000 Rs 2,10,000 Rs (1,70,000)
Pass the necessary Journal entries for treatment of goodwill and P’s share of profit
on his death. Show the calculation of P’s share of profit.
Q13 Ram, Ghanshyam and Vrinda were partners in a firm sharing profits in the ratio of
4:3:1. The firm closes its books on 31st March every year. On 1st February, 2017,
Ghanshyam died and it was decided that the new profit-sharing ratio between Ram
and Vrinda will be equal. The Partnership Deed provided for the following on the
death of a partner:
a) His share of goodwill be calculated on the basis of half of the profits credited
to his account during the previous four completed years.
The firm’s profits for the last four years were:
2012-13— Rs 1,20,000, 2013–14—Rs 80,000, 2014–15—Rs 40,000, and 2015-
16—Rs 80,000.
b) His share of profit in the year of his death was to be computed on the basis of
average profit of past two years.
Pass necessary Journal entries relating to goodwill and profit to be transferred to
Ghanshyam’s Capital Account. Also show your workings clearly.

Q14 Kumar, Verma and Naresh were partners in a firm sharing profits and losses in the
ratio of 3: 2:2. On 23rd January, 2015. Verma died. Verma's share of profit till the
date of his death was calculated at Rs 2,350. Pass necessary Journal entry for the
same in the books of the firm.

Q15 Q.4. X, Y and Z were partners sharing profits and losses in the ratio of 3: 2:1. Z died
on 30th June, 2021. His share of profit was to be calculated on the basis of average
profit of last three years. Profits for the year ending 31st March, 2019, 2020 and
2021 were Rs 80,000; Rs 61,000 and Rs 75,000 respectively. Calculate Z's where of
profit. Pass necessary Journal entry also.

Q16 Amit, Bunty and Charan were partners sharing profits in the ratio of 2:2:1. Amit
died on 30th June, 2021. Sales and profit for the year ended 31st March, 2021 were
2,00,000 and 50,000 respectively. Sales up to 30th June, 2021 was 80,000. Calculate
Amit's share of profit. Pass necessary Journal entry.

Q17 Charu, Tara and Rakhi were partners in a firm sharing profits in the ratio of 2:1:2.
Charu died on 1st May, 2021 and the new profit-sharing ratio between Tara and
Rakhi was 4:11. On Charu's death goodwill of the firm was valued at 90,000.
Calculate gaining ratio and pass necessary Journal entry for the treatment of
goodwill on Charu's death.

Q18 P, R and S are in the partnership sharing profits in the ratio of 4:3 : 1. It is provided
in the Partnership Deed that on the death of any partner, his share of goodwill is to
be valued at half of the profits credited to his account during the previous three
completed years.
R died on 1st April. The firm's profits for the last four years were: - Rs 1,20,000; II-
Rs 1,00,000; III- Rs 1,30,000; IV- Rs 1,70,000.
 a) Determine the amount that should be credited to R in respect of his share of
goodwill.
b) Pass the necessary entry for adjustment of goodwill.

Q19 P, Q and R were partners in a firm sharing profit in 2:2:1 ratio. The firm closes its
books on 31st March every year. P died three months after the last accounts were
prepared. On that date, the goodwill of the firm was valued at 90,000. On the death
of a partner his share of profit in the year of death was to be calculated on the basis
of the average profit of the last four years. The profits of last four years were: I- Rs
2,00,000, II- Rs 1,80,000, III- Rs 2,10,000, IV- Rs 1,70,000 (Loss).
Pass the necessary Journal entries for the treatment of goodwill and P's share of
profit on his death. Show clearly the calculation of P's share of profits.

5 Marks
Q20 Juhi, Megha and Roshni were partners sharing profits and losses in the ratio of
5:3:2. Their Balance Sheet as at 31st March, 2021 is given below:
BALANCE SHEET
As at 31st March, 2021
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 1,40,000 Cash 50,000
Loan from Eisha 3,00,000 Stock 70,000
General Reserve 2,00,000 Debtors 1,20,000
Capital A/cs: Land and Building 6,00,000
Juhi 7,00,000 Machinery 4,00,000
Megha 2,00,000 Goodwill 4,00,000
Roshni 1,00,000
16,40,000 16,40,000
Juhi died on 30th June, 2021. Partnership Deed provides for the settlement of
claims on death of a partner in addition to her capital as under:
a) The share of profit of deceased partner to be computed up to the date of
death on the basis of average profit of the past three years which was
8,00,000.
b) Her share in profit/loss on revaluation of assets and reassessment of
liabilities which were as follows: Land and Buildings were revalued at
9,40,000, Machinery at Rs 3,80,000 and Stock at Rs 50,000. A provision of 5%
was to be created on debtors for Doubtful Debts.
c) Share of goodwill to be calculated on the basis of twice the average of past
three years' profits.
Prepare Revaluation Account and Juhi's Capital Account to be presented to her
executors.

Q21 Pranav, Karan and Rahim were partners in a firm sharing profits and losses in the
ratio of 2:2:1. On 31st March, 2017 their Balance Sheet was as follows:
 BALANCE SHEET OF PRANAV, KARAN AND RAHIM as on 31st March,2017
Liabilities Amount (Rs) Assets Amount (Rs)
Creditors 3,00,000 Fixed Assets 4,50,000
General Reserve 1,50,000 Stock 1,50,000
Capitals: Debtors 2,00,000
Pranav 2,00,000 Bank 1,50,000
Karan 2,00,000
Rahim 1,00,000
9,50,000 9,50,000
Karan died on 12th June, 2017. According to the Partnership Deed, the legal
representatives of the deceased partner were entitled to the following:
(i) Balance in his Capital Account.
(ii) Interest on Capital @ 12% p.a.
(iii) Share of goodwill. Goodwill of the firm on Karan’s death was valued at
60,000.
(iv) Share in the profit of the firm till the date of his death, calculated on the
basis of last year’s profit. The profit of the firm for the year ended 31 st
March, 2017 was 5,00,000.
Prepare Karan’s Capital Account to be presented to his representatives.

Q22 Pawan, Dheeraj and Anshu were partners sharing profits in the ratio of 2:2:1. Their
Balance Sheet as at 31st March, 2021 was as follows:
Liabilities Amount (Rs) Assets Amount (Rs)
Capital A/cs: Building 1,00,000
Pawan 1,00,000 Furniture and Fixtures 25,000
Dheeraj 50,000 Computers 15,000
Anshu 75,000 Goodwill 1,00,000
General Reserve 50,000 Debtors 25,000
Loan from Pawan 25,000 Stock 1,00,000
Creditors 1,75,000 Loan to Dheeraj 25,000
Advertisement Suspense 50,000
Cash in Hand 15,000
Cash at Bank 20,000
4,75,0000 4,75,000
st
Dheeraj died on 31 July, 2021. The Partnership Deed provided as follows in the
event of death of a partner:
a) Partner will get amount in the credit of his Capital and Loan Accounts while
Loan to Partner will be recovered from him.
b) Share of profit or loss up to the date of death will be estimated on last year’s
profit and his share in the profit will be paid while loss will be recovered from
his dues. Loss for the period was estimated as Rs 50,000.
c) Share of profit or loss on revaluation of assets and reassessment of liabilities
will be allowed or recovered from his dues. The assets were revalued as
 follows: Building Rs 50,000, Furniture and Fixtures Rs 10,000, Computers
5,000. Creditors payable were 1,60,000.
d) Goodwill was agreed to be nil in view of losses in the firm.
e) Amount due to the deceased partner was to be paid immediately. If any
amount was due from him, it will also be received immediately.
Prepare Revaluation Account and Capital Account of Dheeraj to be presented to the
Executors of his Will.

Q23 Akhil, Piyush and Harish were partners sharing profits in the ratio of 2:2:1. Their
Balance Sheet as at 31st March, 2021 was as follows:
BALANCE SHEET OF AKHIL, PIYUSH AND HARISH
As at 31st March, 2021
Liabilities Amount (Rs) Assets Amount
(Rs)
Capitals A/cs Building 5,00,000
Akhil 5,00,000 Furniture and Fixtures 25,000
Piyush 5,00,000 Computers 2,75,000
Harish 2,50,000 Goodwill 2,00,000
General Reserve 2,50,000 Debtors 3,50,000
Loan from Harish 25,000 Stock 2,00,000
Workmen Compensation 2,00,000 Profit & Loss A/c 2,50,000
Reserve Cash in Hand 25,000
Creditors 3,00,000 Cash at Bank 2,00,000
20,25,000 20,25,000
Harish died on 21st August, 2021. The Partnership Deed provided as follows in the
event of death of a partner:
(i) Partner will get amount in the credit of his Capital and Loan Accounts
while Loan to Partner will be recovered from him.
(ii) Share of profit or loss up to the date of death will be determined by
preparing financial statements for the period up to the date of death. The
financial statements were prepared, according to which profit of the firm
for the period was Rs 2,50,000.
(iii) Share of profit or loss on revaluation of asset and reassessment of
liabilities will be allowed or recovered from his dues. The assets were
revalued as follows: Building Rs 5,50,000, Computers Rs 2,50,000.
Creditors payable were Rs 2,70,000.
(iv) Goodwill of the firm was valued at Rs1,00,000.
(v) A claim for Workmen Compensation of Rs 1,00,000 is to be accounted.
(vi) Amount due to the deceased partner was to be paid in lump sum at the
end of the financial year.
Prepare Revaluation Account and Capital Accounts of the partners.

Q24 The Balance Sheet of A, B and C who were sharing profits in the ratio of 3:3:4 as at
31st March, 2019 was as follows:
 BALANCE SHEET OF A, B AND C as at 31st March, 2019
Liabilities Amount (Rs) Assets Amount (Rs)
General Reserve 40,000 Cash 4,000
Bills Payable 15,000 Stock 43,000
Loan from Bank 30,000 Investments 70,000
Capitals: Land and Buildings 1,58,000
A 60,000
B 90,000
C 40,000
2,75,000 2,75,000
st
A died-on 1 October, 2019. The partnership deed provided for the following on the
death of a partner:
a) Goodwill of the firm be valued at two years’ purchase of average profits for
the last three years.
b) The profit for the year ending 31st March, 2019 was Rs 50,000.
c) Interest on capital was to be provided @ 6% p.a.
d) The average profits of the last three years were Rs 35,000.
Prepare A’s Capital Account to be rendered to his executors.

Q25 Shirish, Harit and Asha were partners in a firm sharing profits in the ratio of 5:4:1.
Shirish died on 30th June, 2018. On this date their Balance Sheet was follows:
BALANCE SHEET OF SHIRISH, HARIT AND ASHA as at 31st March, 2018
Liabilities Amount Assets Amount
(Rs) (Rs)
Capitals: Plant and Machinery 5,60,000
Shirish 1,00,000 Stock 90,000
Harit 2,00,000 Debtors 10,000
Asha 3,00,000 Cash 40,000
Profits for the year 2017-18 80,000
Bills Payable 20,000
7,00,000 7,00,000
According to the Partnership Deed, in addition to deceased partner’s capital, his
executor is entitled to:
a) Share in profits in the year of death on the basis of average of last two years’
profits. Profit for the year 2016-17 was Rs 60,000.
b) Goodwill of the firm was to be valued at 2 years’ purchase of average of last
two years’ profits.
Prepare Shirish’s Capital Account to be presented to his executor.