Question 3. The purpose of finding the gaining ratio is to bear the goodwill to be paid to the retiring partner.
Question 4. What is the journal entry to be passed to transfer the amount due to the deceased partner to the executor of the deceased partner?
Their balance sheet as of 31st anan retired on 31 st subject to the following conditions:
- Distribution of accumulated profits, reserves, and losses
- Revaluation of assets and liabilities
- Determination of new profit sharing ratio and gaining ratio
- Adjustment for goodwill
- Adjustment for current years profit or loss up to the date of retirement.
- Settlement of the amount due to the retiring partner
Question 3. What are the ways in which the final amount due to an outgoing partner can be settled? The amount due to the retiring partner may be settled in one of the following ways:
- Paying the entire amount due immediately in cash
- Transfer the entire amount due to the loan account of the partner
- Transfer the entire amount immediately in cash and transferring the balance to the loan account of the partner
Question 1. Dheena, Surya and Janaki are partners sharing profits and losses in the ratio of 5:3:2. On 31.3.2018, Dheena retired. On the date of retirement, the books of the firm showed a reserve fund of ? 50,000. Pass journal entry to transfer the reserve fund. Journal Entries
Question 2. Rosi, Rathi and Rani are partners of a firm sharing profits and losses equally. Rathi retired from the partnership on 1.1.2018. On that date, their balance sheet showed accumulated loss of ? 45,000 on the asset side of the balance sheet. Give the journal entry to distribute the accumulated loss.
Question 3. Akash, Mugesh and Sanjay are partners in a firm sharing profits and losses in the ratio of 3:2:1. Their balance sheet as on 31st is as follows: Pass journal entry to transfer accumulated Profit and prepare the capital account of the partners.
Question 4. Roja, Neela and Kanaga are partners sharing profits and losses in the ratio of 4:3:3. On 1st , Roja retires and on retirement, the following adjustments are agreed upon: (i) Increase the value of building by ? 30,000. (ii) Depreciate stock by ? 5,000 and furniture by ? 12,000. (iii) Provide an outstanding liability of ? 1,000 Pass journal entries and prepare revaluation account. Revaluation Account Journal Entries
Question 5. Vinoth, Karthi and Pranav are partners sharing profits and losses in the ratio of 2:2:1. Pranav retires from partnership on 1st . The following adjustments are to be made: (i) Increase the value of land and building by ? 18,000 (ii) Reduce the value of machinery by ? 15,000 (iii) A provision would also be made for outstanding expenses for ? 8,000. Give journal entries and prepare revaluation account. Revaluation Account
(i) Machinery is valued at ? 1,50,000 (ii) Value of furniture brought down by ? 10,000 (iii) Provision for doubtful debts should be increased to ? 5,000 (iv) Investment of ? 30,000 not recorded in the books is to be recorded now. Pass necessary journal entries and prepare revaluation account and capital account of partners Revaluation Account
Question 7. Kayal, Mala and Neela are partners sharing profits in the ratio of 2:2:1. Kayal retires and the new profit sharing ratio between Nila and Neela is 3:2. Calculate the gaining ratio. K : M : N > 2 : 2 : 1 (Old Ratio ) New Ratio = Mala: Neela = 3:2 GR = NR-OR Mala = \(\frac<3><5>-\frac<2><5>=\frac<3-2><5>=\frac<1><5>\) Neela = \(\frac<2><5>-\frac<1><5>=\frac<2-1><5>=\frac<1><5>\) GR = 1 : 1 Gaining ratio 1 : 1