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# What is the purpose of calculating the gaining ratio?

What is the purpose of calculating the gaining ratio?

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 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:

1. Paying the entire amount due immediately in cash
2. Transfer the entire amount due to the loan account of the partner
3. 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 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