Calculation of New ratio & Gaining Ratio

Sunil Panda Commerce Classes

Q.1) R,S and M are partners sharing profit in the ratio of 2/5, 2/5 and 1/5.
M decides to retire from the business and his share is taken by R and S in the ratio of 1:2.
Calculate the new profit sharing ratio.
Q.2) Chintan, Manni and Amar were partners Sharing profits and losses in the ratio of 4:3:2.
Amar retired from the firm. Chintan took 5/9th of Amar’s share and the balance was taken
by Manni. Calculate new profit-sharing ratio and gaining ratio.
TREATMENT OF GOODWILL

Sunil Panda Commerce Classes

Q.3) P, Q and R are partners sharing profits in ratio of 3:2:1. R retires from the firm by selling
his share of profit to P & Q and the following entry was passed.

Date Particulars L.F. Debit Credit

P’s Capital A/c dr. 90,000
Q’s Capital A/c dr. 60,000
To R’s Capital A/c 1,50,000
(Being Adjustment made for goodwill)

Find out New Profit-Sharing Ratio of P & Q.

Q.4) Armaan, Anup and Sushant were partners in a firm sharing profits in the ratio of 3:2:1.
Sushant retired and the new profit-sharing ratio between Armaan and Anup was 1:2. On
Sushant’s retirement goodwill of the firm was valued at 30,000. Pass necessary journal entry
for the treatment of goodwill on Sushant’s retirement.
GOODWILL RAISED AND WRITTEN OFF

Sunil Panda Commerce Classes

Q.5) X Y and Z are partners sharing profit in the ratio of 3:2:1. Goodwill is appearing in the
books at a value of 60,000. Y retires and at the time of Y’s retirement goodwill is valued at
84,000. X and Z decided to share future profits in the ratio of 2:1. Pass the necessary
journal entries through goodwill account.
DISTRIBUTABLE ITEMS

Sunil Panda Commerce Classes

 Revaluation Account
Particulars Amount ₹ Particulars Amount ₹
To Increase in liability X By Decrease in liability X
To Decrease in assets X By Increase in assets X
To Unrecorded liability X By Unrecorded assets X
To Revaluation Gain transfer to X By Revaluation Loss transfer to X
Partner’s Capital/ Current A/c Partner’s Capital/ Current A/c

xx xx
PARTNER’S CAPITAL ACCOUNT
Q.6) A, B and C were partners in a firm. Their balance sheet as at 31-3-2019 was as follow:
Liabilities Amount Assets Amount
Bill payables 20,000 Bank 20,000
Creditors 40,000 Furniture 28,000
General reserve 30,000 Stock 20,000
Workmen compensation reserve 6,000 Debtors 45,000
Less: (PFDD) (5,000) 40,000
Capitals Land and building 1,20,000
A. 60,000
B. 40,000
C. 32,000 1,32,000
2,28,000 2,28,000
B retired on 1st April,2019. A and C decided to share profits in the ratio of 2:1. The
following terms were agreed upon:

•Goodwill of the firm was valued at 30,000

•Bad debts 4,000 were written off. The provision for doubtful debts was to be maintained
10% on debtors

•Land and building were to be increased to 1,32,000

•Furniture was sold for 20,000 and the payment was received by cheque

•Liability towards workmen compensation was estimated at 1,500

•B was to be paid 20,000 through a cheque and the balance was transferred to his loan
account.

Prepare Revaluation account & partners’ capital accounts

Partner’s loan Account
Q.7) X, Y and Z were in partnership sharing profits and losses equally. Y retired from the firm.
After adjustments his capital account show a credit balance of 75,000 as on 1st April, 2019 Y
was paid 15,000 immediately on retirement and the balance amount is to be paid in three
equal annual instalment along with the interest @5% p.a. prepare Y’s loan account until he is
paid the entire amount due to him. The firm closes its book on 31st march every year
ADJUSTMENT OF CAPITAL (CASE 01)
ADJUSTMENT OF CAPITAL (CASE 2)
ADJUSTMENT OF CAPITAL (CASE 2A)
Q.8) Lisa, Monika and Nisha were partners in a firm sharing profit and loss in the ratio of
2:2:1. on 31st march, 2019 their balance sheet was as follows:

Liabilities Amount Assets Amount

Trade creditors 1,60,000 Land and building 10,00,000
Bills payable 2,44,000 machinery 12,00,000
Employee provident fund 76,000 Stock 10,00,000
Capitals: Sundry debtors 4,00,000
Lisa 14,00,000 Bank 40,000
Monika 14,00,000
Nisha 3,60,000 31,60,000
36,40,000 36,40,000
On 31st march, 2019 Monika retired from the firm and the remaining partners decided to
carry on the business it was agreed that:
i) Land and building be appreciated by 2,40,000 and machinery be depreciated by 10%
ii) 50% of the stock was taken over by the retiring partner at book value
iii) Provision for doubtful debts was to be made at 5% on debtors
iv) Goodwill of the firm be valued at 3,00,000 and Monika share of goodwill be adjusted in
the account of Lisa and Nisha
v) The total capital of the new firm be fixed at 27,00,000 which will be in the proportion of
the new profit-sharing ratio of Lisa and Nisha for this purpose current account of the
partners were to be opened
Prepare revaluation account and partners capital account.
Q.9) A, B and C were partners in a firm sharing profit in the proportion of ½, 1/3 and 1/6
respectively. C retired on 1st April, 2014. The Balance Sheet of the firm on the date of c’s
retirement was as follows:
Liabilities Amount Assets Amount
Creditors 12,600 Bank 44,100
Provident fund 3,000 Debtors 30,000
General Reserve 9,000 Less: PFDD 1,000 29,000
Capital a/c Stock 25,000
A 60,000 Investment 10,000
B 46,500 Patents 5,000
C 40,000 96,500 Machinery 58,000
1,71,100 1,71,100
It was agreed that:

a) Goodwill will be valued at 54,000

b) Depreciation of 10% was to be provided on machinery

c) Patents were to be reduced by 20%

d) An old photocopier previously written off was sold for 600

e) C took over investment for 15,800

f) A and B decided to adjust their capitals in proportion of their profit-sharing ratio

by opening current account

Prepare Revaluation Account and Partner’s Capital Account on c retirement.

 Thank you
DOWNLOAD SPCC APP FOR MOST EXPECTED PREMIUM MOCK TEST