12th Standard Accountancy English Medium - Retirement and Death of a Partner 3 Mark Book Back Question Paper and Answer Key 2022 - 2023 | QB365

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12th Standard Accountancy English Medium - Retirement and Death of a Partner 3 Mark Book Back Question Paper and Answer Key 2022 - 2023

Published on: 01/09/2022

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Questions:

Generic 3

12 x 3 = 36

Janani, Janaki and Jamuna are partners sharing profits and losses in the ratio of 3:3:1 respectively. Janaki died on 31^st December, 2017. Final amount due to her showed a credit balance of Rs. 1,40,000. Pass journal entries if,
(a) The amount due is paid off immediately.
(b) The amount due is not paid immediately.
(c) Rs. 75, 000 is paid and the balance in future.

Kavin, Madhan and Ranjith are partners sharing profits and losses in the ratio of 4:3:3 respectively. Kavin retires from the firm on 31st December, 2018. On the date of retirement, his capital account shows a credit balance of Rs. 1,50,000. Pass journal entries if:
(a) The amount due is paid off immediately.
(b) The amount due is not paid immediately.
(c) Rs.1,00,000 is paid and the balance in future.

Rani, Jaya and Rathi are partners sharing profits and losses in the ratio of 2 : 2 : 1. On 31.3.2018, Rathi retired from the partnership. Profit of the preceding years is as follows: 2014: 10,000; 2015: Rs. 20,000; 2016: Rs.18,000 and 2017: Rs. 32,000 Find out the share of profit of Rathi for the year 2018 till the date of retirement if
(a) Profit is to be distributed on the basis of the previous year’s profit
(b) Profit is to be distributed on the basis of the average profit of the past 4 years
Also pass necessary journal entries by assuming partners capitals are fluctuating.

Balu, Chandru and Nirmal are partners in a firm sharing profits and losses in the ratio of 5:3:2. On 31^st March 2018, Nirmal retires from the firm. On the date of Nirmal’s retirement, goodwill appeared in the books of the firm at Rs. 60,000. By assuming fluctuating capital account, pass the necessary journal entry if the partners decide to
(a) write off the entire amount of existing goodwill
(b) write off half of the existing goodwill

Rajan, Suman and Jegan were partners in a firm sharing profits and losses in the ratio of 4:3:2. Suman retired from partnership. The goodwill of the firm on the date of retirement was valued at Rs. 45,000. Pass necessary journal entries for goodwill on the assumption that the fluctuating capital method is followed.

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 31^st March, 2017 is as follows:

Liabilities	Rs.	Rs.	Asset	Rs.
Capital accounts:			Buildings	1,10,000
Akash	40,000		Vehicle	30,000
Mugesh	60,000		Stock in trade	26,000
Sanjay	30,000	1,50,000	Debtors	25,000
Profit and loss appropriation A/c		12,000	Cash in hand	15,000
General reserve		24,000
Workmen compensation fund		18,000
Bills payable		2,000
		2,06,000		2,06,000

Pass journal entry to transfer accumlatetd Profit and prepare the capital account of the partners

What are the ways in which the final amount due to an outgoing partner can be settled?

List out the adjustments made at the time of retirement of a partner in a partnership firm.

Rathna, Baskar and Ibrahim are partners sharing profits and losses in the ratio of 2:3:4 respectively. Rathna died on 31st December, 2018. Final amount due to her showed a credit balance of Rs. 1,00,000. Pass journal entries if,
(a) The amount due is paid off immediately by cheque.
(b) The amount due is not paid immediately.
(c) Rs. 60,000 is paid immediately by cheque.

10.

Kavitha, Kumudha and Lalitha are partners sharing profits and losses in the ratio of 5 : 3 : 3 respectively. Kumudha retires from the firm on 31^st December, 2018. On the date of retirement, her capital account shows a credit balance of Rs. 2,00,000. Pass journal entries if:
i) The amount due is paid off immediately by cheque.
ii) The amount due is not paid immediately.
iii) Rs. 70,000 is paid immediately by cheque

11.

Justina, Navi and Rithika are partners sharing profits and losses equally. On 31.3.2019, Rithika retired from the partnership firm. Profits of the preceding years is as follows:
2016: Rs. 5,000; 2017: Rs. 10,000 and 2018: Rs. 30,000
Find out the share of profit of Ritika for the year 2019 till the date of retirement if
(a) Profit is to be distributed on the basis of the previous year’s profit
(b) Profit is to be distributed on the basis of the average profit of the past 3 years
Also pass necessary journal entries by assuming that partners’ capitals are fluctuating. Accountancy

12.

Prince, Dev and Sasireka are partners in a firm sharing profits and losses in the ratio of 2:4:1. Their balance sheet as on 31^st March, 2019 is as follows:

Liabilities	Rs.	Rs.	Assets	Rs.
Capital accounts			Buildings	40,000
Prince	30,000		Plant	50,000
Dev	50,000		Furniture	10,000
Sasireka	20,000	1,00,000	Stock	15,000
Profit and loss appropriation A/c		10,000	Debtors	20,000
General reserve		15,000	Cash at bank	15,000
Workmen compensation fund		17,000
Sundry creditors		8,000
		1,50,000		1,50,000

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Answers Key:

Generic 3

12 x 3 = 36

Journal entries
Date	Particular		Debit Rs	Credit Rs
31st	(a)Janaki's Executor's A/c		1,40,000
Dec 2017	To BankA/c			1,40,000
	(Amount due paid immediately)
31st	(b) Janaki's Executor's A/c	Dr	1,40,000
Dec 2017	To Janakis Executor's loan A/c			1,40,000
	(Amount due transferred to loan account)
31st	(c) Janaki's Executor's A/c	Dr
Dec 2017	To Bank A/c		1,40,000	75,000
	To Janaki's Executor's loan A/c			65,000
	(Rs. 75,000 paid and the balance transferred to loan account)

Journal entries
Date	Particulars		Debit Rs	Credit Rs
2018	(i) Kavin's capital A/c	Dr.	1,50,000
Dec.31	To Bank Ale			1,50,000
	(Amount due paid immediately)
2018	(ii) Kavins capital A/c	Dr	1,50,000
	To Kavins loan A/c			1,50,000
	(Amount due transferred to loan account)
2018	(iii) Kavins capital A/c	Dr	1,50,000
Dee.31	To Bank A/c			1,00,000
	To Kavins loan A/c			50,000
	(Rs 1,00,000 paid and the balance transferred to Ian account)

(a) If profit is to be distributed on the basis of the previous year's profit
Rathi's share of profit for 3 months
= \(32,000\cfrac { 3 }{ 12 } \times \cfrac { 1 }{ 5 } =Rs.100\)

Particulars		Debit Rs	Creditl Rs
Profit and loss suspense A/c	Dr	1,600
To Rathi's capital A/c			1,600
(Profit is to be distributed as the basis of previous year profit)

(b) If profit is to be distributed on the basis of average profit of the past 4 years
Average profit = \(\cfrac { 10,000+20,00+18,000+32,000 }{ 4 } \)
= \(\cfrac { 80,000 }{ 4 } =Rs20,000\)
Rathi's share of profit for 3 months
= \(20,000\times \cfrac { 1 }{ 5 } \times \cfrac { 3 }{ 13 } =Rs.1000\)

Date	Particulars		Debit Rs	Credit Rs
2018	Profit and loss suspense A/c	Dr.	1,000
March 31	To Rathi's capital A/c			1,000
	(Rathi's current year share of profit credited to her capital account)

Journal entry
Particulars		Depit Rs	Credit Rs
Balu's capital A/c	Dr.	30,000
Chandru's capital A/c	Dr	18,000
Nirmal's capital A/c	Dr	12,000
To Goodwill A/c			60,000
(value of goodwill entirely shared to all partners)

Journal entry
Particulars		Debit Rs	Credit Rs
Balus capital Alc	Dr	15,000
Chandru's capital A/c	Dr	9,000
Nirmal's capital A/c	Dr	6,000
To Goodwill A/c			30,000
(Half of the existing goodwill written off)

As the new profit sharing ratio and gain made by the continuing partner is not mentioned, it is assumed that they gain in their old profit sharing ratio of 4:2. Therefore, gaining ratio
Suman's share goodwill = \(45000\times \cfrac { 3 }{ 9 } =Rs.15,000\)

Journal entry
Particulars		Debit Rs	Credit Rs
Rajan's capital A/c (15,000 x 4/6)	Dr	10,000
lagan's capital A/c (15,000 x 2/6)	Dr	5,000
To Suman's capital A/c			15,000
(Suman's share of goodwill is adjusted)

Journal Entries
Date	Particulars		Debit Rs	Credit Rs
2017	Profit and Loss appropriation A/c	Dr	12,000
March 31	General reserve A/c	Dr	24,000
	Workmen compensation fund	Dr	18,000
	To Akash's capital A/c(54,000 x 3/6)			27,000
	To Mugesh's capital A/c (54,000 x 2/6)			18,000
	To Sanjay's capital A/c ( 54,000 x 116)			9,000
	(Accumulated profits and reserve
	transferred to all partner's capital account
	in the old profit sharing ratio)

Dr Capital Account Cr
Particulars	Akash Rs	Mukesh Rs	Sanjay Rs	Particulars	Akash Rs	Mukesh Rs	Sanjay Rs
To Balance c/d	67,000	78,000	39,000	By Balance b/d	40,000	60,000	30,000
				By Accumulated
				profit and loss A/c	27,000	18,000	9,000

	67,000	78,000	39,000		67,000	78,000	39,000
				By Balance b/d	67,000	78,000	39,000

The amount due to the retiring partner may be settled in one of the following ways.
(i) Paying the entire amount due immediately in cash.
(ii) Transfer the entire amount due to the loan account of the partner.
(iii) Paying part of the amount immediately in cash and transferring the balance to the loan account of the partner.
The journal entries to be made are as follows
(a) When the amount due is paid in cash immediately

Date	Particulars	L.F	Debit Rs	Credit Rs
	Retiring partner's capital A/c Dr		XXX
	To Cash I Bank A/C			XXX

(b) When the amount due is not paid immediately in cash

Date	Particulars	L.F	Debit Rs	Credit Rs
	Retiring partner's capital A/c Dr		XXX
	To Retiring partner's loan Ale			XXX

Particulars	Debit Rs	Credit Rs
Retiring partner's captalAlc Dr	XXX
To Cash I Bank A/c (amount paid)		XXX
To Retiring partner's loan Alc		XXX

Retiring partner's loan account will appear on the liabilities side o the balance sheet prepared after retirement till it is completely settled

The following adjustments are necessary at the time of retirement of a partner.
(i) Distribution of accumulated profits, reserves and losses.
(ii) Revaluation of assets and liabilities.
(Hi) Determination of new profit sharing ratio and gaining ratio.
(iv) Adjustment for goodwill.
(v) Adjustment for current year's profit or loss upto the date of retirement.
(vi) Settlement of the amount due to the retiring partner.

Journal entries
Particulars		Debit Rs.	Credit Rs.
(a) Rathna’s Executor A/c	Dr.	1,00,000
To Bank A/c			1,00,000
(Amount due paid immediately)
(b) Rathna’s Executor A/c	Dr.	1,00,000
To Rathna’s Executor loan A/c			1,00,000
(Amount due transferred to loan account)
(c) Rathna’s Executor A/c		1,00,000
To Bank A/c			60,000
To Rathna’s Executor loan A/c			40,000
(Rs. 60,000 paid and the balance transferred to loan account)

10.

Journal entries
Date	Particulars		Debit Rs.	Credit Rs.
2018 Dec. 31	(i) Kumudha’s capital A/c	Dr.	2,00,000
	To Bank A/c			2,00,000
	(Amount due paid immediately)
"	(ii) Kumudha’s capital A/c	Dr.	2,00,000
	To Kumudha’s loan A/c			2,00,000
	(Amount due transferred to loan account)
"	(iii) Kumudha’s capital A/c		2,00,000
	To Bank A/c			70,000
	To Kumudha’s loan A/c			1,30,000
	(Rs. 70,000 paid and the balance transferred to loan account)

11.

(a) If profit is to be distributed on the basis of the previous year’s profit:
Ritika’s share of profit for 3 months \(=30000\times\frac{3}{12}\times\frac{1}{3}=Rs.2,500\)

Date	Particulars		Debit Rs.	Credit Rs.
2019 March 31	Profit and loss Suspense A/c	Dr.	2,500
	To Rithika’s capital A/c			2,500
	(Rithika’s current year share of profit credited to her capital account)

(b) If profit is to be distributed on the basis of the average profit of the past 3 years:
Average profit \(=\frac{5,000+10,000+30,000}{3}\)
= 15,000
Ritika’s share of profit for 3 months \(=15000\times\frac{3}{12}\times\frac{1}{3}=Rs.1,250\)

Date	Particulars		Debit Rs.	Credit Rs.
2019 March 31	Profit and loss Suspense A/c	Dr.	1,250
	To Rithika’s capital A/c			1,250
	(Rithika’s current year share of profit credited to her capital account)

12.

Journal entry
Date	Particulars		Debit Rs.	Credit RS.
2019 March 31	Profit and loss appropriation A/c	Dr.	10,000
	General reserve A/c	Dr.	55,000
	Workmen compensation fund A/c	Dr.	17,000
	To Prince’s capital A/c (42,000 × 2/7)			12,000
	To Dev’s capital A/c (42,000 × 4/7)			24,000
	To Sasireka’s capital A/c (42,000 × 1/7)			6,000
	(Accumulated profits and reserve transferred to allpartners’ capital account in the old profit sharing ratio)