A, B and C are partners sharing profits in the ratio of 2:3:5.C retires and his capital, after all adjustments and revaluations, stands at Rs.7,20,000.A and B agreed to pay him Rs.10,20,000 in full settlement of his claim.Record necessary journal entry for the treatment of goodwill, if the new profit sharing ratio of A and B is agreed as 1:2.

Why is profit and loss suspense account prepared?

Sonu, Nonu and Tonu are Partners in a firm sharing profits and losses in the ratio of 3:2:1.Their balance sheet is as under
                                          Balance
                                           as at......

Tonu retired on the following terms.
(i)Provision for doubtful debts will be raised by Rs.1,000
(ii)Stock will be depreciated by 10% and furniture by 5%
(iii)There is an outstanding claim for damages of Rs.1,100 and it is to be provided for in the books.
(iv)Creditors will be written back by Rs.6,000
(v)Goodwill of the firm is valued at Rs.22,000, which is not to be shown in the books of the new firm.
(vi)Nonu is paid in full with the cash brought in by Sonu and Tonu in such a manner that their capitals are in proportion to their profit sharing ratio of 3:2.
Prepare the revaluation account, partners' capital accounts and the balance sheet of new firm.

The Balance sheet of Sun, Moon and Star sharing profits and losses in the ratio of 2:3:2 is given by                                                    

On same date, Sun desired to retire on the following terms.
(i) Land and Buildings be appreciated by 30%
(ii) Machinery be depreciated by 30%
(iii) Bad debts Rs.22,200.
(iv)The claim on account of workmen compensation fund was estimated at Rs.9,600.
(v)Goodwill of the entire firm be valued at Rs.1,68,000.Moon and Star decided to share the future profits and losses in the ratio of 3:4.
(vi)The total capital of the firm is to be the same as before retirement.Individual capitals be in their profit sharing ratio.
(vii)Amount due to Sun is to be settled by paying Rs.60,000 in cash and balance by transferring to loan account.
Prepare revaluation account, capital accounts of partners, balance sheet of new firm.

V, W and X were carrying out a  business as partners and sharing profits in the ratio of 2:1:1.Their balance sheet on 31st December, 2015 was as under
                                               Balance Sheet
                                        as at 31st December, 2015

V decided to retire on that date because of health problems.In this regard, following adjustment were agreed upon
(i)The value of buildings to be increased to Rs.96,000
(ii)The provision for bad and doubtful debts on debtors to be maintained at 3%
(iii)Plant and machinery should be valued at 20% less.
(iv)Goodwill of the firm is valued at Rs.36,000 and V's share is to be adjusted in the remaining partners' accounts.
(v)W and X agree that the capital of the new would be in their new profit sharing ratio and adjustment to be made through cash.
You are required to prepare revaluation account, partners' capital accounts and balance sheet.

How can the amount due to the retiring partner be settled?

P, Q and R were partners in a firm sharing profits in the ratio of 5:4:3.Their capitals were Rs.40,000, Rs.50,000 and Rs.1,00,000 respectively.State the ratio in which the goodwill of the firm amounting to Rs.1,20,000 will be adjusted on the retirement of R.

Arjun, Bhim and Nakul are partners sharing profits and Losses in the ratio of 14:5:6 respectively. Bhim retires and surrenders his 5/25th share in favour of Arjun. The goodwill of the firm is valued at 2 years purchase of super profits based on average profits of last 3 years. The profits for the last 3 years are Rs.50,000, Rs.55,000 and Rs.60,000 respectively. The normal profits for the similar firm are Rs.30,000. Goodwill already in the books of the firm at Rs.75,000. The profit for the first year after Bhim's retirement was Rs.1,00,000. Give the necessary Journal Entries to adjust Goodwill and distribute profits showing your workings clearly.

L, M and N are partners in a firm sharing profits in the proportion of 3:2:1.Their balance sheet on 31st March, 2015 stood as follows
                     Balance Sheet
                as at 31st March, 2015

M died on 30th June and her executors are entitled to be paid as under
(i)Capital to her credit at the time of her death and interest thereon @10% per annum.
(ii)Her proportionate share of general reserve.
(iii)Her share of profits for the intervening period will be based on the sales during that period.Sales were calculated as Rs.1,20,000.The rate of profit during past three years had been 10% on sales.
(iv)Goodwill according to her share of profit to be during p[ast by taking twice the amount of profits of the last three years less 20%.The profits of the previous three years were: I=-Rs.8,200,, II=Rs.9,000, III=Rs.9,800.
The investments were sold at par and her executors were paid out.Prepare M's capital account and her executor's account.

Following is the balance sheet as at 31st March, 2018 of X, Y and Z who share profits in the ratio of 4/7, 2/7, and 1/7 respectively.                                 Balance Sheet as at 31st March 2015

X retired on 1st April, 2015 and following arrangements were agreed upon.
(i) Goodwill of the firm is to be valued at Rs.42,000
(ii)The assets and liabilities are to be valued as under Stock Rs.24,000, sundry debtors Rs.21,000, loan and building Rs.45,200, plant and machinery Rs.50,000 and sundry creditors Rs.28,000.
(iii) Y and Z were to introduce Rs.40,000 and Rs.10,000 respectively into the business.
(iv) Rs.32,400 were to be paid to X, immediately as he needed money for his mother's operation.The balance due to X was to be paid in three equal instalments annually together with interest @9% per annum.
(v) Y and Z agreed not to retain goodwill in books.
Give journal entries to record the above and prepare balance sheet of the firm after X retirement and X loan account until it is paid.Also identify the value shown by the firm.

A,B and C are partners in a firm sharing profits in the ratio of 5:3:2 respectively. Their Balance Sheet as at 31st March, 2013 was as follows :

(iii) A's share of profit till the date of his death will be calculated on the basis of the profit of the year 2012-13.
(ii)Patents were revalued at RS.90,000, Machinery at RS.2,80,000 and Building at RS.2,50,000.
(i) Goodwill was valued at 2 years purchase of average profits of last 4 years which were 2009-10 : RS.1,00,000; 2010-11 : RS.1,60,000; 2011-12 : RS.1,80,000 and 2012-13 : RS.2,00,000.A died on 31st December, 2013 due to illness. It was agreed between the firm and A's executors that the amount due to A will be used for construction of a charitable hospital in a village as per the agreement.
(iv) Interest on capital will be provided at 10% p.a.
(v) Amount due to A's executor will be transferred to Charity Account.
(a) Prepare A's Capital Account to be presented to his executor.
(b) Identify any one value being highlighted in the question.

On 1.1.2008, Uday and Kaushal entered into partnership with fixed capitals of RS.7,00,000 and RS.3,00,000 respectively. They were doing good business and were interested in its expansion but could not do the same because of lack of capital. Therefore, to have more capital, they admitted Govind as a new partner on 1.1.2010. Govind brought RS.10,00,000 as capital and the new profit sharing ratio decided was 3:2:5. On 1.1.2012, another new partner Hari was admitted with a capital with of RS.8,00,000 for 1/10th share in the profits, which he acquired equally from Uday, Kaushal and Givind. On 1.4.2014 Govind died and his share was taken over by Uday and Hari equally, Calculate:

(i) The sacrificing ratio of Uday and Kaushal on Govind's admission.

(ii) New profit sharing ratio of Uday, Kaushal and Hari on Govind's death.

Kumar,Verma and Naresh were partners in a firm sharing profit and loss 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 Rs.2,350.

Pass necessary journal entry for the same in the books of the firm.

A,T and R were partners in a firm sharing profits in the ratio of 5:6:7 respectively. State the ratio in which the goodwill of the firm amounting to Rs.16,00,000 will be adjusted in the capital accounts of A and T in case of R's death.

What is the need for treatement of goodwill on the death of a partner ?

Narang, Suri and Bajaj are partners in a firm sharing profits and losses in proportion of 1/2, 1/6 and 1/3 respectively.The balance sheet on 1st April, 2015 was as follows                                 

Bajaj retires from the business and the partners agree to the following 
(i) Freehold premises and stock are to be appreciated by 20% and 15% respectively.
(ii) Machinery and Furniture are to depreciated by 10% and 7% respectively.
(iii) Provision for doubtful debts is to be increased to Rs.1,500.
(iv) Goodwill is valued at Rs.21,000 on Bajaj's retirement.
(v) The continuing partners have decided to adjust their capitals in their new profit sharing ratio after retirement of Bajaj.Surplus/deficit, if any, in their capital accounts will be adjustment through current accounts.
Prepare necessary ledger accounts and draw the Balance Sheet of the reconstituted firm.

On 31st December, 2015, the balance sheet of Pinki, Qureshi and Rakesh showed as under
                        Balance Sheet
                   as at 31st December 2013       

The partnership deed provides that profit be shared in the ratio of 2:1:1 and that in the event of death of a partner, His executors be entitled to be paid out
(i) The capital to his credit at the date of last balance sheet.
(ii) His proportion of reserves at the date of last balance sheet.
(iii) His proportion of profits to the date of death based on the average profits of the last three completed years, plus 10%.(iv)By way of goodwill, his proportion of the total profits for the three preceding years.The net profit for the last three years were

Rakesh died on 1st April, 2015.He had withdrawn Rs.5,000 to the date of death.The investments were sold at par and Rakesh's executors were paid off.Prepare Rakesh's capital account and that of his executors.

Nandan, Jhon and Rose are partners sharing profits in the ratio of 4:3:2.On 1st April, 2015, John gave a notice to retire from the firm.Nandan and Rosa decided to share future profits in the ratio of 1:1.The capital accounts of Nandan and Rosa after all adjustments showed a balance of Rs.43,000 and Rs.80,500 respectively.The total amount to be paid to John was Rs.95,500.This amount was to be paid by Nandan and Rosa in such a way that their capitals become proportionate to their new profit sharing ratio.Pass necessary journal entires in the books of the firm for the above transaction.show your working clearly.

H, I and J were partners in a firm with profit sharing ratio of 1/2, 1/3 and 1/6 respectively.The balance sheet of the firm at 31st March, 2015 was as follows

J retired on 1st April, 2015 on the following terms.
(i) Goodwill of the firm was valued at Rs.60,000.
(ii) Value of patents was to be reduced by 20% and that of machinery to 90%
(iii) Provision for doubtful debt was to be raised to 6%
(iv) Liability on account of provident fund was only Rs.6,000
(v) Liability for workmen compensation to the extent of Rs.12,000 is to be created
(vi) J took over the investment at market value.
(viii) Amount due to J is to be settled on the following basis
50% on retirement, 50% of the balance within one year and the balance by a bill of exchange at 3 months.
You are required to show entires for the treatment of goodwill, revaluation account, partners' capital accounts sheet of H and I after J's retirement.

A, B and C were partners in a firm sharing profits in the ratio of 6:5:4.Their capitals were Rs.1,00,000, Rs.80,000 and Rs.60,000 respectively.On1^st April, 2015, C retires from the firm and the new profit sharing ratio between A and B was decided as 11:4.On C's retirement, the goodwill of the firm was valued at Rs.90,000.showing your calculations clearly, pass necessary journal entry for the treatment of goodwill on C's retirement.