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12th | Retirement Of A Partner | Question No. 16 To 20 | Ts Grewal Solution 2023-2024

Question 16: Aman, Bimal and Deepak are partners sharing profits in the ratio of 2: 3: 5. The goodwill of the firm has been valued at `37,500. Aman retired. Bimal and Deepak decided to share profits equally in future.


Calculate gain/sacrifice of Bimal and Deepak on Aman's retirement and also pass necessary Journal entry for the treatment of goodwill. (CBSE 2019)

 

Answer:


Journal

Date

Particulars

L.F.

Debit

 (`)

Credit

 (`)

Bimal’s capital a/c

Dr.

7,500

 

   To Amal’s capital a/c

7,500

 

(Being Goodwill adjusted)

 

 

 

 

 

 

 

Working notes;

WN1-

Calculation of gaining and sacrificing ratio

 

Amal

Bimal

Deepak

Old ratio

2                   :

3                :

5

New ratio

Retires

1                :

1

Bimal = 3/10-1/2=3-5/10= -2/10

Deepak =5/10-1/2=5-5/10= 0/10

Gaining ratio of Sunil and David=13:11

 

WN2-

Firms goodwill =37,500

Share of retiring partner Amal is 2/10

Share of Amal share =37,500×2/10=7,500

Bimal will compensate 7,500

 

Question 17:


A, B and C are partners sharing profits in the ratio of 4/9 : 3/9 : 2/9. B retires and his capital after making adjustments for reserves and gain (profit) on revaluation stands at  ` 1,39,200. A and C agreed to pay him  ` 1,50,000 in full settlement of his claim. Record necessary Journal entry for adjustment of goodwill if the new profit-sharing ratio is decided at 5 : 3.

 

Answer:


Journal

 

Date

Particulars

L.F.

Debit

`

Credit

`

 

A’s Capital A/c

Dr.

 

5,850

 

 

C’s Capital A/c

Dr.

 

4,950

 

 

    To B’s Capital A/c

 

 

 

10,800

 

(Being Adjustment of B’s share of goodwill)

 

 

 

 


Working Notes
i. Calculation of B’s share of goodwill
A, B and C are sharing profits in ratio 4/9 : 3/9 : 2/9
B retires from the firm. Remaining partners agreed to pay him
` 1,50,000
B’s capital after making necessary adjustments
` 1,39,200
Therefore, Hidden Goodwill is
` (1,50,000 – 1,39,200) i.e. ` 10,800

ii Gaining Ratio
New profit sharing ratio between A and B is 5:3
A's Gain=5/8-5/9=13/72

C's Gain=3/8-2/9=11/72
Gaining ratio 13:11

Thus, B’s share of goodwill will be brought in by A and C in the gaining ratio 13:11 i.e.

A’s capital will be debited =10,800×13/24=5850

C’s capital will be debited =10,800×11/24=4950

 

Question 18: Shivam, Kapil and Deepak are partners sharing profits in the ratio of 3:1:2. On 31st March, 2023, Kapil retired and his capital account after adjustments of reserve and profit on revaluation was ` 3,50,000. Shivam and Deepak paid him  ` 4,20,000 in settlement of his claim. To settle his account, a computer of ` 4,20,000 was given to Kapil. Pass the necessary Journal entries in the books of the firm.


Answer:


Date

Particulars

 

`

`

1.

Shivam’s Capital A/c

Dr.

42,000

 

 

Deepak’s Capital A/c

Dr.

28,000

 

 

 To Kapil’s Capital A/c

 

 

70,000

 

(Kapil was compensated for his share of goodwill )

 

 

 

2.

Kapil’s Capital A/c

Dr.

4,20,000

 

 

 To Computer A/c

 

 

4,20,000

 

(Computer was paid in consideration of Capital)

 

 

 

Working notes:

Kapil’s capital

(after adjustments of reserve and profit on revaluation) 

=

` 3,50,000

Less: Shivam and Deepak paid him capital in settlement of his claim

=

` 4,20,000

Hidden Goodwill (Share of Kapil in Goodwill)

=

` 70,000

Shivam and Deepak Pay in 3:2

Shivam  = 70,000 × 3/5= 42,000

Deepak = 70,000 × 2/5= 28,000

 

Question 19:


M, N and O are partners in a firm sharing profits in the ratio of 3 : 2 : 1. Goodwill has been valued at ` 60,000. On N's retirement, M and O agree to share profits equally. Pass the necessary Journal entry for treatment of N's share of goodwill.

 

Answer:


Journal

Date

Particulars

L.F.

Debit

 (`)

Credit

 (`)

 

 

 

 

 

 

 

O’s Capital A/c

Dr.

 

20,000

 

 

     To N’s Capital A/c

 

 

 

20,000

 

(Being Adjustment of N’s share of goodwill)

 

 

 

 

 

 

 

 

 

 

Working Notes:

WN1:Calculation of Gaining Ratio

M :N :O=3:2:1(Old ratio)

M :O =1:1(New ratio)

Gaining Ratio = New Ratio - Old Ratio

M's Gain =1/2−3/6=3−3/6=0

O's Gain=1/2−1/6=3−1/6=2/6

WN2: Calculation of Retiring Partner’s Share of Goodwill

N's share of goodwill=60,000×2/6=
` 20,000

N's share of goodwill will be brought by O only.

Therefore, O's Capital A/c will be debited with ` 20,000

 

Question 20:


A, B, C and D are partners in a firm sharing profits, in the ratio of 2 : 1 : 2 : 1. On the retirement of C, Goodwill was valued  ` 1,80,000. A, B and D decide to share future profits equally. Pass the necessary Journal entry for the treatment of goodwill.

 

Answer:


Journal

Date

Particulars

L.F.

Debit

 (`)

Credit

 (`)

 

B’s Capital A/c

Dr

 

30,000

 

 

D’s Capital A/c

Dr.

 

30,000

 

 

     To C’s Capital A/c

 

 

 

60,000

 

(Being Adjustment of C’s share of goodwill)

 

 

 

 

 

 

 

 

 

 

Working Notes:

WN1:Calculation of Gaining Ratio

A :B :C :D=2:1:2:1(Old ratio)

A :B :D =1:1:1(New ratio)

Gaining Ratio = New Ratio - Old Ratio

A's Gain =1/3−2/6=2−2/6=0

B's Gain =1/3−1/6=2−1/6=1/6

D's Gain =1/3−1/6=2−1/6=1/6

A:B:D=0:1:1

WN2: Calculation of Retiring Partner’s Share of Goodwill
C's share of goodwill=1,80,000×2/6=
` 60,000

C's share of goodwill will be brought by B and D in their gaining ratio1:1

Therefore, B's Capital A/c will be debited with 60,000×1/2=` 30,000

And, D's Capital A/c will be debited with 60,000×1/2=` 30,000

 

 

Ts Grewal Solution 2023-2024

Click below for more Questions

Class 12 / Volume – I

Chapter 5 – Retirement of a Partner

 

Question No. 1 To 5
Question No. 6 To 10
Question No. 11 To 15
Question No. 16 To 20
Question No. 21 To 25
Question No. 26 To 30
Question No. 31 To 35
Question No. 36 To 40
Question No. 41 To 45
Question No. 46 To 50
Question No. 51 To 55

Question No. 56 To 60