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a |, =O, , Calculation of Preparation of, (a) Gain Ratio = } (a) Revaluation A/c, New Ratio - Old Ratio } (b) Partners Capital A/c, (b) New Profit Ratio= (c) Goodwill A/c, Old Ratio + Gained Share| 1) (d) New Balance Sheet, , Valuation of Goodwill, , Highlights of Accounting Procedure, , of Revaluation as in the case of admission of a partner, of Profit & Loss A/c balances and reserve in old Ratio to partners in their Capital A/c., , , , Scanned with CamScanner

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Ratio is used to distribute, , , , »,. Profitor loss GRA eeeinae cumulated profits and losses at the time of retirement of a partner., 2. Prontor ic evaluation is shared am, , a among the partners in rtirement c e, 3, New ratio - Old ratio = P e ratio on retirement of a partner., , 4. Accumulated losses are transferred to the Capit., , ratio. al Accounts of the partners at the time of retirement in their, , 5. General reserve is to be orre, : ‘o be transferredto___Accounts at the time of retirement of a partner, 6. Goodwill raised to the extent of re, , in ratio. tiring partner's share only is to be debited to continuing partners capital accounts, , n the absence of any instruct 2 's Ci, In the ce of any instruction Retiring Partner's Capital A/ c is closed by transferring its balance to__A/c, ratio is used for adjustment of continuing partners capitals., 9. X.Y and Z are the partners sharing profits and losses in the ratio of 3:2:1.IFY retires, the new ratio of X and Z will, , be., 10. Share gained is calculated by deducting share from the New Share, 11. The ratio in which the remaining partners’ will share future profits after retirement is called ___ratio., 12. a ae in the retiring partner's loan A/ cis shown on the side of the B/ S till the last installment is, paid,, 13. The amount paid to the Retiring Partner in excess of what is due to him is called goodwill., 14. In the absence of any agreement as the disposed of amount due to Retiring Partner, Sec of the Indian, Partnership Act, 1932 is applicable., . If goodwill already appears in the books, it will be written off by debiting A/ cin their OPSR., , , , , , , , , , , , 3. Gain Ratio 4. Old, , 7. Retiring partner's loan account 8. New, 11. Gain 12. Liability, 15. Allthe partner capital, , , , , , , , , , , , , , , , , ee ure omer, , 1. Abhishek, Rajat and Vivek are partners sharing, , Sharing Ratio between Abhishek and Rajat will beG 5:2 d. None of the above, , Satish and Tejpal were 2:2: |.The New Profit Sharing Ratio, , , , , , profits in the ratio of 5:3:2. If Vivek retires, the New Profit, (March 2020), , |, | a 3:2 b. 5:3, , | 2. The old profit sharing ratio among Rajender,, after Satish’s retirement is 3:2. The gaining ratio isa 3:2 b. 2:1 c 1:1, , d. 2:2, , Scanned with CamScanner

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me: ) Leen en, , 3, Anand, Bahadur and Chander are py, , isa, , , , s. sharing profit equally. On Chander’s retirement, his shan 1, , quired by Anand and Bahadur in the ratio of 3:2. TI 5, " 3:2. The New Profit Sha atio between Anand, Bahadur will be: haring Ratio between Anand ang, , , , a. 8:7 b. 4:5 G32 ad. 2:3, , 4. Inthe abs y r :, " e ae of any information regarding the acquisition of share in the profit of the retiring/ deceasey, ne , rema, pa rT by the remaining partners, itis assumed that they will acquire his/ her share, , a. Old Profit Sharing Ratio, c. Equal Ratio, , b. New Profit Sharing Ratio, d. None of the above, S. On retirement / death of a partner, the Retiring/ Deceased Partner's Capital Account will be credited With, a. his/ her share of goodwill., b. goodwill of the firm., © shares of goodwill of remaining partners, d. none of the above., , 6. Govind, Hari and Pratap are partners. On retirement of Govind, the goodwill already appears in the Balance 4, Sheet at 24,000. The goodwill will be written off by debiting:, , a. All Partners’ Capital Accounts in their old profit sharing ratio., , b. Remaining Partners’ Capital Accounts in their new profit sharing ratio., © Retiring Partners’ Capital Accounts from his share of goodwill, , d. None of the above, , 7. Chaman, Raman and Suman are partners sharing profits in the ratio of 5:3:2. Raman retires, the new, profit sharing ratio between Chaman and Suman will be 1:1, The goodwill of the firm is valued at 1,00,000, Raman’s share of goodwill will be adjusted by:, , a. Debiting Chaman's Capital Account and Suman’s Capital Account with 15,000 each., b. Debiting Chaman's Capital Account and Suman’s Capital Account with 21,429 and 8,571 respectively., c. Debiting only Suman's Capital Account with 30,000,, d. Debiting Raman’s Capital Account with 30,000., 8. On retirement / death of a partner, the remaining partner(s) who have gained due to change in profit, sharing ratio should compensate the:, a. Retiring partners only., b. Remaining partners (who have sacrificed) as well as retiring partners., c. Remaining partners only (who have sacrificed) ., , , , , , , , , , , , __ d. None ofthe above., = = €, Answers a, , Z5b.:523 AG 2:4, 3, a. 8:7 4. a, Old profit Sharing ratio, 5. a His / her share of Goodwill. 6. a, All partners capital A/c’s in their old profit s!, ratio,, 8. b. Remaining partners (who have sacrificed), well as retiring partners,, , , , , , , , Scanned with CamScanner

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|. True or False Type Questions, , Profit or loss on rev:, 1. Profit or loss on revaluation is transferred to All Partners’ Capital Accounts in case of retirement of a partner., , Accumulated profit is transferred to ( ontinuing Partners Capital Accounts., , 3, Adjustment of partners capitals of the remaining partners is to be made in the New Ratio., , 4, New Share = Old share + share sacrificed., , >. Share gained is computed by deduc ting Old share from the New Share., , 6. Increase in the value of asset is debited to Revaluation Account, Gain ratio is used to adjust the goodwill raised to the extent of retiring partner share only., Full value of @ ' . 2 y, Full value of goodwill raised on retirement is credited to All Partners Capital Accounts including retiring partner in, | their old ratio,, Sec 37 e or " an, ec 37 of the Indian Par tnership Act, 1932 states that the outgoing partner has an option to receive either interest, @ 6% p.a. till the date of payment or such share of profits which has been earned with his money., , , , , , , , , , , , , , , , , , , , 2 =— er, 3. True | _4 False |, , — 7. True [__8. True_ |, , 9. True - |, , , , — —, EE What do you mean by retirement of a partner?, , Ans. Is a process in which the partner terminates his rc\ationship with firm., , | 2] Give the formula for calculating Gain Ratio., , Ans. Gain Ratio = New Ratio - old Ratio, , EB Why the Gain Ratio is required on retirement of a partner?, , Ans. To write off the Goodwill raised to the extent of retiring partners share among the continuing partners., , EZ Why the New Ratio is required on retirement of a partner?, , Ans. To write off the Good will raised at its full value among the continuing partners,, , EE Give the formula for calculation of new profit sharing ratio on retirement of a partner, (March 2019), , Ans. New Ratio = Old Ratio + Gained share, , , , What do you mean by Hidden Goodwill ?, Ans. The amount paid to the retiring partner in excess of what is due to him is called Hidden Goodwill., , Ans. Portion Gained = New Share ~ Old share, , Scanned with CamScanner

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ent of a partner,, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Ans, a. old age of a partner c¢. Lunacy of any partner, b. Unknownful business d, Insolvency of any partner, —., HE What is Gain Ratio?, Ans. Gain Ratio is the ratio in which the continuing par tners gain the share of retiring partner on his retirement, EEysae any two differences between sacrificing ratio and gaining ratio. Ans. | Sacrificing Ratio Gaining Ratio |, ] It is calculated at the time of admission of a partner. It is calculated at the time of retirement of a partner., | It is required to distribute the good will brought in cash by | It is required to write off the goodwill raised to the extent of], the new partner. retiring partner., ] Decreases the old partner's share of profit Increases the remaining partners share of profit., | Sacrifice Ratio = old Ratio — new ratio Gain Ratio = new ratio - old ratio., , , , , , State any two purposes of calculating new profit sharing ratio., Ans. i. Toshare the future profits of the firm., ii, To write off the firms good will,, iii, To adjust the remaining partners capital., Name two methods of treatment of goodwill?, Ans. a. Goodwill is raised at its full value & retained in business, b. Goodwill is raised at its full value and written off by continuing partners., How do you close the Revaluation Account on retirement ofa partner?, Ans. The profit or loss (balance) in revaluation account distributed among all the partners in old profit sharing ratio,, , , , Pass the journal entry for adjusting retiring partners share of goodwill when no goodwill is raised., , Ans., , Continuing partners capital A/c Dr., To Retiring partners capital A/c, (Being retiring partners share of goodwill adjusted.), , Mention any two modes of payment on settlement of Retiring Partner's Capital Account., Ans. _ i. The settlement is made by cash or cheque., ii, The settlement is made through bank over draft., , iii. The amount due to retiring partner treated as loan, iv. The amount due party pain in cash and the balance transferred to loan a/c., , Pass the journal entry to close Retiring Partner's Capital Account when the payment is made immediately., Ans., , , , , , Retiring partners capital A/c Dr, , To Cash / Bank A/c, payment made to retiring partner immediately.), , , , , , , , , , , , , , Scanned with CamScanner