12th | Ts grewal 2021-2022 Question 11 to 15 | Retirement of a partner

Page No 6.56:

Question 11:

Murli, Naveen and Omprakash are partners sharing profits in the ratio of 3/8, 1/2 and 1/8. Murli retires and surrenders 2/3rd of his share in favour of Naveen and remaining share in favour of Omprakash. Calculate new profit-sharing ratio and gaining ratio of the remaining partners.

 

Answer:

Old Ratio=3:4:1

 

Murli's share=3/8

Share acquired by Naveen=3/8×2/3=2/8

 

Remaining Share=3/8−2/8=1/8 (acquired by Omprakash)

Gaining Ratio=28:18=2:1

 

Naveen's New Share=4/8+2/8=6/8

Omprakash's New Share=1/8+1/8=2/8

New Profit Sharing Ratio=3:1

 



Page No 6.56:

Question 12:

Om, Ram and Shanti are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. Ram decides to retire from the firm. Calculate new profit-sharing ratio of Om and Shanti in the following circumstances:
(a) If Ram gives his share to Om and Shanti in the original ratio of Om and Shanti.
(b) If Ram gives his share to Om and Shanti in equal proportion.
(c) If Ram gives his share to Om and Shanti in the ratio of 3 : 1.
(d) If Ram gives his share to Om only.

 

Answer:

Old Ratio (Om, Ram and Shanti) = 4 : 3 : 2

Ram retires from the firm.

His profit share = 3/9

Case (a) Ram gives his share to Om and Shanti in their original ratio.

Original Share (Om and Shanti) = 4 : 2

Share of mohan taken by Om =3/9×4/6=12/54

Share of mohan taken by Ram =3/9×2/6=6/54

New Ratio = Old Ratio + Share acquired from Ram

Om‘s new share= 4/9+12/54=24+12/54=36/54

Ram‘s new share= 2/9+6/54=12+6/54=18/54
∴ New Profit Ratio (Om and Shanti) = 36: 18 or 2: 1

Case (b) B gives his share to Om and Shanti in equal proportion.

Share taken by Om and Shanti =3/9×1/2=3/18 each

New Ratio = Old Ratio + Share acquired from Ram

Om‘s new share= 4/9+3/18 =8+3/18=11/18

Shanti‘s new share= 2/9+3/18 =4+3/18=7/18


∴ New Profit Ratio (Om and Shanti) = 11 : 7

Case (c) B gives his to Om and Shanti in the ratio 3 : 1.

Share taken by Om=3/9×3/4=9/36

Share taken by Ram=3/9×1/4=3/36

New Ratio = Old Ratio + Share acquired from Ram

Om‘s new share=4/9+9/36 =16+9/36=25/36

 

Shanti‘s new share=2/9+ 3/36=8+3/36=11/36


∴ New Profit Ratio (Om and Shanti) = 25 : 11

Case (d) B gives his share to Om only.

Om’s New Share = Om’s Old Share + Share of Ram =4/9+3/9=7/9
Shanti’s Share =2/9
∴ New Profit Ratio (Om and Shanti) = 7:2

 



Page No 6.56:

Question 13: Sunil, Shahid and David are partners sharing profits and losses in the ratio of 4:3:2.Shahid retires and the goodwill is valued at `72,000. Calculate Shahid's share of goodwill and pass the Journal entry for Goodwill.

Sunil and David decided to share future profits and losses in the ratio of 5:3.

 

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

( `)

Credit

Amount

( `)

Shahid’s capital a/c

Dr.

24,000

 

   To Sunil’s capital a/c

13,000

 

   To David’s capital a/c

11,000

 

(Being Goodwill adjusted)

 

 

 

 

 

 

 

 

 

 

 

Working notes;

WN1-

Calculation of gaining and sacrificing ratio

 

Sunil

Shahid

David

Old ratio

4                   :

3                :

2

New ratio

5

:

3

Sunil=4/9-5/8=32-45/72= -13/72

David= 2/9-3/8=16-27/72=-11/72

Gaining ratio of Sunil and David=13:11

 

WN2-

Firms goodwill =72,000

Share of retiring partner Shahid is 3/9

Share of shahid share =72,000×3/9=24,000

 

WN3-

Sunil and David will compensate 24,000 in their gaining ratio 13:11

Sunil will compensate=24,000×13/24=13,000

David will compensate=24,000×11/24=11,000

 



Page No 6.56:

Question 14:

P, Q, R and S were partners in a firm sharing profits in the ratio of 5 : 3 : 1 : 1. On 1st January, 2021, S retired from the firm. On S's retirement, goodwill of the firm was valued at  ` 4,20,000. New profit-sharing ratio among P, Q and R will be 4 : 3 : 3.
Showing your working notes clearly, pass necessary Journal entry for the treatment of goodwill in the books of the firm on S's retirement.

 

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

( `)

Credit

Amount

( `)

2021
Jan.1


R’s  Capital A/c


Dr.

 


84,000

 

 

  To P’s  Capital A/c

 

 

 

42,000

 

  To S’s  Capital A/c

 

 

 

42,000

 

(Being Goodwill adjusted)

 

 

 

 

 

 

 

 

 

 


Working Notes:

Gaining Ratio = New Ratio – Old Ratio 

P=4/10−5/10=−1/10 sacrifice

Q=3/10−3/10=0

R=3/10−1/10=2/10

P's share=4,20,000×1/10=42,000

R's share=4,20,000×2/10=84,000

S's share=4,20,000×1/10=42,000

 



Page No 6.56:

Question 15:

Aparna, Manisha and Sonia are partners sharing profits in the ratio of 3 : 2 : 1. Manisha retired and goodwill of the firm is valued at  ` 1,80,000. Aparna and Sonia decided to share future profits in the ratio of 3 : 2. Pass necessary Journal entries.

 

Answer:

Journal 

 

Date

Particulars

L.F.

Amount

( `)

Amount

( `)

 

Aparna’s Capitals A/c

Dr.

 

18,000

 

 

Sonia’s Capital A/c

Dr.

 

42,000

 

 

   To Manisha’s Capital A/c

 

 

 

60,000

 

(Being Manisha’s share of goodwill adjusted to Aparna’s and Sonia’s Capital Account in their gaining ratio)

 

 

 


Working Notes:

WN1: Calculation of Manisha’s Share in Goodwill

Manisha's share=Firm's Goodwill×Manisha's Profit ShareManisha's share=1,80,000×13=60,000

WN2: Calculation of Gaining Ratio
Gaining Ratio = New Ratio − Old Ratio

Aparna's gain=3/5−3/6=3/30

Sonia's gain=2/5−1/6=7/30

Gaining Ratio=3:7
Aparna's share=60,000×3/10=18,000

Sonia's share=60,000×7/10=42,000