Please wait...
1800-212-7858 (Toll Free)
9:00am - 8:00pm IST all days
8104911739
For Business Enquiry

or

Thanks, You will receive a call shortly.
Customer Support

You are very important to us

For any content/service related issues please contact on this toll free number

022-62211530

Mon to Sat - 11 AM to 8 PM

T. S. Grewal Solution for Class 12 Commerce Accountancy Chapter 5 - Retirement/Death of a Partner

Share this:

T. S. Grewal Solution for Class 12 Commerce Accountancy Chapter 5 - Retirement/Death of a Partner Page/Excercise 5.80

Solution Ex. 1

As we can see, no information is given as to how A and B are acquiring C's profit share after his retirement, so the new profit sharing ratio between A and B is calculated just by crossing out the C's share.

That is,

  

∴ New Profit Ratio A and B = 5:4

Solution Ex. 2

 

  

 

Solution Ex. 3

  

Since, no information is given as to how Q and R are acquiring P's profit after his retirement, therefore the new profit sharing ratio between Q and R is calculated simply by crossing out P's share.

∴ New profit Ratio (Q and R ) =4:1

Solution Ex.4

Old Ratio (Sita, Geeta and Meeta)=7:6:7

Geeta's Profit Share=6/20

After Geeta retired in the firm Geeta's share is divided between equally (Sita and Meeta) = 1:1

 

 

 

Solution Ex. 5

Old Ratio R, S and M = 2:2:1

M's after retires in the firm. His share taken by R and S = 1:2

 

Solution Ex. 6

Old Ratio (A,B and C) =4:3:2

New Ratio (B and C)=2:1

Gaining Ratio = New Ratio - old Ratio

  

Solution Ex. 7

Old Ratio between Kangli, Mangli and Sanvali =4:3:2

New Ratio between Mangli and Sanvali=5:3

Gaining Ratio = New Ratio - Old Ratio

Solution Ex. 8

Solution Ex. 9

(a)

New Ratio (W, X and Z)= 1:1:1

New Ratio = New Ratio - Old Ratio

∴ New Ratio= 0:1:1

 

 

(b)

Old Ratio (A,B and C)=4:3:2

C's Profit Share =2/9

A get by 4/9 of C's Share and remaining Share is get by B.

New profit share= Old Profit share +share get from C

∴ New Profit Ratio (A and B)=44:37

Gaining Ratio= New Ratio - Old Ratio

∴ Gaining Ratio= or 4:5

T. S. Grewal Solution for Class 12 Commerce Accountancy Chapter 5 - Retirement/Death of a Partner Page/Excercise 5.81

Solution Ex. 10

  

Gaining Ratio = 3:2 (as given in the question)

 

Solution Ex. 11

Solution Ex. 12

Old Ratio (A, B and C)= 8:4:3

  

Solution Ex. 13

Solution Ex. 14

Calculation of Gaining Ratio

P: Q: R = 7:5:3 (Old Ratio)

Q: R=7:5 (New Ratio)

Gaining Ratio = New Ratio - Old Ratio

Solution Ex. 15

  

Solution Ex. 16

Old Ratio (A, B and C )=4:3:2

(a) 

B gives his share in the original ratio to A and C.

 

 

 

Solution Ex. 17

 

 

Journal

Date

Particulars

 

 

L.F.

Debit

Rs. 

Credit

Rs. 

 

L's Capital A/c

Dr.

 

13,000

 

 

O's Capital A/c

Dr.

 

11,000

 

 

-----------To M's Capital A/c

 

 

 

24,000

 

(Being adjustment of  M's Share of goodwill made)

 

 

 

 

 

Working Notes:

 

1.

Calculation of Gaining Ratio 

 

  

M's retires from the firm

Gaining Ratio=New Ratio - Old Ratio

 

2.

Adjustment of Goodwill

Goodwill of the firm= Rs.72,000

This share of goodwill is to be debited to remaining partners' Capital A/c in their Gaining ratio (L and O) = 13:11

Solution Ex.18

Journal 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

R's Capital A/c 

Dr.

84,000 

----To P's Capital A/c 

42,000 

----To S's Capital A/c 

42,000 

(Goodwill adjusted) 

Working Notes: 

Gaining Ratio = New Ratio - Old Ratio

  

  

Solution Ex.19

Journal  

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

Aparna's Capitals A/c 

Dr.

18,000 

Sonia's Capital A/c 

Dr.

42,000 

----To Manisha's Capital A/c 

60,000 

(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

  

WN2: Calculation of Gaining Ratio

Gaining Ratio = New Ratio - Old Ratio

  

  

 

Solution Ex.20

Journal 

Date 

Particulars 

L.F. 

Debit 

Rs. 

Credit 

Rs. 

 

 

 

 

 

 

 

Hanny's Capital A/c

Dr.

 

30,000

 

 

Pammy's Capital A/c

Dr.

 

20,000

 

 

Sunny's Capital A/c

 

 

10,000

 

 

-----To Goodwill A/c

 

 

 

60,000

 

(Old goodwill written-off in old ratio)

 

 

 

 

 

 

 

 

 

 

 

Hanny's Capital A/c

Dr.

 

14,000

 

 

Sunny's Capital A/c

Dr.

 

14,000

 

 

-----To Pammy's Capital A/c

 

 

 

28,000

 

(Adjustment for goodwill in gaining ratio)

 

 

 

 

Working Notes: 

WN1: Calculation of Pammy's Share in Goodwill

  

WN2: Calculation of Gaining Ratio

Gaining Ratio = New Ratio - Old Ratio

  

T. S. Grewal Solution for Class 12 Commerce Accountancy Chapter 5 - Retirement/Death of a Partner Page/Excercise 5.82

Solution Ex. 21

 

 

Journal

Date

Particulars

 

L.F.

Debit

Rs. 

Credit

Rs. 

 

A's Capital A/c

Dr.

 

15,000

 

 

C's Capital A/c

Dr.

 

15,000

 

 

-----------To B's Capital A/c

 

 

 

30,000

 

(Being adjustment M's Share of goodwill made)

 

 

 

 

 

Working Notes:

 

1.

Calculation of gaining Ratio

B's partner is  retirement from the firm.

 

Gaining Ratio=New Ratio - Old Ratio

 

2. 

Adjustment of Goodwill 

Goodwill of the firm=Rs. 90,000

B's share of goodwill is to be debited to remaining partners Capital A/c in their Gaining ratio A and C = 1:1

Solution Ex.22

 

Journal Entry

Date

Particulars

 

L.F.

Debit

Rs.

Credit

Rs. 

 

 

 

 

 

 

 

X's Capital A/c

Dr.

 

30,000

 

 

Y's Capital A/c

Dr.

 

20,000

 

 

Z's Capital A/c

Dr.

 

10,000

 

 

--------To Goodwill A/c

 

 

 

60,000

 

(Being goodwill written off)

 

 

 

 

 

 

 

 

 

 

 

Goodwill A/c

Dr.

 

84,000

 

 

 ---- To X's Capital A/c

 

 

 

42,000

 

 ---- To Y's Capital A/c

 

 

 

28,000

 

 ---- To Z's Capital A/c

 

 

 

14,000

 

(Being before Y's retired distributed of goodwill)

 

 

 

 

 

 

 

 

 

 

 

X's Capital A/c

Dr.

 

56,000

 

 

Z's Capital A/c

Dr.

 

28,000

 

 

 ---- To Goodwill A/c

 

 

 

84,000

 

(Being after Y's retired distributed of goodwill)

 

 

 

 

 

 

 

 

 

 

 

Working Notes :

1. 

Calculation of Gaining Ratio 

 

Gaining Ratio = New Ratio - Old Ratio

Gaining Ratio (X and Z) = 1:1

 

2.

Calculation of Partner's share of Goodwill (3:2:1)

3.

Calculation of Partner's share of Goodwill after Y retried (2:1)

 

 

Solution Ex.23

 

Journal

Date

Particulars

 

L.F.

Debit

Rs. 

Credit

Rs. 

 

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 B's Share of goodwill made)

 

 

 

 

 

Working Notes:

 

1.

Calculation of B's share of goodwill

  

B retires from the firm.

Remaining partners A's and C's agreed to pay  =Rs.1,50,000

B's Capital after adjustment = Rs.1,39,200

Hidden Goodwill is = Rs.1,50,000 - Rs.1,39,200 =Rs.10,800

 

2.

Calculation of Gaining Ratio

 

Gaining Ratio = New Ratio - old Ratio

B's share of goodwill is to be debited to remaining partners Capital A/c in their Gaining ratio A and C = 13:11

Solution Ex.24

 

Journal Entry

Date

Particulars

 

L.F.

Debit

Rs.

Credit

Rs. 

 

 

 

 

 

 

 

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:

1.

Calculation of Gaining Ratio

 

Gaining Ratio = New Ratio - Old Ratio

  

  

2.

Calculation of Retiring Partner's share of Goodwill

Thus, only O's Share Capital A/c would be debited with Rs.20,000

 

Solution Ex.25

 

Journal Entry

Date

Particulars

 

L.F.

Debit

Rs.

Credit

Rs. 

 

 

 

 

 

 

 

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 :

1.

Calculation of Gaining Ratio

 

C's retires from the firm.

Gaining Ratio = New Ratio - Old Ratio

 

2. 

 Calculation of Retiring Partner's Share of goodwill

C's share of goodwill is to be debited to remaining partners Capital A/c in their Gaining ratio B and D = 1:1  

 

Solution Ex.26

 

Journal Entry

Date

Particulars

 

L.F.

Debit

Rs.

Credit

Rs. 

 

 

 

 

 

 

 

C's Capital A/c

Dr.

 

96,000

 

 

----- To A's Capital A/c

 

 

 

72,000

 

------ To B's Capital A/c

 

 

 

24,000

 

(Being adjustment of A's and B's share of goodwill made)

 

 

 

 

 

 

 

 

 

 

 

Working Notes:

1.

 Calculation of Gaining Ratio

 

 

A's retires from the firm. Gaining Ratio = New Ratio - Old Ratio

2.

 Calculation of Retiring Partner's share of Goodwill

A's and B's share of goodwill be brought by C only.

C's Capital A/c debited=72,000 + 24,000 = Rs.96,000.

 

Solution Ex. 27

 

 

Revaluation A/c

Dr.

 

Cr.

Particulars

 

Rs. 

Particulars

Rs. 

To Stock A/c

 

10,000

By Furniture A/c

12,000

To Machinery A/c

 

5,000

By Investment A/c

10,000

To Provision for D. Debts A/c

 

2,000

By Bills Payable A/c

1,000

To Profit transferred to:

 

 

 

 

 

X's Capital A/c

3,000

 

 

 

 

Y's Capital A/c

1,800

 

 

 

 

Z's Capital A/c

1,200

6,000

 

 

 

 

23,000

 

23,000

 

 

Journal

Sr. No.

Particulars

 

L.F.

Debit

Rs. 

Credit

Rs. 

i.

Furniture A/c

Dr.

 

12,000

 

 

----------To Revaluation A/c

 

 

 

12,000

 

(Being increase in value transferred to Revaluation Account) 

 

 

 

 

 

 

 

 

 

 

ii.

Revaluation A/c

Dr.

 

10,000

 

 

----------To Stock A/c

 

 

 

10,000

 

(Being decrease in stock transferred to Revaluation)

 

 

 

 

 

 

 

 

 

 

iii.

Revaluation A/c

Dr.

 

5,000

 

 

----------To Machinery A/c

 

 

 

5,000

 

(Being decrease in value of machinery transferred to Revaluation Account)

 

 

 

 

 

 

 

 

 

 

iv.

Revaluation A/c

Dr.

 

2,000

 

 

----------To Provision for Doubtful debts A/c

 

 

 

2,000

 

(Being increase in liabilities to Revaluation Account)

 

 

 

 

 

 

 

 

 

 

v.

Investment A/c

Dr.

 

10,000

 

 

----------To Revaluation A/c

 

 

 

10,000

 

(Being increase in value transferred to Revaluation Account)

 

 

 

 

 

 

 

 

 

 

vi.

Bills Payable A/c

Dr.

 

1,000

 

 

----------To Revaluation A/c

 

 

 

1,000

 

(Being decrease in liabilities transferred to Revaluation Account)

 

 

 

 

 

 

 

 

 

 

vii.

Revaluation A/c

Dr.

 

6,000

 

 

----------To X's Capital A/c

 

 

 

3,000

 

----------To Y's Capital A/c

 

 

 

1,800

 

----------To Z's Capital A/c

 

 

 

1,200

 

(Being Revaluation Profit transferred to Partners' Capital Account)

 

 

 

 

 

 

 

 

 

 

 

 

T. S. Grewal Solution for Class 12 Commerce Accountancy Chapter 5 - Retirement/Death of a Partner Page/Excercise 5.83

Solution Ex. 28

 

Revaluation Account

Dr.

 

Cr.

Particulars

 

Rs. 

Particulars

Rs. 

To Plant and Machinery A/c (40,000×10%)

 

4,000

By Building A/c (1,00,000×20%)

20,000

To Provision for Doubtful Debts A/c

 

1,000

By Stock of finished Goods A/c

5,000

To Stock of Raw Material A/c

 

2,000

By Computer A/c

2,000

To Workmen's Compensation Claim A/c

 

5,000

 

 

To Profit transferred to:

 

 

 

 

 

A's Capital A/c

6,000

 

 

 

 

B's Capital A/c

6,000

 

 

 

 

C's Capital A/c

3,000

15,000

 

 

 

 

27,000

 

27,000

 

 

Journal

Date

Particulars

 

L.F.

Debit

Rs. 

Credit

Rs. 

 

Building A/c

Dr.

 

20,000

 

 

Stock of Finished Good A/c

Dr.

 

5,000

 

 

Computer A/c

Dr.

 

2,000

 

 

---------To Revaluation A/c

 

 

 

27,000

 

(Being increase in value Assets transferred to Revaluation Account) 

 

 

 

 

 

 

 

 

 

 

 

Revaluation A/c

Dr.

 

12,000

 

 

---------To Plant and Machinery A/c

 

 

 

4,000

 

---------To Provision for Doubtful Debts A/c

 

 

 

1,000

 

---------To Stock of Raw Material A/c

 

 

 

2,000

 

---------To Workmen's Companion Claim A/c

 

 

 

5,000

 

(Being increase in value Assets transferred to Revaluation Account)

 

 

 

 

 

 

 

 

 

 

 

Revaluation A/c

Dr.

 

15,000

 

 

---------To A's Capital A/c

 

 

 

6,000

 

---------To B's Capital A/c

 

 

 

6,000

 

---------To C's Capital A/c

 

 

 

3,000

 

(Being Revaluation Profit transferred to Partners' Capital account)

 

 

 

 

 

 

Solution Ex. 29

Revaluation of assets and liabilities is made at the time of Ramesh's retirement and not after his retirement. Therefore, profits on revaluation will be distributed among all the partners in their old profit sharing ratio or equally in absence of partnership deed.

 

 

Journal

Particulars

 

L.F.

Debit

Rs. 

Credit

Rs. 

Revaluation A/c

Dr.

 

12,000

 

----------To Ramesh's Capital A /c

 

 

 

4,000

----------To Mohan's Capital A/c

 

 

 

4,000

----------To Rahul-s Capital A/c

 

 

 

4,000

(Being Revaluation profit distributed among all the partners in their old ratio)

 

 

 

 

 

 

 

 

 

 

 

Solution Ex. 30

 

Journal

Particulars

 

L.F.

Debit

Rs. 

Credit

Rs. 

General Reserve A/c

Dr.

 

1,80,000

 

Workmen Compensation Reserve A/c

Dr.

 

24,000

 

----------To X's Capital A/c

 

 

 

1,02,000

----------To Y's Capital A/c

 

 

 

68,000

----------To Z's Capital A/c

 

 

 

34,000

(Being Accumulated Profit distributed among partners in old ratio)

 

 

 

 

 

 

 

 

 

 X's Capital A/c

Dr.

 

15,000

 

 Y's Capital A/c

Dr.

 

10,000

 

 Z's Capital A/c

Dr.

 

5,000

 

----------To Profit and Loss A/c

 

 

 

30,000

(Being Debit balance in profit and Loss account distributed among partners in old ratio)

 

 

 

 

 

 

 

 

 

 

Working Notes:

1.

Total Credit Balance of Reserves

= General Reserve + Workmen Compensation Reserve

=1,80,000+24,000

=2,04,000

Distribution of Reserves 

2.

Distribution of Debit Balance of Profit and Loss A/c

Note: Employees' Provident fund being a liability will not be distributed.

Solution Ex. 31

 

Journal

Particulars

 

L.F.

Debit

Rs. 

Credit

Rs. 

Asha's Capital A/c

Dr.

 

40,000

 

Naveen's Capital A/c

Dr.

 

24,000

 

Shalini's Capital A/c

Dr.

 

16,000

 

---------To Goodwill A/c

 

 

 

80,000

(Being Existing goodwill written off amongst existing partners in old ratio)

 

 

 

 

 

 

 

 

 

General Reserve A/c

Dr.

 

40,000

 

----------To Asha's Capital A/c

 

 

 

20,000

----------To Naveen's Capital A/c

 

 

 

12,000

----------To Shalini's Capital A/c

 

 

 

8,000

(Being General Reserve distributed among all partners in old ratio)

 

 

 

 

 

 

 

 

 

Shalini's Capital A/c

Dr.

 

48,000

 

---------To Asha's Capital A/c

 

 

 

12,000

---------To Naveen's capital A/c

 

 

 

36,000

(Being Goodwill adjusted by debiting gaining partners and crediting sacrificing and retiring partner)

 

 

 

 

 

Calculation of Gaining Ratio

Gaining Ratio =New share - Old Share

 

T. S. Grewal Solution for Class 12 Commerce Accountancy Chapter 5 - Retirement/Death of a Partner Page/Excercise 5.84

Solution Ex. 32

 

Journal

Date

Particulars

 

L.F.

Debit

Rs.

Credit

Rs. 

 

 

 

 

 

 

 

Ram's Capital A/c

Dr.

 

90,000

 

 

Laxman's Capital A/c

Dr.

 

60,000

 

 

Bharat's Capital A/c

Dr.

 

30,000

 

 

--- To Goodwill A/c

 

 

 

1,80,000

 

(Being goodwill written off)

 

 

 

 

 

 

 

 

 

 

 

Ram's Capital A/c

Dr.

 

42,000

 

 

Bharat's Capital A/c

Dr.

 

42,000

 

 

--- - To Laxman's Capital A/c

 

 

 

84,000

 

(Being adjustment of Laxman's share of goodwill)

 

 

 

 

 

 

 

 

 

 

 

Profit and Loss Appropriation A/c

Dr.

 

1,20,000

 

 

------- To Ram's Capital A/c

 

 

 

80,000

 

-- To Bharat's Capital A/c

 

 

 

40,000

 

(Being profit on revaluation transferred to 'Partners Capital A/c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Working Notes :

1.

 Calculation of Gaining Ratio

Old Ratio (Ram,  Laxman and Bharat) = 3:2:1

New Ratio (Ram and Bharat) = 2:1

Gaining Ratio = New Ratio - Old Ratio

Gaining Ratio (Ram and Bharat) = 1:1

 

2.

 Calculation of Retiring Partner's share of goodwill

Laxman's share of goodwill is to be debited to remaining partners Capital A/c in their Gaining ratio (Ram, Bharat) = 1:1 

Solution Ex. 33

 

C's Capital Account

Dr.

Cr.

Particulars

Rs. 

Particulars

 

Rs. 

To C's Loan A/c

7,700

By Balance b/d

6,000

 

 

By C's Current A/c

1,700

 

 

 

 

 

7,700

 

7,700

 

 

 

C's Current Account

Dr.

Cr.

Particulars

Rs. 

Particulars

Rs. 

To Balance b/d

500

By Profit and Loss Suspense A/c

 

550

To C's Capital A/c (Balancing fig.)

1,700

By D's Current A/c

1650

 

 

 

 

 

2,200

 

2,200

Working Notes:

 

Solution Ex. 34

 

Revaluation Account

Dr.

Cr.

Particulars

Rs. 

Particulars

 

Rs. 

To Bad Debts A/c

2,000

By Loss Transferred to:

 

 

To Patents A/c

9,000

 

X's Capital A/c

4,400

 

 

 

 

Y's Capital A/c

4,400

 

 

 

 

Z's Capital A/c

2,200

11,000

 

11,000

 

 

11,000

 

 

Partners Capital Account

Dr.