CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set B

Question : What is the need and required entry to be passed in the books of the firm for distribution of specifi c reserve or fund?
Answer : If specific reserve or funds like Workmen’s Compensation Fund, Investment Fluctuation Fund, etc. Are more in value than the actual liability or if liability does not exist, they should be distributed among all partners (including the retiring partner) in their old profi t-sharing ratio. 

Question :  What are the rights of a Retiring partner after retiring from the firm?
Answer :  The rights of a retiring partner are as follows :
(i) An outgoing partner may carry on a business competing with that of the firm but he must not use the firm’s name, must not represent that he is carrying on the business of the firm and must not solicit the customers of the firm.
(ii) If on retirement, the accounts of the firm are not settled and the outgoing partner is not paid his dues, he is entitled to a share in the profits even after his retirement or interest at the rate of 6% on the amount of his share in the firm.

Question : A, B, C and D share profits in the ratio of 3 : 2 : 3 : 2. A retires and the goodwill of the firm is valued at Rs. 1,20,000. The remaining partners decide to share profits as 3 :1: 6 among themselves.

Question : A,B and C were partners in a firm. C died on 28th Feb 2014. His share of profit from the closure of the last accounting year till the date of death was to be calculated on the basis of the average profit of three complete years before death, profit for 2011 2012 and 2013 were Rs. 1400 and Rs. 1600 and Rs. 1800 respectively.

Calculate C’s share of profit till his death.

Ans:- Average profit =14,000 +16,000 +18,000

               3

=48,000/3 = 16000

Estimate profit till the date of death = 16,000 X = 2666.66 C’s share of estimated profit = 2666.66 x = 888.8

Question : If profit till the date of death are to be ascertained A B and sharing profit in the ratio of 2:2:1

B died on 31st March 2014,Accounting are closing on December sales for the year 2013 amounted to Rs. 9,00,000 , sales of Rs. 3,00,000 amounted between the period from 1 Jan 2014 to 31 March 2014. The profit for the year 2013  amounted to Rs. 90,000.

Calculate deceased partner’s share in the Profit of the firm.

Solution:- % of profit to sale for the year 2013 = X 100 = 10%

Profit up to death 10% of 3,00,000 i.e. 30,000

B’s share 30,000 X = 12,000

                Or

X 3,00,000 = 30,000

Question : A B and C are partners sharing profit and losses in the ratio 2:2:1 . C died on 31st March 2014 profit and sales for the calendar year 2013 were Rs. 3,00,000 and Rs. 30,00,000 respectively. Sales during Jan to March 2014 were 4,50,000. Calculate share and profit of C up to date of death.

Hint:- C’s share 9,000. 

Question : D P and G were partner in a firm sharing profit and losses in the ratio of 5:3:2 . P died on 31May 2013 his share of profit from the closure of the last accounting year to the date of death , was to be calculated on the basis of the average of three completed years of profit, before death, profit for the years ended 31stdec 2010,2011,2012 were Rs. 51,000 Rs. 45,000 and 39,000 respectively.

Calculate P’s share of profit.

Hint:- Rs. 5,625

Question : A, B and c are partners in a firm sharing profits and losses in the ratio of 3:2:1. B died on January 2016. C, the son of B, is of the opinion that he is rightful owner of his father’s share of profits, and the profits of the firm be shared between A and c equally. A does not agree. Settle the dispute between A and c and decide the profit sharing ratio for them.