Cash Settlement with Retiring Partner

Q.

Explain the different types of debentures?

Q.

Following are the Balance Sheets of X Ltd. for two years. Prepare a Cash Flow statement:
$$\begin{array}{ccccc}\text{Particulars}& \text{Note}& 31-03-2018& 31-03-2017& \\ & \text{No.}& & & \\ \text{(I) Equity and Liabilities:}& & & & \\ \left(1\right)\text{Shareholder's Fund:}& & & & \\ \text{(a) Share Capital}& & 3,00,000& 2,00,000& \\ \text{(b) Reserve and surplus}& & 80,000& 30,000& \\ \left(2\right)\text{Non- Current Liabilities:}& & & & \\ \text{Long term Borrowings}& 1& -& 75,000& \\ \left(3\right)\text{Current Liabilities:}& & & & \\ \left(a\right)\text{Short term Borrowings}& 2& 25,000& 37,000& \\ \left(b\right)\text{Trade Payables}& & 1,50,000& 96,000& \\ \left(c\right)\text{Short term (Provision for Tax)}& & \underset{–}{15,000}& \underset{–}{12,000}& \\ \text{Total}& & \underset{–}{5,70,000}& \underset{–}{4,50,000}& \\ \text{II. Assets:}& & & & \\ \text{(1) Non - Current Assets:}& & & & \\ \text{Fixed Assets}& 3& 3,40,000& 3,00,000& \\ \text{(2) Current Assets}& & & & \\ \left(a\right)\text{Current Investments (Short-term Investments)}& & 30,000& 20,000& \\ \left(b\right)\text{Inventory}& & 90,000& 60,000& \\ \left(c\right)\text{Trade Receivables}& & 97,000& 65,000& \\ \left(d\right)\text{Cash and Cash Equivalents}& & \underset{–}{13,000}& \underset{–}{5,000}& \\ \text{Total}& & \underset{–}{5,70,000}& \underset{–}{4,50,000}& \end{array}$$
Notes:
(1) $$\begin{array}{cccc}\text{Long - term Borrowings:}& 31-03-2018& 31-03-2017& \\ 15\%\text{Loan}& \text{-}& 75,000& \\ & & & \\ \left(2\right)\text{Short-term Borrowings:}& & & \\ \text{Bank Overdraft}& \underset{–}{25,000}& \underset{–}{37,000}& \\ & & & \\ \left(3\right)\text{Fixed Assets:}& & & \\ \text{Plant and Machinery}& 4,00,000& 3,50,000& \\ (-)\text{Accumulated Depreciation}& \underset{–}{60,000}& \underset{–}{50,000}& \\ & \underset{–}{3,40,000}& \underset{–}{3,00,000}& \end{array}$$
Additional Information:

(1) $$\begin{array}{ccc}& 31-03-2018& 31-03-2017\\ & \text{Rs.}& \text{Rs.}\\ \text{Contingent Liability:}& & \\ \text{Proposed Dividend}& 30,000& 20,000\end{array}$$
(2) Loan was repaid on 1st April, 2017

Q. Ram, Mohan and Sohan were partners sharing profits in the ratio of 1/5, 1/3 and 7/15 respectively. Sohan retires and his share was taken by Ram and Mohan in the ratio of 3:2. Find out the new ratio.

Q.

Why a retiring/deceased partner is entitled to a share of goodwill of the firm?

Q.

A, B, and C are partners in the firm sharing profits in the ratio of 3 : 2 : 1. B retired and his share was divided equally between A and C. Calculate the new profit sharing ratio of A and C.

1. 3:2

2. 2:1

3. 3:1

4. None of these

Q. On retirement of a partner, goodwill appears in the balance sheet , it will be written-off by debiting the capital accounts of partners.

1. outgoing
2. all
3. remaining
4. new

Q.

Under which sub-headings will the following items be shown in the Balance Sheet of a company as per Revised Schedule VI, Part of the Companies Act, 1956 (now Schedule III, Part I of the Companies Act, 2013).
(i) Long-term loan (ii) Capital Redemption Reserve.
(iii) Short-term provision (iv) Goodwill.
(v) Provision for warranties. (vi) Brand/Trade-marks.

Q. Sita, Geeta and Meeta were partners in a firm sharing profits in the ratio of 7:6:7. Geeta retired and her share was divided equally between Sita and Meeta. Calculate the new profit-sharing ratio of Sita and Meeta.

Q.

P and Q are partners sharing profits in 2:1 ratio. They admitted R into partnership giving him 1/5 share which he acquired from P and Q in 1:2 ratio. Calculate new profit sharing ratio?

Q.

A, B, C were partners in a firm sharing profits in 3:2:1 ratio. They admitted D for 10% profits. Calculate the new profit sharing ratio?

Q. The revaluation loss is shown on the debit side of partner's account.

1. goodwill
2. bank
3. capital
4. loan

Q. X and Y are in partnership sharing profits in the ratio of 2 : 3 . With effect from 1st April, 2018, they agreed to share profits in the ratio f 1 : 2 . For this purpose, goodwill of the firm is to be valued at two years purchase of the average profit of last three years , which were ₹ 1, 50, 000; ₹ 1, 60, 000 and ₹ 2, 00, 000 respectively. The reserves appear in the books at ₹ 1, 10, 000. Partners decide to continue showing Reserves in the books . You are required to give effect to the change by passing a single journal entry.

Q.

Interest accrued but not due on loan should be included under?

Q.

Amit, Sumit, and Punit share profit and losses in the ratio of 3:2:1, respectively. Amit retires and the remaining partners decide to take Amit’s share in the existing ratio i.e. 2:1. Calculate the new ratio.

1. None of the above

2. 1:2

3. 2:1

4. 1:1

Q.

Radha and Rukmani are partners in a firm sharing profits in 3:2 ratio. They admitted Gopi as a new partner. Radha surrendered 1/3 of her share in favour of Gopi and Rukmani surrendered 1/4 of her share in favour of Gopi. Calculate new profit sharing ratio?

Q.

A, B and C were partners in a firm sharing profits in 3:3:2 ratio. They admitted D as a new partner for 4/7 profit. D acquired his share 2/7 from A. 1/7 from B and 1/7 from C. Calculate new profit sharing ratio?

Q.

We transfer revaluation profit to partner's capital in which ratio in case of retirement of a partner?

1. None of the above

2. Nethier A nor B

3. withdrawn

4. brought in

Q. When accumulated reserve is transferred to partner’s capital account at the time of retirement. Then, we debit the account and credit the account.

1. bank
2. partner's loan
3. accumulated reserve
4. partner's capital

Q. A, B, C and D were partners in a firm sharing profits in 5:3:2:2 ratio. B and C retired from the firm . Bs share was acquired by D and Cs share was acquired by A . Calculate new profit-sharing ratio of A and D .

Q.

Rao and Swami are partners in a firm sharing profits and losses in 3:2 ratio. They admit Ravi as a new partner for 1/8 share in the profits. The new profit sharing ratio between Rao and Swami is 4:3. Calculate new profit sharing ratio and sacrificing ratio?

Q.

A and B were partners in a firm sharing profits and losses in the ratio of 3:2. They admit C into the partnership with 1/6 share in the profits. Calculate the new profit sharing ratio?

Q.

The claim of the retiring partner is payable in which of the following form(s)?

1. Any of the above method

2. Partly in cash and partly as loan repayable later with agreed interest.

3. Fully transferred to loan account to be paid later with some interest on it.

4. Fully in cash.

Q.

A and B were partners in a firm sharing profits in 3:2 ratio. They admitted C for 3/7 share which he took 2/7 from A and 1/7 from B. Calculate new profit sharing ratio?

Q. The retiring partner's account is debited when the sum due to him is paid.

1. loan
2. bank
3. capital
4. reserve

Q.

Pinky, Qumar and Roopa partners in a firm sharing profits and losses in the ratio of 3:2:1. S is admitted as a new partner for 1/4 share in the profits of the firm, whichs he gets 1/8 from Pinky, and 1/16 each from Qmar and Roopa. The total capital of the new firm after Seema’s admission will be Rs 2, 40, 000. Seema is required to bring in cash equal to 1/4 of the total capital of the new firm. The capitals of the old partners also have to be adjusted in proportion of their profit sharing ratio. The capitals of Pinky, Qumar and Roopa after all adjustments in respect of goodwill and revaluation of assets and liabilities have been made are Pinky Rs 80, 000, Qumar Rs 30, 000 and Roopa Rs 20, 000. Calculate the capitals of all the partners and record the necessary journal entries for doing adjustments in respect of capitals according to the agreement between the partners?

Q.

Current Ratio is 3.5:1. Working Capital is Rs 90, 000. Calculate the amount of Current Assets and Current Liabilities.

Q.

How is depreciation treated in the balance sheet?

Q. State whether the following statements are true or false :

Revaluation account is also called Realisation account.

Q. A, B and C are partners in the ratio of $3:2:1$. W is admitted with a $1/6$th share in profits. C would retain his original share. The new profit sharing ratio will be ______.

1. $8:12:5:5$
2. $10:6:4:4$
3. $12:8:5:5$
4. None of these

Q. A and B are partners sharing profits and losses in the ratio of $3:2$. They admit C into the partnership for one-fourth share of the profits while A and B as between themselves are sharing profits & losses equally. The new profit sharing ratio will be _______.

1. NR $3:3:2$, SR $1:9$
2. NR $4:2:2$, SR $9:1$
3. NR $3:3:2$, SR $9:1$
4. None of these