Retirement of a Partner Class 12 MCQ with Answer are covered in this Article. Retirement of a Partner Class 12 MCQ Test contains 22 questions. Answers to MCQ on Retirement of a Partner Class 12 Accountancy are available at the end of the last question. These MCQ have been made for Class 12 students to help check the concept you have learnt from detailed classroom sessions and application of your knowledge.
Retirement of a Partner Class 12 MCQ
1.A , B and C are partners sharing profits and losses in the ratio of (1/5) :(2/5):(2/5). A retired from the firm and on the date of retirement his capital was Rs. 300000; Balance of General Reserve- Rs. 400000 and Profit on Revaluation of assets and liabilities-Rs. 30000. What is the amount due to A on his retirement?
(a) Rs. 386000
(b) Rs. 472000
(c) Rs. 304500
(d) Rs. 304500
Answer
Answer: (a) Rs. 386000
Explanation: Amount due to A:
Balance of his Capital Account = Rs. 300000
Share in General Reserve- Rs. = 400000 X (1/5) = Rs. 80000
Share in Revaluation = 30000 X (1/5) = Rs. 6000
Total = Rs. 386000
2.A , B and C are partners sharing profits and losses in the ratio of (3/.6):(2/6):(1/6) B retired from the firm. What will be the gaining ratio between the remaining partners?
(a) 2 : 1
(b) 3 : 2
(c) 3 : 1
(s) 5 : 1
Answer
Answer: (c) 3 : 1
Explanation: New Ratio between A and C after retirement of B = (3/4) :(1/4)
Gaining Ratio = New Ratio – Old Ratio
A’s Gaining Ratio = (3/4) -(3/6)=(9−6)/12=3/12
N’s Gaining Ratio = (1/4) -(1/6)= (3−2)/12=1/12
Gaining Ratio = 3 : 1
3.D , E and F are partners sharing profits and losses in the ratio of (1/4):(1/4):(2/4) . E retired from the firm. What will be the gaining share of D ?
(a) 1/4
(b) 1/3
(c) 1/12
(d) None of the above
Answer
Answer: (c) 1/12
Explanation: New Ratio between D and F after retirement of E = (1/3) :(2/3)
D’s Gaining Share = (1/3) -(1/4)= (4−3)/12=1/12
4.A , B and C are partners sharing profits and losses in the ratio of (2/4):(1/4):(1/4). B retired from the firm. What will be the gaining share of C ?
(a) 1/12
(b) 2/3
(c) 1/3
(d) None of the above
Answer
Answer: (a) 1/12
Explanation: New Ratio between A and C after retirement of B = (2/3) :(1/3)
C’s Gaining Share = (1/3) -(1/4)=(4−3)/12=1/12
5.C , D and E are partners sharing profits and losses in the ratio of 2 : 1 : 1. E retired from the firm and surrendered (1/3) th of his share of profit to C and remaining in favour of D. Calculate the gaining share of D.
(a) 2/12
(b) 1/12
(c) 2/4
(d) None of the above
Answer
Answer: (a) 2/12
Explanation: Old ratio between C , D and E = 2 : 1 : 1
Share surrendered by E in favour of C = (1/4) X(1/3)=1/12
Share surrendered by E in favour of D = (1/4) -(1/12) = (3−1)/12=2/12
6.C , D and E are partners sharing profits and losses in the ratio of 2 : 1 : 1. E retired from the firm and surrendered(1/5)th of his share of profit to C and remaining in favour of D. Calculate the new profit sharing ratio of C and D.
(a) 11 : 9
(b) 9 : 11
(c) 2: 1
(d) None of the above
Answer
Answer: (a) 11 : 9
Explanation: Old ratio between C , D and E = 2 : 1 : 1
Share surrendered by E in favour of C = (1/4) X(1/5)=1/20
Share surrendered by E in favour of D = (1/4) -(1/20) = (5−1)/20=4/20
New share of C = (2/4) +(1/20)= (10+1)/20=11/20
New share of D = (1/4) + (4/20) =(5+4)/20=9/20
New ratio = (11/20) :(9/20)
= 11 : 9
Retirement of a Partner Class 12 MCQ
7.D , E and F are partners sharing profits and losses in the ratio of 2 : 3 : 2. F retired from the firm and surrendered (2/9)th of his share of profit to D and remaining in favour of E. What will be the gaining ratio between D and E ?
(a) 3 : 2
(b) 4 : 14
(c) 2: 3
(d) None of the above
Answer
Answer: (b) 4 : 14
Explanation: Old ratio between D E and F = 2 : 3 : 2
Share surrendered by F in favour of D = (2/7) X(2/9)=4/63
Share surrendered by F in favour of E = (2/7) -(4/63) = (18−4)/63= 14
Gaining ratio = The ratio in which the continuing partners acquire the outgoing (retired ) partner share
New share – Old share
Gaining ratio between D and E = (4/63) :(14/63)
= 4 : 14
8.E , F and G are partners sharing profits and losses in the ratio of 2 : 2 : 3. G is retired from the firm and his share is taken by E and F in the ratio of 4 : 3. What will be the new profit sharing ratio ?
(a) 26 : 23
(b) 2 : 3
(c) 2 : 23
(d) None of the above
Answer
Answer: (a) 26 : 23
Explanation: Old ratio between E , F and G = 2 : 2 : 3
G’s share taken by E = (3/7) X(4/7)=12/49
G’s share taken by F = (3/7) X (3/7) = 9/49
New share of E = (2/7) + (12/49) = (14+12)/49=26/49
New share of F = (2/7) + (9/49) = (14+9)/49=23/49
New ratio = (26/49) :(23/49)
= 26 : 23
9.E , F and G are partners sharing profits and losses in the ratio of 3 : 1 : 1. G is retired from the firm and his share is taken by E and F in the ratio of 2 : 1. What will be the new share of A?
(a) 3/5
(b) 11/5
(c) 1/8
(d) None of the above
Answer
Answer: (b) 11/5
Explanation: Old ratio between E, F and G = 3 : 1 : 1
G’s share taken by E = (1/5) X (2/3) = 2/15
New share of E = (3/5) + (2/15) = (9+2)/15 = 11/15
10.E , F and G are partners sharing profits and losses in the ratio of 3 : 5 : 1. G retired from the firm and E and F decide to share future profits and losses in the ratio of 3 : 5. What will be the gaining ratio between partners?
(a) 3 : 3
(b) 3 : 5
(c) 3 : 6
(d) None of the above
Answer
Answer: (b) 3 : 5
Explanation: Old ratio between E , F and G = (3/9) :(5/9):(1/9)
New ratio between E and F = (3/8) :(5/8)
Gaining ratio = New ratio – Old ratio
For E (3/8) -(3/9) = (27−24)/72 = 3/72
For F (5/8) -(5/9)= (45−40)/72=5/72
= 3 : 5
11.E , F and G are partners sharing profits and losses in the ratio of 4 : 2 : 1. G retired from the firm and E and F decide to share future profits and losses in the ratio of 5 : 3. What will be the gaining share of E ?
(a) 4/7
(b) 3/56
(c) 5/8
(d) None of the above’
Answer
Answer: (b) 3/56
Explanation: Old ratio between E , F and G = (4/7) :(2/7) :(1/7)
New ratio between E and F = (5/8) : (3/8)
Gaining ratio = New ratio – Old ratio
Gaining Share of E (5/8) -(4/7)=(35−32)/56= 3/56
12. H , I and J are partners sharing profits and losses in the ratio of 5 : 1 : 1. J retired from the firm and H and I decide to share future profits and losses in the ratio of 1 : 2. What will be the gaining share of I ?
(a) 5/7
(b) 1/3
(c) 11/21
(d) None of the above
Answer
Answer: (c) 11/21
Explanation: Old ratio between H , I and J = (5/7) :(1/7) :(1/7)
New ratio between H and I = (1/3) :(2/3)
Gaining ratio = New ratio – Old ratio
Gaining Share of H (2/3) -(1/7)= (14−3)/21= 11/21
Retirement of a Partner Class 12 MCQ
13.F , G and H are partners sharing profits and losses in the ratio of 3 : 4 : 2. B has retired from the firm and his share is taken by C. What will be the new profit sharing ratio between partners?
(a) 4 : 2
(b) 3 : 7
(c) 3 : 4
(d) None of the above
Answer
Answer: (b) 3 : 7
Explanation: C’s new share of profit = Old share + Share taken from B
= (3/9) + (4/9)
= (3+4)/9
= 7/9
F’s new share of profit = (3/9) Same as before
New ratio of F and C = (3/9) :(7/9)
= 3 : 7
14.E , F and G were partners sharing profits and losses in the ratio of 2 : 2 : 1 respectively. G is retired from the firm and his capital on the date of retirement was Rs. 40000; Profit on Revaluation of assets and liabilities was Rs. 25000 and General Reserve was Rs. 5000. What will be the journal entry for the payment of amount due to G ?
(a)G’s Capital A/c Dr 41000
To Bank A/c 41000
(b)G’s Capital A/c Dr 46000
To Bank A/c 46000
(c) G’s Capital A/c Dr 40000
To Bank A/c 40000
(d) None of the above
Answer
Answer: (b)G’s Capital A/c Dr 46000
To Bank A/c 46000
Explanation: Calculation of total amount due to G :
Balance of Capital on Retirement = Rs. 40000
Share in General Reserve = 5000 X (1/5) = Rs. 1000
Share in Revaluation = 25000 X (1/5) = Rs. 5000
Total amount due = Rs. 46000
G’s Capital A/c Dr 46000
To Bank A/c 46000
15.F , G and H are partners sharing profits and losses in the ratio of 4 , 3 and 3 respectively. G retired from the firm and his capital on the date of retirement was Rs. 100000, Profit on Revaluation of assets and liabilities was Rs. 20000 and General Reserve Rs. 10000\. What will be the journal entry for the payment of amount due to G ?
(a)G’s Capital A/c Dr 109000
To Bank A/c 109000
(b)G’s Capital A/c Dr 100000
To Bank A/c 100000
(c) G’s Capital A/c Dr 103000
To Bank A/c 103000
(d) None of the above
Answer
Answer: (a)G’s Capital A/c Dr 109000
To Bank A/c 109000
Explanation: Calculation of total amount due to G :
Balance of Capital on Retirement = Rs. 100000
Share in General Reserve = 10000 X (3/10) = Rs. 3000
Share in Revaluation = 20000 X (3/10) = Rs. 6000
Total amount due = Rs. 109000
G’s capital A/c Dr 109000
To Bank A/c 109000
16.E , F and G are partners sharing profits and losses in the ratio of 3 , 1 and 1 respectively. F retired from the firm and his capital on the date of retirement was Rs. 100000, Profit on Revaluation of assets and liabilities was Rs. 25000 and General Reserve was Rs . 30000. Amount due to F will be paid in 4 equal annual instalments. The journal entry for each instalment will be:
(a) F’s Loan A/c Dr 100000
To Bank A/c 100000
(b) F’s Loan A/c Dr 27750
To Bank A/c 27750
(c) F’s Loan A/c Dr 106000
To Bank A/c 106000
(d) None of the above
Answer
Answer: (b) F’s Loan A/c Dr 27750
To Bank A/c 27750
Explanation: Calculation of total amount due to F :
Balance of Capital on Retirement = Rs. 100000
Share in General Reserve = 30000 X (1/5) = Rs. 6000
Share in Revaluation = 25000 X (1/5) = Rs. 5000
Total amount due = Rs. 111000
Yearly instalment = 111000/4 = Rs. 27750
F’s Loan A/c Dr 27750
To Bank A/c 27750
17.E , F and G are partners sharing profits and losses in the ratio of 3 , 4 and 5 respectively. F retired from the firm and his capital on the date of retirement was Rs. 120000, Profit on Revaluation of assets and liabilities was Rs. 24000 and General Reserve was Rs. 12000. What will be the journal entry for transferring the amount due to F in his loan account?
(a) F’s Loan A/c Dr 132000
To Bank A/c 132000
(b) F’s Loan A/c Dr 120000
To Bank A/c 120000
(c) F’s Loan A/c Dr 124000
To Bank A/c 124000
(d) None of the above
Answer
Answer: (a) F’s Loan A/c Dr 132000
To Bank A/c 132000
Explanation: Calculation of total amount due to F :
Balance of capital on retirement = Rs. 120000
Share in General Reserve = 12000 X (4/12) = Rs. 4000
Share in Revaluation = 24000 X (4/12) = Rs. 8000
Total amount due = Rs. 132000
F’s Capital A/c Dr 132000
To F s Loan A/c 132000
18.E , F and G are partners sharing profits and losses in the ratio of 2 , 3 and 3 respectively. F retired from the firm and adjusted capitals of E and G on the date of retirement was Rs. 80000 and Rs. 100000 respectively. It was decided to adjust the capitals of E and G in there profit sharing ratio. What will be the necessary journal entry to record cash brought or withdrawal by remaining partners?
(a) E’s Capital Dr 8000
To Cash/Bank A/c 8000
Cash/Bank A/c Dr 8000
To G’s Capital 8000
(b)E’s Capital Dr 8000
To Cash/Bank A/c 8000
Cash/Bank A/c Dr 108000
To G’s Capital A/c 108000
(c)E’s Capital Dr 8000
To Cash/Bank A/c 8000
Cash/Bank A/c Dr 8000
To G’s Capital A/c 8000
(d) None of the above
Answer
Answer: (c)
E’s Capital Dr 8000
To Cash/Bank A/c 8000
Cash/Bank A/c Dr 8000
To G’s Capital A/c 8000
Explanation: New ratio between E and G after the retirement of F = (2/5) :(3/5)
Total capital of the new firm = Adjusted capital of E + Adjusted capital of G
= 80000 + 100000
= Rs. 180000
New capital of continuing partners and Surplus/ Deficiency:
New Capital of E = Rs. 72000 ( 180000 X (2/5) )
Less: Adjusted capital of E = Rs. 80000
Surplus = Rs. -8000
G = Rs. 108000 ( 180000 X (3/5) )
Less: Adjusted capital of G = 100000
Deficiency = Rs. 8000
E’s Capital A/c Dr 8000
To Cash/Bank A/c 8000
Cash/Bank A/c Dr 8000
To G’s Capital A/c 8000
Retirement of a Partner Class 12 MCQ
19.E , F and G are partners sharing profits in the ratio of 4 , 1 and 1. G retired from the firm on following terms: Plant and Machinery increased by Rs. 15000 , Stock decreased by Rs. 1000 and there was an unrecorded liability for Workmen Compensation claim for Rs. 5000. The journal entry for recording effect of revaluation of assets and liabilities into partners capital account will be:
(a) Revaluation A/c Dr 9000
To E’s capital A/c 6000
To F’s capital A/c 1500
To G’s capital A/c 1500
(b)
Revaluation A/c Dr 9000
To E’s capital A/c 1500
To F’s capital A/c 1500
To G’s capital A/c 6000
(c)
Revaluation A/c Dr 9000
To E’s capital 1500
To F’s capital 1500
To G’s capital 6000
(d) None of the above
Answer
Answer: (a) Revaluation A/c Dr 9000
To E’s capital A/c 6000
To F’s capital A/c 1500
To G’s capital A/c 1500
Explanation:
Revaluation Account
20.E , F and G are partners sharing profits and losses in the ratio of 4 , 1 and 1 respectively. After all adjustments on F’s retirement with respect to General Reserve , Goodwill and Revaluation etc. the balances in their capital accounts stood at Rs. 100000 , Rs. 50000 and Rs. 70000 respectively. It was decided that the amount payable to F will be brought by E and G in such a way as to make their capital proportionate to their profit sharing ratio. What will be the amount to be brought in by E and G ?
(a) E will bring Rs. 76000
G will withdraw Rs. 6000
(b) E will bring Rs. 76000
G will bring Rs. 6000
(c) E will withdraw Rs. 6000
G will withdraw Rs. 76000
(d) None of the above
Answer
Answer: (a) E will bring Rs. 76000
G will withdraw Rs. 6000
Explanation: Adjusted old capitals of continuing partners i.e E and G = Rs. 100000 and Rs. 50000
Calculation of total capital of the new firm:
Adjusted capital of E = Rs. 100000
Adjusted capital of G = Rs. 50000
Amount payable to F = Rs. 70000
Total capital of new firm = Rs. 220000
New profit sharing ratio between E and G after retirement of F = 4 : 1
Calculation of new capitals of the continuing partners:
E’s new capital = 220000 X (4/5) = Rs. 176000
G’s new capital = 220000 X (1/5) = Rs. 44000
Amount to be brought in or withdrawn by A
New capital = Rs. 176000
Adjusted capital (given) = Rs. 100000
Cash brought in/paid off = Rs. 76000
Amount to be brought in or withdrawn by C
New capital = Rs. 44000
Adjusted capital (given) = Rs. 50000
Cash brought in/paid off = Rs. -6000
E will bring Rs. 76000 and G will withdraw Rs. 6000.
21.G , H and I are partners sharing profits and losses in the ratio of 2 , 1 and 2 respectively. H retired from the firm and adjusted capitals of G and I on the date of retirement was Rs. 70000 and Rs. 80000 respectively. The entire capital of the new firm is fixed at Rs. 150000. What will be the necessary entry for cash to be paid off or to be brought in by G and I to make their total capital equal to new capital of the firm?
(a) Cash/Bank A/c Dr 5000
To G’s Capital A/c 5000
I’s Capital A/c Dr 5000
To Cash/Bank A/c 5000
(b) Cash/Bank A/c Dr 5000
To I’s Capital A/c 5000
G’s Capital A/c Dr 5000
To Cash/Bank A/c 5000
(c) Cash/Bank A/c Dr 5000
To G’s Capital A/c 5000
I’s Capital A/c Dr 5000
To Cash/Bank A/c 5000
(d) None of the above
Answer
Answer: (c) Cash/Bank A/c Dr 5000
To G’s Capital A/c 5000
I’s Capital A/c Dr 5000
To Cash/Bank A/c 5000
Explanation: New ratio between G and I after the retirement of H = (2/4) : (2/4)
Total capital of the new firm = Rs. 150000
New capital of G = Rs. 75000 ( 150000 X (2/4) )
Less: Adjusted capital of G = Rs. 70000
Deficiency = Rs. 5000
New capital of I = Rs. 75000 ( 150000 X (2/4) )
Less: Adjusted capital of I = Rs. 80000
Surplus = Rs. -5000
Cash/Bank A/c Dr 5000
To G’s Capital A/c 5000
I’s Capital A/c Dr 5000
To Cash/Bank A/c 5000
22.Gaining ratio of remaining partners is calculated by:
(a) Old share – New share
(b) New share – Old share
(c) New share – Sacrificing share
(d) None of the above
Answer
Answer: (b) New share – Old share
Explanation: The ratio in which the continuing partners acquire the outgoing ( retired or deceased ) partner’s share is known as gaining ratio. It is calculated by taking out the difference between new profit share and old profit share.