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Retirement or Death of a partner Class 12 Accountancy Important Questions

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Retirement or Death of a partner Class 12 Accountancy Important Questions. myCBSEguide has just released Chapter Wise Question Answers for class 12 Accountancy. There chapter wise Practice Questions with complete solutions are available for download in myCBSEguide website and mobile app. These test papers with solution are prepared by our team of expert teachers who are teaching grade in CBSE schools for years. There are around 4-5 set of solved Accountancy Extra questions from each and every chapter. The students will not miss any concept in these Chapter wise question that are specially designed to tackle Exam. We have taken care of every single concept given in CBSE Class 12 Accountancy syllabus and questions are framed as per the latest marking scheme and blue print issued by CBSE for class 12.

CBSE Class 12 Accountancy Extra Questions

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Practice Questions for Class 12 Accountancy

Ch-5 Retirement or Death of a partner

  1. M, N and H are partners without partnership deed. M wants to get retired. The profit on revaluation on the date was ` 12000.and other partners N and H want to share this in the new ratio 3:2. M wants this to be shared equally How this profit should be shared
    1. 6000 equally between each partner
    2. 4000 equally between each partner
    3. 8000 equally between each partner
    4. 3000 equally between each partner
  2. If any asset is taken over by a partner at the time of his retirement, how will you record it?
    1. Balance Sheet
    2. Revaluation Account
    3. Cr. Side of his capital account
    4. Dr. side of his capital account
  3. New Ratio – Old Ratio = ?
    1. New ratio of continuing partners
    2. Both Sacrificing ratio and New ratio of continuing partners
    3. Sacrificing ratio
    4. Gain Ratio
  4. Calculation of sharing of profit up to date of death will be calculated on the basis of
    1. Yearly basis
    2. Time basis
    3. Turnover basis
    4. Both Time basis and Turnover basis
  5. There are some adjustments are to be done at the time of retiring partner
    1. New profit sharing ratio of continuing partners
    2. Accounting treatment of goodwill
    3. Preparation of Executor’s Account
    4. Adjustment of Reserves and Profits
      Which of the above adjustments are to be done

      1. b, c and d
      2. a, c , b
      3. a, b , c, d
      4. a , b and d
  6. State any two items of deductions that may have to be made from the amount of payable to a retiring partner.

  7. Neetu, Meetu and Teetu were parents in a firm. On 1st January 2018, Meetu retired. On Meetu’s retirement, the goodwill of the firm was valued at Rs.4,20,000. Pass necessary journal entry for the treatment of goodwill on Meetu’s retirement.

  8. Give the Journal entry to distribute the ‘Workmen Compensation Reserve’ of Rs.60,000 at the time of retirement of Vinod, when there is no claim against it. The has three partners.

  9. X, Y and Z were partners sharing profits in the ratio of 12,310 and 1512,310 and 15. X retired from the firm. Calculate the gaining ratio of the remaining partners.

  10. Give the journal entry to distribute ‘workmen compensation reserve’ of Rs 60,000 at the time of retirement of Sajjan, when there is no claim against it. The firm has three partners Rajat, Sajjan and Kavita.

  11. P, Q, and R are partners sharing profits in the ratio of 4: 3: 1. P retires and his share is taken over by Q and R equally. Find the new profit sharing ratio of Q and R.

  12. Meera, Sarthak and Rohit were partners sharing profits in the ratio of 2 : 2 : 1. On 31 March 2018, their Balance Sheet was as follows :

    Balance Sheet of Meera, Sarthak and Rohit as at 31 March 2018

    LiabilitiesAmount (Rs.)AssetsAmount (Rs.)
    Creditors3,00,000Fixed Assets7,00,000
    Contingency Reserve1,00,000Stock2,00,000
    Capital :Debtors1,50,000
    Meera4,00,000Cash at bank3,50,000

    Sarthak died on 15th June, 2018. According to the partnership deed, his executors were entitled to : The firm’s profits for the last four years were : 2014 – 15 Rs.1,20,000, 2015 – 16 Rs.2,00,000, 2016 – 17 Rs.2,60,000 and 2017 – 18 Rs.2,20,000. Sarthak’s executors were paid the amount due immediately. Prepare Sarthak’s Capital Account to be presented to his executors.

    1. Balance in his Capital Account.
    2. His share of goodwill will be calculated on the basis of thrice the average of the past 4 years’ profits.
    3. His share in profits up to the date of death on the basis of average profits of the last two years. The time period for which he survived in the year of death will be calculated in months.
    4. Interest on capital @ 12% p.a. up to the date of his death.
  13. X, Y, and Z are partners sharing profits and losses in the ratio of 4: 3: 2. Y retires and surrenders l/9th of his share in favour of X and the remaining in favour of Z. Calculate the new profit-sharing ratio and the gaining ratio.

  14. Giriija, Yatin, and Zubin were partners sharing profits in the ratio 5 : 3 : 2. Zubin died on 1st August 2015. Amount due to Zubin’s executor after all adjustments was Rs.90,300. The executor was paid Rs.10,300 in cash immediately and the balance in two equal annual instalments with interest @ 6% p.a. starting from 31st March 2017. Accounts are closed on 31st March each year. Prepare Zubin’s Executors Account till he is finally paid.

  15. Lalit, Madhur and Neena were partners sharing profits as 50%, 30% and 20% respectively. On 31st March, 2013 their balance sheet was as follows

    Balance Sheet
    as on 31st March, 2013





    Provident Fund10,000Debtors47,000
    Investment Fluctuation Fund10,000(-) Provision for Doubtful Debts(3,000)44,000
    Capital A/csStock15,000
    Neena25,0001,1.5,000Profit and Loss A/c10,000




    On this date, Madhur retired and Lalit and Neena agreed to continue on the following terms

    1. The goodwill of the firm was valued at Rs 51,000.
    2. There was a claim for workmen’s compensation to the extent of Rs 6,000
    3. Investments were brought down to Rs 15,000.
    4. Provision for bad debts was reduced by Rs 1,000.
    5. Madhur was paid Rs 10,300 in cash and the balance was transferred to his loan account payable in two equal installments together with interest @ 12% per annum.

    Prepare revaluation account, partners’ capital accounts and Madhur’s loan account till the loan is finally paid off.

Ch-5 Retirement or Death of a partner


    1. 4000 equally between each partner, Explanation: In the absence of partnership deed profit sharing ratio will be equal. In this case, M is right; profit should be shared equally among the partners i.e. 4,000 equally among all the partners.
    1. Dr. side of his capital account, Explanation: Any asset taken by the partner will be shown in the debit side of his capital account. It means his capital account will be reduced by the same.
    1. Gain Ratio, Explanation: At the time of retirement or death of a partner, gain ratio of remaining partners is calculated as follows: New Ratio – Old Ratio = Gain Ratio
    1. Both Time basis and Turnover basis, Explanation: Deceased partner’s share will be calculated on the basis of:
      • Time
      • Turnover
        Note: Read the question carefully while calculating the share of profit of deceased partner.
    1. a, b and d, Explanation: Following adjustments are done at the time of retirement of a partner:
      • New profit sharing ratio of continuing partners
      • Accounting treatment of goodwill
      • Adjustment of Reserves and Profits
        Note: Executor’s Account is prepared at the time of death of a partner.
    1. His share of loss on revaluation of assets and reassessment of liabilities.
    2. His share of existing goodwill written off or profit and loss dr balance given in balance sheet.
  1. JOURNAL Entry
    DateParticularsLFAmt (Dr)Amt (Cr)
    Neetu’s Capital A/c…….Dr.70,000
    Neetu’s Capital A/c…….Dr.70,000
    To Meetu’s Capital A/c (4,20,000 ×13×13)1,40,000
    (Being the adjustment made for goodwill on retirement.)
  2. ParticularsLFDebit Amount Rs.Credit Amount Rs.
    Workmen Compensation Reserve A/c Dr.60,000
    To Kunwar’s Capital A/c20,000
    To Vinod’s Capital A/c20,000
    To Himanshu’s Capital A/c20,000
    (Being Workmen Compensation Reserve distributed to all the partners in their profit sharing ratio,e.g. 1:1:1, on the retirement of Vinod)
  3. Old ratio of X : Y : Z =12,310 or 510,310,21012,310 or 510,310,210= 5: 3: 2
    X retired and there is no information regarding the new profit sharing ratio between y and z is given. So, after striking of the retiring partner’s ratio, the remaining ratio will be new profit sharing ratio, i.e 3: 2
    Hence, New profit sharing ratio of Y: Z = 3: 2
    Gaining Ratio = New Profit Sharing Ratio – Old Profit Sharing Ratio
    Y’s Gaining Ratio = 35310=6310=31035−310=6−310=310,
    Z’s Gaining Raio = 25210=4210=21025−210=4−210=210
    Hence, New profit sharing ratio of Y and Z = 3: 2.
    DateParticularsL.F.Dr. (Rs.)Cr. (Rs.)
    Workmen Compensation Reserve A/c Dr.60,000
    To Rajat’s Capital A/c20,000
    To Sajjan’s Capital A/c20,000
    To Kavita’s Capital A/c20,000
    (Being workmen compensation reserve distributed between old partners in their old profit sharing ratio, i.e. , 1 : 1 : 1 on the event of retirement of Sajjan.)
  5. P’s share 4848 is being taken over by Q and R equally i.e., 2828 by Q and 2828 by R. as we know that gaining ratio = new ratio – old ratio so new ratio = old ratio so there gaining ratio = 2/8 taken by Q & 2/8 taken by R
    Now, Q’s share would be 38+28=5838+28=58
    R’s share would be 18+28=3818+28=38
    Thus, the new profit sharing ratio between Q and R would be 5 : 3.
  6. Sarthak’s Capital Account
    To Sarthak’s Executors A/c6,58,750By Balance b/d3,50,000
    By Interest on Capital A/c8,750
    By P & L Suspense A/c20,000
    (Balancing figure)By Meera’s Capital A/c1,60,000
    By Rohit’s Capital A/c80,000
    By Contingency Reserve A/c40,000


    1. Sarthak’s Share of Profit
    2. Goodwill
      Average profit = 1,20,000+2,00,000+2,60,000+2,20,0004=8,00,0004=1,20,000+2,00,000+2,60,000+2,20,0004=8,00,0004= 2,00,000
      Goodwill = 2,00,000 x 3 = 6,00,000
      Sarthak’s Share of Goodwill = 6,00,000 x 2525 = 2,40,000
  7. Calculation of New Profit Sharing Ratio:
    (a)Their existing shares4/92/9
    (b)Share surrendered by Y in favour of X: 1/9 ×× 1/3 =1/27
    Share surrendered by Y in favour of Z: 8/9 ×× 1/3 or *( y’s share – his surrender share in favour of x i.e. 1/3 – 1/27 =8/27)8/27
    (c)New Share of X and Z(a + b):13/2714/27
    (d)or New Share of X and Y1314

    Calculation of Gaining Ratio: as we know that Gaining ratio = new ratio – old ratio so X gain =13/27 – 4/9 =1/27 & y gain = 14/27 – 2/9 = 8/27 so 1:8 or
    Gaining Ratio = Share surrendered by Y: Share surrendered by Y in favour of X in favour of Z
    = 1/27: 8/27
    = 1: 8

  8. Zubin’s Executor’s Loan A/c
    1.8.15To Bank A/c10,3001.8.15By Zubin’s Capital A/c90,300
    31.3.16To Balanced c/d83,20031.3.16By Interest3,200
    31.3.17To Bank A/c48,0001.4.16By Balance b/d83,200
    To Balance c/d40,00031.3.17By Interest4,800
    31.3.18To Bank A/c42,4001.4.17By Balance b/d40,000
    31.3.18By Interest2,400
  9. Revaluation Account
    ParticularsAmount (Rs)ParticularsAmount (Rs)
    To Workmen’s Compensation Claim A/c6,000By Provision for Doubtful Debts1,000
    To Investments A/c15,000By Loss Transferred to Partners’ Capital A/c
    21,000 =======21,000 =======

    Partner’s Capital Account

    ParticularsLalit Amount (Rs)Madhur Amount (Rs)Neena Amount (Rs)ParticularsLalit Amount (Rs)Madhur Amount (Rs)Neena Amount (Rs)
    To Profit and Loss A/c (loss)5,0003,0002,000By Balance b/d50,00040,00025,000
    To Goodwill A/c10,0006,0004,000By Lalit’s Capital A/c (Goodwill)10,929
    To Revaluation A/c (Loss)10,0006,0004,000By Neena’s Capital A/c(Goodwill)4,371
    To Madhur’s Capital A/c (Goodwill)10,9294,371
    To Cash A/c10,300
    To Madhur’s Loan A/c30,000
    To Balance c/d14,07110,629
    50,000 ======55,300 ======25,000 ======50,000 ======55,300 =======25,000 =======

    Madhur’s Loan Account

    DateParticularsAmount (Rs)DateParticularsAmount (Rs)
    Mar 31, 2014To Bank A/c (15,000+ 3,600)18,600Apr 1, 2014By Madhur’s Capital A/c30,000
    Mar 31To Balance c/d15,000Mar 31By Interest A/c3,600
    33,600 =======33,600 =====
    Mar 31, 2015To Bank A/c (15,000+1,800)16,800Apr 1, 2015By Balance b/d15,000
    Mar 31By Interest A/c1,800
    16,800 ======16,800 ======

    Working Notes: Calculation of interest on loan: Interest for first year=30,000*12/100=3,600 Interest for second year=15000*12/100=1,800

Class 12 Accountancy Chapter Wise Important Questions

  1. FS of Non profit Organisation
  2. Fundamentals of partnership and Goodwill
  3. Change in Profit sharing ratio of Partners
  4. Admission of a Partner
  5. Retirement or Death of a partner
  6. Dissolution of Partnership
  7. Accounting for share Capital
  8. Accounting for Debentures
  9. Financial Statements and Analysis
  10. Statement Analysis Tools and Accounting Ratios
  11. Cash Flow Statement
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