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Ans – b) Explanation:- The increase and decrease in the value of assets and liabilities belong to the old partners in their old profit-sharing ratio. Thus loss on revaluation is debited to all the partners in their old profit sharing…
Ans – b) Explanation:- If no further information is given, the increase and decrease in the value of all assets and liabilities belong to the old partners in their old profit-sharing ratio. Thus gain on revaluation is credited to all…
Ans – a) Explanation:- Increases in assets are recorded at the credit side at the time of reconstitution of the partnership firm.
Ans – b) Explanation:- The retiring partner sacrifices his share to the remaining partners. The remaining partners gain his share in the gaining ratio. As goodwill is part of future expected profits. The retiring partners’ share in the goodwill is…
Ans – c) Explanation:- The old goodwill is the purchased goodwill. It is purchased in the past by all the partners including retiring partners. Thus Existing Goodwill is written off in the old profit-sharing ratio among all the partners including…
Ans – d) Explanation:- As goodwill is part of the expected future profits that would be earned on the basis of the partner’s efforts till date. Thus retiring partners’ share in the goodwill is credited to him. This share is…
Ans – d) Explanation:- If no information is given all accumulated profits and reserve are distributed in old partners in their old profit sharing ratio. Thus no workmen compensation reserve will be shown in new Balance Sheet.
Ans – c) Explanation:- Accumulated losses belong to the old partners in their old profit-sharing ratio. as it is part of the past profits.
Ans – c) Explanation:- Accumulated profits belongs to all the partners as it is earned in their old profit sharing ratio.
Ans – a) Explanation:- In the case of Retirement, Gaining Ratio is calculated as Gaining Ratio = New Profit sharing ratio – Old Profit sharing ratio