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Sangeeta, Saroj and Shanti are partners sharing profits and losses in the ratio of 5 : 3 : 2. Shanit retired and on the date of her retirement, following adjustements were agreed: a) The valueof furniture is to be increased by ₹ 12,000 b) The value of stock to be decreased by ₹ 10,000. c) Machinery of the books value of ₹ 50,000 is to be reduced by 10%. d) A Provision for doubtful debts @ 5% is to be created on debtors. e) Unrecorded investment worth ₹ 10,000. f) A creditor of ₹ 1,000 is not likely to be claimed, hence, is to be written back. Pass necessary Journal entries.

Solution:-

X, Y and Z are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Z retired from the firm on 1st April, 2022. On the date of Z’s retirement, following existed in the books of the firm: General Reserve – ₹ 1,80,000 Profit & Loss Account (Dr.) – ₹ 30,000 Workmen Compensation Reserve – ₹ 24,000 which was no more required Employee’s Provident Fund – ₹ 20,000. Pass necessary Journal entries for the adjustment of these items on Z’s retirement.

Solution:-    

Raju, Amit and Chander were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Goodwill appeared in their books at a value of ₹ 1,50,000. Amit decided to retire form the firm. On the date of his retirement, goodwill of the firm was valued at ₹ 6,00,000. New profit sharing ratio decided between Raju and Chander was 2 : 3. Pass the necessary Journal entries for goodwill by raising and writing off goodwill to the extent of retiring partner’s share.

Solution:-

A, B and C were partners in a firm sharing profits in the ratio of 6 : 5 : 4. Their capitals were A – ₹ 1,00,000; B – ₹ 80,000 and C – ₹ 60,000 respectively. On 1st April, 2009, A retired from the firm and the new profit sharing ratio between B and C was decided as 1 : 4. On A’s retirement, the goodwill of the firm was valued at ₹ 1,80,000. Showing your calculations clearly, pass the necessary Journal entry for the treatment of goodwill on A’s retirement.

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