Retirement or Death of a Partner
23 solved questions from Class 12 Accountancy, each with the full working. Tap any question to see the step-by-step solution.
- 1 What is the primary topic or theoretical principle explored in 'Retirement or Death of a Partner' (Class 12 ACCOUNTANCY)? medium MCQ Chapter Core Principle
- 2 Which key mechanism or analytical rule is highlighted in 'Retirement or Death of a Partner'? medium MCQ Key Analytical Mechanism
- 3 What is the primary topic or principle explained in 'Retirement or Death of a Partner' (Class 12 Accountancy)? medium MCQ Chapter Core Concept
- 4 Which key observation or fact is central to understanding 'Retirement or Death of a Partner'? medium MCQ Key Fact & Mechanism
- 5 Why is the study of 'Retirement or Death of a Partner' important for students of Class 12? medium MCQ Learning Significance
- 6 What is a common application or real-world example related to 'Retirement or Death of a Partner'? medium MCQ Real World Application
- 7 What key takeaway should students retain after completing 'Retirement or Death of a Partner'? medium MCQ Chapter Summary & Takeaway
- 8 Two partners, A and B, have a partnership with capital balances of ₹5,00,000 and ₹3,00,000 respectively. Partner B retires and agrees to buy‑out at book value. The partnership’s profit for the year is ₹1,20,000 and the partners share profits in the ratio 3:2. What is the amount payable to B upon retirement? easy 2 marks Buy‑out at book value
- 9 In a partnership of A, B and C, capital balances are ₹6,00,000, ₹4,00,000 and ₹5,00,000 respectively. The partnership profit for the year is ₹1,20,000 shared in the ratio 4:3:3. Partner B dies. The partnership has a life insurance policy of ₹15,00,000 on each partner, payable on death. The buy‑out price of B’s share is book value. The partnership has a bank loan of ₹2,00,000. Show the entry to close B’s capital account and distribute the insurance proceeds to A and C. What are the amounts received by A and C from the insurance? (Round to nearest rupee) hard 5 marks Death of partner with insurance and buy‑out at book value
- 10 Three partners, A, B and C, have capital balances of ₹4,00,000, ₹2,00,000 and ₹3,00,000 respectively. Partner A retires and the partners decide to buy his share at market value with a 10% premium on the market value. The market values of the partners’ capital are ₹4,50,000 for A, ₹2,20,000 for B and ₹3,30,000 for C. How much will partner B have to pay to buy A’s share? medium MCQ 3 marks Buy‑out at market value with premium
- 11 What is the key difference between buy‑out at book value and buy‑out at market value in a partnership? easy 1 mark Book value vs market value
- 12 Partners X, Y and Z have capital balances of ₹10,00,000, ₹6,00,000 and ₹4,00,000 respectively. Their profit sharing ratio is 5:3:2 and the partnership earned a profit of ₹2,40,000 for the year. Partner Y dies. The firm holds a life‑insurance policy of ₹20,00,000 on each partner, payable on death. The buy‑out price of Y’s share is his book value plus a 20% premium on Y’s share of goodwill. Goodwill is valued at one year’s average profit. The firm also has a bank loan of ₹3,00,000. Show the journal entry to close Y’s capital account, allocate the insurance proceeds, and compute the amount each surviving partner receives from the insurance. (Round to nearest rupee) hard 5 marks Buy‑out on death with insurance and goodwill premium
- 13 Which statement correctly describes a buy‑out at market value in a partnership? medium MCQ 1 mark Buy‑out at market value
- 14 Partners A and B have capital balances of ₹8,00,000 and ₹5,00,000 respectively. The partnership earned a profit of ₹1,80,000 for the year which is shared in the ratio 2:1. Partner B retires and his share is bought out at book value. What amount is payable to B? easy 2 marks Buy‑out at book value
- 15 Partners P and Q have capital balances of ₹7,00,000 and ₹5,00,000 respectively and share profits in the ratio 3:2. Partner Q retires and is bought out at book value. After retirement, a new partner R is admitted with a 25% profit share. Goodwill is valued at 1.5 times the average profit of the last two years, which were ₹1,20,000 and ₹1,80,000. How much goodwill is transferred to the remaining partner P and how much to the new partner R? medium 3 marks Goodwill adjustment on admission after retirement
- 16 Partners R and S have capital balances of ₹9,00,000 and ₹6,00,000 respectively. Their profit‑sharing ratio is 3:2 and the partnership earned a profit of ₹1,20,000 for the year. Partner S retires and is bought out at book value. How much amount is payable to S? easy 2 marks Buy‑out at book value (retirement)
- 17 Partners M, N and O have capital balances of ₹12,00,000, ₹8,00,000 and ₹5,00,000 respectively. Their profit‑sharing ratio is 4:3:2 and the partnership earned a profit of ₹3,00,000 for the year. Partner N dies. The firm holds a life‑insurance policy of ₹25,00,000 on each partner, payable on death. Goodwill is valued at 1.5 years' average profit, where the average profit of the last two years is ₹3,00,000. The buy‑out price of N’s share includes his book value, his share of goodwill and a 30% premium on that goodwill share. The firm also has a bank loan of ₹4,00,000. Show the journal entry to close N’s capital account, allocate the insurance proceeds, and compute the amount each surviving partner receives from the insurance (rounded to the nearest rupee). hard 4 marks Death of a partner with insurance & goodwill premium
- 18 In a partnership, when a retiring partner's share is bought out at book value, which of the following statements is correct? easy MCQ 1 mark Buy‑out at book value
- 19 Partners D and E have capital balances of ₹10,00,000 and ₹6,00,000 respectively and share profits in the ratio 5:3. The profits for the last two years were ₹1,00,000 and ₹1,40,000. Goodwill is valued at 2 times the average profit. Partner E retires and is bought out at book value. After retirement, a new partner F is admitted with a 30% profit share, leaving D with a 70% share. Goodwill is transferred to the remaining partners D and F in proportion to their new profit shares. Determine (i) the amount payable to retiring partner E, (ii) the goodwill transferred to D, and (iii) the goodwill transferred to F. medium 3 marks Retirement followed by admission of a new partner
- 20 Partners P, Q and R have capital balances of ₹7,00,000, ₹5,00,000 and ₹4,00,000 respectively. Their profit‑sharing ratio is 4:3:2. The profits for the last two years were ₹1,00,000 and ₹1,20,000. Goodwill is valued at 2 times the average profit. Partner Q retires. He is bought out at book value plus a 15% premium on his share of goodwill. After retirement, a new partner S is admitted such that the profit‑sharing ratios become P 55%, R 15% and S 30%. Goodwill is transferred to the remaining partners P and R in proportion to their new profit‑sharing ratios. Calculate (i) the amount payable to retiring partner Q, (ii) the goodwill transferred to P, and (iii) the goodwill transferred to R. hard 4 marks Retirement with goodwill premium and reallocation after admission
- 21 In a partnership, when a retiring partner's share is bought out at book value, which of the following statements is correct? easy MCQ 2 marks Buy‑out at book value
- 22 Partners K and L have capital balances of ₹9,00,000 and ₹6,00,000 respectively and share profits in the ratio 3:2. The profits for the last two years were ₹1,20,000 and ₹1,50,000. Goodwill is valued at one times the average profit of these two years. Partner L retires and is bought out at book value. After retirement, a new partner M is admitted with a 25% profit share, leaving K with 75% share. Goodwill is transferred to K and M in proportion to their new profit‑sharing ratios. Determine (i) the amount payable to retiring partner L, (ii) the goodwill transferred to K, and (iii) the goodwill transferred to M. medium 3 marks Goodwill allocation on retirement and admission
- 23 Partners S, T and U have capital balances of ₹12,00,000, ₹8,00,000 and ₹5,00,000 respectively. Their profit‑sharing ratio is 5:3:2 and the partnership earned profits of ₹2,20,000, ₹2,40,000 and ₹2,60,000 in the last three years. Partner T dies. Goodwill is valued at 1.5 years’ average profit. The buy‑out price of T’s share includes his book value, his share of goodwill and a 20% premium on that goodwill share. The firm holds a life‑insurance policy of ₹30,00,000 on each partner, payable on death, and has an outstanding bank loan of ₹5,00,000. Show the journal entry to close T’s capital account, allocate the insurance proceeds, and compute the amount each surviving partner receives from the insurance (rounded to the nearest rupee). hard 5 marks Death of a partner with insurance and goodwill premium