TS Grewal chapter 6 – Retirement of a Partner, Question 8 to Question 7 solution of the 2021-22 Edition.
Note – we upload working note before the main solution because we want students would get full understanding about the question before moving forward in the solution.
Q8- A, B, and C were partners in a firm sharing profits in the ratio of 8 : 4 : 3. B retires and his share is taken up equally by A and C. Find the new profit-sharing ratio.
SOLUTION:-
Old Ratio (A, B and C) = 8 : 4 : 3
B retires from the firm.
His profit share = 4/15
B’s share taken by A and C in ratio of 1: 1
Share taken by A = 4/15 × 1/2 = 2/15
Share taken by C = 4/15 × 1/2 = 2/15
New Ratio = Old Ratio + Share acquired from B
A’s New Share = 8/15 + 2/15 = 10/15 = 2/3
C’s New Share = 3/15 + 2/15 = 5/15 = 1/3
∴ New Profit Ratio (A and C) = 2 : 1
Q9- A, B, and C are partners sharing profits in the ratio of 5: 3: 2. C retires and his share is taken by A. Calculate new profit-sharing ratio of A and B.
SOLUTION:-
Old Ratio (A, B and C) = 5: 3: 2
C retires from the firm.
His profit share = 210
C’s share is taken by A in entirety
New Ratio = Old Ratio + Share acquired from C
A’s New Share: 5/10+2/10=7/10
B’s New Share: 3/10+0=310
∴ New Profit Ratio (A and B) = 7: 3
Q10- P, Q and R are partners sharing profits in the ratio of 7:5:3. P retires and it is decided that profit-sharing ratio between Q and R will be same as existing between P and Q. Calculate New profit-sharing ratio and Gaining Ratio.
SOLUTION:-
Calculation of Gaining Ratio
P :Q :R = 7:5:3(Old ratio)
New profit sharing ratio = Q : R = 7:5 (New ratio, same as between P & Q)
Gaining Ratio = New Ratio – Old Ratio
Q’s Gain = 7/12 − 5/15 = 35 − 20/60 = 15/60
R’s Gain = 5/12 − 3/15 = 25 − 12/60 = 13/60
Gaining ratio = Q : R = 15:13
Q.11- Murli, Naveen and Omprakash are partners sharing profits in the ratio of 3/8, 1/2 and 1/8. Murli retires and surrenders 2/3rd of his share in favour of Naveen and remaining share in favour of Omprakash. Calculate new profit-sharing ratio and gaining ratio of the remaining partners.
SOLUTION:-
Old Ratio = 3:4:1
Murli’s share = 3/8
Share acquired by Naveen = 3/8 × 2/3 = 2/8
Remaining Share = 3/8 − 2/8 = 1/8 (acquired by Omprakash)
Gaining Ratio = 28:18 = 2:1
Naveen’s New Share = 4/8 + 2/8 = 6/8
Omprakash’s New Share = 1/8 + 1/8 = 2/8
New Profit Sharing Ratio = 3:1
Q.12- Om, Ram and Shanti are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. Ram decides to retire from the firm. Calculate new profit-sharing ratio of Om and Shanti in the following circumstances:
(a) If Ram gives his share to Om and Shanti in the original ratio of Om and Shanti.
(b) If Ram gives his share to Om and Shanti in equal proportion.
(c) If Ram gives his share to Om and Shanti in the ratio of 3 : 1.
(d) If Ram gives his share to Om only.
SOLUTION:-
Old Ratio (Om, Ram and Shanti) = 4 : 3 : 2
Ram retires from the firm.
His profit share = 3/9
Case (a) – Ram gives his share to Om and Shanti in their original ratio.
Original Share (Om and Shanti) = 4 : 2
Share of mohan taken by Om = 3/9 × 4/6 = 12/54
Share of mohan taken by Ram = 3/9 × 2/6 = 6/54
New Ratio = Old Ratio + Share acquired from Ram
Om‘s new share = 4/9 + 12/54 = 24 + 12/54 = 36/54
Ram‘s new share = 2/9 + 6/54 = 12 + 6/54 = 18/54
∴ New Profit Ratio (Om and Shanti) = 36: 18 or 2: 1
Case (b) – B gives his share to Om and Shanti in equal proportion.
Share taken by Om and Shanti = 3/9 × 1/2 = 3/18 each
New Ratio = Old Ratio + Share acquired from Ram
Om‘s new share = 4/9 + 3/18 = 8 + 3/18 = 11/18
Shanti‘s new share = 2/9 + 3/18 = 4 + 3/18 = 7/18
∴ New Profit Ratio (Om and Shanti) = 11 : 7
Case (c) – B gives his to Om and Shanti in the ratio 3 : 1.
Share taken by Om = 3/9 × 3/4 = 9/36
Share taken by Ram = 3/9 × 1/4 = 3/36
New Ratio = Old Ratio + Share acquired from Ram
Om‘s new share = 4/9 + 9/36 = 16 + 9/36 = 25/36
Shanti‘s new share = 2/9 + 3/36 = 8 + 3/36 = 11/36
∴ New Profit Ratio (Om and Shanti) = 25 : 11
Case (d) – B gives his share to Om only.
Om’s New Share = Om’s Old Share + Share of Ram = 4/9 + 3/9 = 7/9
Shanti’s Share = 2/9
∴ New Profit Ratio (Om and Shanti) = 7 : 2
Q.13- Sunil, Shahid and David are partners sharing profits and losses in the ratio of 4 : 3 : 2 .Shahid retires and the goodwill is valued at ₹ 72,000. Calculate Shahid’s share of goodwill and pass the Journal entry for Goodwill. Sunil and David decided to share future profits and losses in the ratio of 5:3.
SOLUTION:-
Working Note –
Calculation of gaining and sacrificing ratio
| Sunil | Shahid | David | |
| Old ratio | 4 | 3 | 2 |
| New ratio | 5 | 3 |
WN.1-
Sunil = 4/9 – 5/8 = 32 – 45/72 = -13/72
David = 2/9 – 3/8 = 16 – 27/72 = -11/72
Gaining ratio of Sunil and David = 13:11
WN.2-
Firms goodwill = 72,000
Share of retiring partner Shahid is 3/9
Share of shahid share = 72,000 × 3/9 = 24,000
WN.3-
Sunil and David will compensate 24,000 in their gaining ratio 13:11
Sunil will compensate = 24,000 × 13/24 = 13,000
David will compensate = 24,000 × 11/24 = 11,000
Journal
| Date | Particulars | L.F. | Debit ( ₹) | Credit ( ₹) |
| Shahid’s capital a/c …. Dr. | 24,000 | |||
| To Sunil’s capital a/c | 13,000 | |||
| To S’s Capital A/c (Being Goodwill adjusted) | 11,000 |
Q.14- P, Q, R and S were partners in a firm sharing profits in the ratio of 5 : 3 : 1 : 1. On 1st January, 2021, S retired from the firm. On S’s retirement, goodwill of the firm was valued at ₹ 4,20,000. New profit-sharing ratio among P, Q and R will be 4 : 3 : 3.
Showing your working notes clearly, pass necessary Journal entry for the treatment of goodwill in the books of the firm on S’s retirement.
SOLUTION:-
Working Notes:
Gaining Ratio = New Ratio – Old Ratio
P = 4/10 − 5/10 = −1/10 sacrifice
Q = 3/10 − 3/10 = 0
R = 3/10 − 1/10 = 2/10
P’s share = 4,20,000 × 1/10 = 42,000
R’s share = 4,20,000 × 2/10 = 84,000
S’s share = 4,20,000 × 1/10 = 42,000
Journal
| Date | Particulars | L.F. | Debit ( ₹) | Credit ( ₹) |
| 1Jan, 2021 | R’s Capital A/c …Dr. | 84,000 | ||
| To P’s Capital A/c | 42,000 | |||
| To S’s Capital A/c (Being Goodwill Adjusted) | 42,000 |