Standard:- 12th Commerce

Subject:- Book Keeping & Accountancy

Retirement & Death of Of Partner

Q2 Total 10 Marks Practical Question + At least 2 Marks Objective
I
Retirement Of PARTNER
Meaning: - The procedure of one or more partners leaves
the firm Due to some reasons like old age, poor health etc.
and the remaining partners continue to do the business of
the firm, it is known as retirement of a partner.,

Apna Sapna Money money

Money money
Old Partners
Sapna
All partners Apna

Remaining Partners Retiring

Continue Partner Partner
 Admission of partner Retirement / Death of partner
Total old Number
of partner 2 3
Total New 2
Number of 3
partner

Given In Question / Equal Given In Question / Equal

Old
Ratio 1:1:1
1:1

E.g XYZ = 3:2:1

New R.P = 1- Share of New partner
Ratio New = R.P. * Old Ratio Y retired XZ = 3:1

Sacrifice
S.R. = O.R - N.R. G.R. = N.R. - O.R.
Ratio /
Gain Ratio
Revaluation Distributed between Distributed between
profit / Loss 2 partner 3 partner
Distribution

General Distributed between Distributed between 3

Reserve 2 partner partner
-

Let
in
Ratios which are use in
Retirement of partner
Old Ratio = Given in Question OR Equal
Example :- Old Ratio XYZ = 3:2:1. Z retired New Ratio
X : Y = 3:2

New Ratio =
Amit suraj & Sachin are partners shairing Profit & loss in the ratio 5:3:2 & Suraj is retired from
firm than NPSR = ?

Old = Amit : Suraj : Sachin = 5:3:2

Suraj Retired

New = Amit : Sachin = 5:2

Gain Ratio = New Ratio - Old Ratio By Sunil panda sir

8286987552
1) A,B and C share profits and losses in the ratio of 4:2:1, if B retires
what will be the new ratio ?

By Sunil panda sir

2)

By Sunil panda sir

Q3

By Sunil panda sir

Given In question
Old Balance Sheet

Adjustments

Require to Prepare
Journal Entries
By Sunil panda sir
Revaluation A/C / P&L Adjustment A/c

Partners Capital A/C

New or Closing Balance sheet

 Retirement of Partner Goodwill posting
If in Qus given

Goodwill share of Total Goodwill / Goodwill Amt already

Retiring Partner OR Total Firm Goodwill OR given in Question

1st Effect 2nd Effect 1st Effect 2nd Effect 1st Effect 2nd Effect
Partner Balance
Capital A/c Sheet Partner Balance Partner Balance
Cr. Side Assets side Capital A/c Sheet Capital A/c Sheet
Cr. Side Assets side Cr. Side Assets side
By Goodwill A/c
Goodwill
Let Assume it's By Goodwill A/c
Goodwill By Goodwill A/c
retiring partner Same amt on Goodwill
Distributed in all
column assets side Distributed in all
partners Same amt on
outer column partners Same amt on
assets side
assets side
outer column Difference amt of Given outer column
goodwill in balance sheet &
Amt given in adjustment
Actual value of

OR OR
Goodwill /
Adjustment value

OR
But In Question If Written or given :- Goodwill written off / Not
show in the books / Not appear in the books than / Adjusted
2nd Effect
Partner Capital A/c
1st Effect remain same Dr. Side
2nd effect of Goodwill
To Goodwill A/c

will be changed Only on remaining or

continuing partner column
 Goodwill

Share of Retiring partner Goodwill of firm

(Only retired partner share amt) (Total Firm Goodwill Amt)
1) Goodwill raised 1) Goodwill of the firm raised
Goodwill A/c ............................Dr. Goodwill A/c ...............Dr
To Retiring Partner Capital A/c To All partner

2) Adjusted 2) Adjusted
Existing partners A/c........Dr. Existing partners A/c........Dr.
To goodwill A/c To goodwill A/c
(in gain ratio) (in gain ratio)
 Death of Partner

Goodwill

Profit & Loss Suspense A/c