Partnership

Retirement/Death

Easy

A, B and C are partners with profit sharing ratio of 2:1 respectively. C died on 1 oct 2021. Journal entry to be passed to give C his share of profit immediately will be:-

Profit and Loss Suspense A/c Dr

To C's Capital A/c

C's Capital A/c Dr

To Profit and Loss Suspense A/c

A's Capital A/c Dr

B's Capital A/c Dr

To C's Capital A/c

C's Capital A/c Dr

To A's Capital A/c

To B's Capital A/c

✅ Correct Option: 1

When a partner dies between two balance sheet dates, the deceased partner's share of profit up to date of death is given by debiting Profit and Loss Suspense A/c (which will later be adjusted against the firm's profit) and crediting the deceased partner's Capital A/c.

Note: The question states the ratio as 2:1 for three partners, which appears incomplete; we have answered based on the standard journal entry concept.

2022: 30 Aug Shift 2

Rani, Sandhya and Kangana are partners sharing profits in the ratio of 4:3:2 Rani retires. Sandhya and Kangana decided to share profits in future in the ratio of 5:3. Gaining ratio of Sandhya and Kangana will be

2025: 22 May Shift 1

At the time of retirement of a partner, undistributed profits appearing in the balance sheet of the old firm is transferred to the capital account of:

2025: 13 May Shift 1

The old Profit Sharing ratio among M, N and P are 2:2:1. The New profit sharing ratio after N retirement is 3:2. The gaining ratio between M and P will be:

2026: 19 May Shift 1

Manav, Nath and Narayan were partners in a firm sharing profits in the ratio of 1 : 2 : 1. The firm closes its books on 31st March every year. On 30th September, 2025 Nath died.

Match List-I with List-II

List-I	List-II
(A) There was a debit balance of Rs 30,000 in the profit and loss account.	(I) Nath's Capital A/c will be debited by Rs. 5100
(B) Nath's share of profit/loss in the year of his death was to be calculated on the basis of average profit/loss of last 5 years, the average loss is Rs 90,000.	(II) Nath's Capital A/c will be debited by Rs. 15000
(C) There was a Goodwill appearing in the books for Rs. 25000.	(III) Nath's Capital A/c will be debited by Rs. 12500
(D) There was a drawing of Nath of Rs 85000 on which interest is to be charged at 12%.	(IV) Nath's Capital A/c will be debited by Rs. 22,500

Choose the correct answer from the options given below:

2025: 3 June Shift 2

At the time of retirement of a partner, the difference between the Old Profit Sharing Ratio and the New Profit Sharing Ratio is a negative outcome for a remaining partner. It indicates that :-

2025: 14 May Shift 1

Which combination of statements are correct about Death of a partner-

(A) Ascertainment of new profit sharing ratio and gaining ratio

(B) Preparation of Realization Account

(D) Adjustment of capital, if required

Choose the correct answer from the options given below:

A, B and C are partners with profit sharing ratio of 2:1 respectively. C died on 1 oct 2021. Journal entry to be passed to give C his share of profit immediately will be:-

Solution

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