K, N and P are partners sharing profits and losses in the ratio of 4:3:2. N retires and the goodwill is valued at Rs 72,000. K and P decided to share future profits and losses in the ratio of 5:3. Find which of the following is not correct? Option 1: K capital A/c is debited with Rs 13,000 Option 2: N Capital A/c is debited with Rs 24,000 Option 3: N Capital A/c is credited with Rs 24,000 Option 4: P Capital A/c is debited with Rs 11,000

Answer: N Capital A/c is debited with Rs 24,000. Solution: Old ratio of K, N and P = 4:3:2 N retires. New ratio of K and P = 5:3 Calculating Gaining Ratio: K's gain = New share - Old share = 5/8 - 4/9 = (45-32)/72 = 13/72 P's gain = New share - Old share = 3/8 - 2/9 = (27-16)/72 = 11/72 Gaining ratio of K:P = 13:11 N's share of goodwill: N's share = 3/9 × 72,000 = Rs 24,000 This amount will be paid to N by the continuing partners K and P in their gaining ratio. Distribution of goodwill: K will pay = 13/24 × 24,000 = Rs 13,000 P will pay = 11/24 × 24,000 = Rs 11,000 Journal Entry:, Particulars, Debit (Rs), Credit (Rs), K's Capital A/c Dr., 13,000, P's Capital A/c Dr., 11,000, To N's Capital A/c, 24,000, From the journal entry: - K's Capital A/c is debited with Rs 13,000 ✓ - P's Capital A/c is debited with Rs 11,000 ✓ - N's Capital A/c is credited with Rs 24,000 ✓ Option 2 states that N's Capital A/c is debited with Rs 24,000, which is incorrect. As the question is asking for the incorrect answer, the answer will be Option 2. N's account should be credited (not debited) as the retiring partner receives their share of goodwill from the continuing partners.

Partnership

Retirement/Death

Medium

common

K, N and P are partners sharing profits and losses in the ratio of 4:3:2. N retires and the goodwill is valued at Rs 72,000. K and P decided to share future profits and losses in the ratio of 5:3. Find which of the following is not correct?

K capital A/c is debited with Rs 13,000

N Capital A/c is debited with Rs 24,000

N Capital A/c is credited with Rs 24,000

P Capital A/c is debited with Rs 11,000

✅ Correct Option: 2

Old ratio of K, N and P = 4:3:2

N retires.

New ratio of K and P = 5:3

Calculating Gaining Ratio:

K's gain = New share - Old share = $\frac{5}{8} - \frac{4}{9} = \frac{45-32}{72} = \frac{13}{72}$

P's gain = New share - Old share = $\frac{3}{8} - \frac{2}{9} = \frac{27-16}{72} = \frac{11}{72}$

Gaining ratio of K:P = 13:11

N's share of goodwill:

N's share = $\frac{3}{9}$ × 72,000 = Rs 24,000

This amount will be paid to N by the continuing partners K and P in their gaining ratio.

Distribution of goodwill:

K will pay = $\frac{13}{24}$ × 24,000 = Rs 13,000

P will pay = $\frac{11}{24}$ × 24,000 = Rs 11,000

Journal Entry:

Particulars	Debit (Rs)	Credit (Rs)
K's Capital A/c Dr.	13,000
P's Capital A/c Dr.	11,000
To N's Capital A/c		24,000

From the journal entry:

K's Capital A/c is debited with Rs 13,000 ✓
P's Capital A/c is debited with Rs 11,000 ✓
N's Capital A/c is credited with Rs 24,000 ✓

Option 2 states that N's Capital A/c is debited with Rs 24,000, which is incorrect. As the question is asking for the incorrect answer, the answer will be Option 2. N's account should be credited (not debited) as the retiring partner receives their share of goodwill from the continuing partners.

2026: 19 May Shift 1

Anil, Bhanu and Chandu were partners in a firm sharing profits in the ratio of 5:3:2. Anil died on May 1, 2025. Half of the amount due to Anil is paid immediately. Choose the correct order of the following entries/ adjustments in the books of account:

(A) Pay half of the amount due to Anil's executor.

(B) Pay remaining half of the amount due with interest to Anil's executor in the next year.

(D) Provide for interest on capital and share of profit/loss till the date of death.

Choose the correct sequence of above adjustments from the options given below:

2026: 12 May Shift 1

Narender, Nitish and Naidu are partners sharing profits in the ratio of 5:3:2. Nitish retires. Narender and Naidu decide to share the profits of the new firm in the ratio of 3:2. What will be the gaining ratio of Narender and Naidu?

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: 3 June Shift 2

P, Q and R share profits equally. At the time of P's retirement, goodwill appears in the books at Rs. 3000. P will be credited with ___ amount for Goodwill share.

2025: 13 May Shift 2

Naveen, Suresh and Tarun are partners sharing profits and losses in the ratio of 5:3:2. Suresh retires from the firm and his share was acquired by Naveen and Tarun in the ratio 2:1. The new profit sharing ratio is

2025: 15 May Shift 1

Various accounting aspects involved on death of a partner are as follows:

(A) Adjustment in respect of unrecorded assets and liabilities

(B) Treatment of goodwill

(D) Preparation of Executor's loan A/c

Choose the correct answer from the options given below:

K, N and P are partners sharing profits and losses in the ratio of 4:3:2. N retires and the goodwill is valued at Rs 72,000. K and P decided to share future profits and losses in the ratio of 5:3. Find which of the following is not correct?

Solution

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