Question : Surender, Ramesh, Naresh and Mohan are partners in a firm sharing profits in the ratio 2:1:2:1. On the retirement of Naresh, goodwill was valued at T 72,000. Surender, Ramesh  and Mohan decided to share future profits equally

Choose the correct  journal entry for the treatment of goodwill.

Option 1: Ramesh’s  Capital A/c ...Dr. 12,000

Mohan’s  Capital A/c ...Dr. 12,000

 To Naresh Capital A/c 24,000 

Option 2:  Ramesh’s  Capital A/c ...Dr. 24000

 To Naresh Capital A/c 24,000 

Option 3: Ramesh’s  Capital A/c ...Dr. 16000

Mohan’s  Capital A/c ...Dr. 8000

To Naresh Capital A/c 24000

Option 4: None of the above

Question : How is goodwill recorded when a partner retires?

Option 1: Remaining Partner’s Capital A/cs Dr. (In Gaining Ratio)

 To Retiring Partner’s Capital A/c (with his share of goodwill)

Option 2: Remaining Partner’s Capital A/cs Dr. (In New Ratio)

To Retiring Partner’s Capital A/c (with his share of goodwill)

Option 3: Goodwill A/c          Dr.

To Retiring Partner’s Capital A/c (with his share)

Option 4: Goodwill A/c              Dr.

To All Partner’s Capital A/cs (In Old Ratio)

Question : Choose the correct Journal entry If the profit-sharing ratio of the remaining or continuing partners does not change in case of profit.

Option 1: Profit and Loss Suspense A/c ...Dr.

To Deceased Partner ‘s Capital A/c

Option 2: Deceased’s partner’s capital account Dr 

To profit and loss suspense account 

Option 3: Profit and loss appropriation account Dr 

To Deceased partner’s capital account

Option 4: Profit and l;oss  adjustment account Dr ]

      To deceased  partner’s capital account

Question : Choose the correct Journal entry If the profit-sharing ratio of the remaining or continuing partners does not change in case of profit.

Option 1: Profit and Loss Suspense A/c ...Dr.

To Deceased Partner ‘s Capital A/c

Option 2: Deceased’s partner’s capital account Dr 

To profit and loss suspense account 

Option 3: Profit and loss appropriation account Dr 

To Deceased partner’s capital account

Option 4: Profit and l;oss  adjustment account Dr ]

      To deceased  partner’s capital account

Question : A, B and C are partners sharing profits in the ratio of 3: 2: 1. On March 31, 2018, C died and a new profit-sharing ratio was agreed upon at 3: 1. They also decided to record the effect of the following without affecting their book values: 
General Reserve 1,00,000
Profit and  Loss Account 45,000
Advertisement Suspense Account 25,000
Adjustment entry will be 

Option 1: Debit A’s Capital A/c by Rs.30,000; Credit B’s Capital A/c by Rs.10,000 and C’s Capital A/c by Rs.20,000.

Option 2: Debit B’s Capital A/c by Rs.30,000; Credit A’s Capital A/c by Rs.10,000 and C’s Capital A/c by Rs.20,000.

Option 3: Debit A’s Capital A/c by Rs.20,000; Credit B’s Capital A/c by Rs.10,000 and C’s Capital A/c by Rs.10,000

Option 4: None of the above