Question

L, M and N are partners in 3 : 2:1. M wants to retire from the firm. The profit on revaluation on that date was 72,000. New ratio of L and N is 7:3. Profit on revaluation will be distributed as: (A) L*24,000, M36,000, N 12,000 (B) L36,000, M24,000, N 12,000 (C) L*54,000, N 18,000 Alone (D), L50,400, N 21,600
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Answer 1

Answer:

Rs-4000

Explanation:

Revaluation of assets and liabilities is made at the time of Ramesh’s retirement and not after his retirement. Therefore, profits on revaluation will be distributed among all the partners in their old profit sharing ratio. In the absence of partnership deed, profits are distributed among all the partners in equal ratio.

Therefore, profit share of each partner = 12,000 X 1/3 = Rs. 4,000