KENDRIYA VIDYALAYA SILCHAR, SILCHAR REGION

QUESTION BANK FOR MONTHLY TEST 2 (SEPT)

CLASS: XII
SUBJECT: ACCOUNTANCY
2MARK QUESTIONS:

Q1. A, B and C are partners sharing profits sharing in the ratio 3:2:1. D is admitted with 1/5 th share which he
acquires equally from A and B. Calculate new ratio and sacrificing ratio.

Q2. A firm earns profit of Rs.5,00,000. Normal Rate of Return in a similar type of business is 10%. The value of
total assets (excluding goodwill) and total outsiders’ liabilities as on the date of goodwill are Rs.55,00,000 and
Rs.14,00,000 respectively. Calculate value of goodwill according to Capitalisation of Super Profit Method as
well as Capitalisation of Average Profit Method.

Q3. The average profit of a firm is Rs60,000. The total assets of the firm are Rs900,000 and the value of other
liabilities is Rs500,000. Normal rate of return in the same business is 10%pa. Find out the value of goodwill on
the basis of three years’ purchase of super profits.

Q4. A business earned an average profit of 8,00,000 during the last few years. The normal rate of profit in the
similar type of business is 10%. The total value of assets and liabilities of the business were Rs.22,00,000 and
Rs.5,60,000 respectively. Calculate the value of goodwill of the firm by super profit method if it is valued at 2½
years’ purchase of super profits.

Q5. P, Q AND R are equal partners in a firm. Goodwill has been valued at Rs.36,000. On R’s retirement from the
firm P and Q agree to share profits in the ratio of 3:2. Pass journal entries for R’s share of goodwill.

Q6. N, M and T were partners in a firm. 1/1/2021 M retired. On M’s retirement, the goodwill of the firm was
valued at ₹420,000. Pass journal entry for treatment of goodwill on M’s retirement.

Q7. N, M and M are partners sharing profits 20%,30% and 50%. N retired and sold her share to M. Goodwill was
valued at two- and half-year purchase of average profits of three years. Profits of these three years were
Ras50,000, Rs70,000 and Rs60,000. Reserve fund stood in balance sheet at Rs30,000 at the time of his
retirement. Pass journal entries.

Q8. P, Q and R were partners sharing profits in the ratio of their capital contribution which was 600,000,
400,000 and 500,000 respectively. Their books are closed on 31/3 every year. P dies on 1 st Aug 2021. Under
the deed, deceased partner is entitled to his share of P/L to the date of death based on average profits of
preceding 3years. Profits were 2018-Rs50,000,2019-Rs120,000(loss),2020-Rs30,000 and 2021-Rs60,000.
Calculate P’s share of profit or loss and pass journal entry for the same.

Q9. P, Q and R were partners sharing profits in the ratio of 1:2:1. The firm closes its books on 31st March every
year. On 30/9/15 Q died. On that date his capital account showed a debit balance of Rs5,000. Q’s share of
profit till the date of his death was to be calculated on the basis of average profit of last 5years which was
Rs90,000. Calculate P’s share of profit or loss and pass journal entry for the same.

Q10. A, B and C were partners sharing profits in the ratio of 3:2:1. The firm closes its books on 31st March
every year. On 30/6/21 B died. His share of profit till the date of his death was to be calculated on the basis of
last year’s loss which was Rs80,000. Calculate P’s share of profit or loss and pass journal entry for the same.

4MARK QUESTIONS:

Q11. A Ltd. forfeited 3000shares of Rs10each fully called up, held by R for non-payment of allotment money of
Rs3per share and final call money of Rs4per share. Out of these shares,2500shares were reissued to S at
Rs8per share. Pass journal entries.
Q12.X, Y and Z were partners sharing profits in the ratio of 2:2:1. Their balance sheet as on 31/3/2018, the
date on which they dissolve their firm was as follows:

Liabilities Rs Assets Rs
X capital a/c 127,500 Other sundry assets 117,000
Y capital a/c 110,000 Furniture 11,000
Z capital a/c 17,000 Debtors 124,200
Loan 11,500 (-) Provision 123,000
Creditors 16,000 (1200) 17,800
Stock 13,200
Cash
282,000 282,000
It was agreed that:
a) X to take over furniture at Rs8000, debtors amounting to Rs120,000 at Rs117,200 and the creditors
of Rs16,000 were to be paid by him at this figure.
b) Y is to take over all stock for Rs17,000 and some sundry assets at Rs72,000(being 10% less than
the book value).
c) Z to take over remaining sundry assets at 80% of the book value and assume the responsibility of
discharge of loan together with accrued interest of Rs2300.
d) The expenses of realisation were Rs2700. The remaining debtors were sold to a debt collecting
agency at 50% of the book value.
Prepare Realisation a/c

Q13. X Ltd. forfeited 3000shares of Rs10each fully called up, held by Ram for non-payment of allotment money
of Rs3per share and final call money of Rs4per share. These shares were reissued at Rs12per share. Pass
journal entries.

Q14. X, Y and Z were partners sharing profits in the ratio of 3:1:1. Their balance sheet as on 31/3/2018, the
date on which they dissolve their firm was as follows:

Liabilities Rs Assets Rs
X capital a/c 275,000 Bank 50,000
Y capital a/c 200,000 Debtors 170,000
Z capital a/c 170,000 (-) Provision (20,000) 150,000
X Bro’s Loan 95,000 Stock 150,000
Creditors 60,000 Investments 250,000
Z’s Loan 100,000 Building 300,000
Investment fluctuation fund 50,000 p/L a/c 50,000

950,000 950,000
It was agreed that:
a) X would pay his brother’s loan
b) Investment realised 20% less
c) Creditors were paid 10% less
d) Building auctioned for Rs355,000. commission on auction was Rs5,000
e) 50%stock taken over by Ragini at market price which was 20% less than the book value and
remaining was sold at market price.
f) Dissolution expenses were Rs8,000. Rs3,000 were to be borne by firm and balance by Z. expenses
were paid by him.
Prepare Realisation a/c

Q15.P, K and R were partners in a firm sharing profits and losses in the ratio of 3:2:1. On 31/3/2017 their
Balance Sheet was as follows:
 Liabilities Rs Assets Rs
Creditors 300,000 Fixed assets 450,000
General reserve 150,000 Stock 150,000
Capitals: Debtors 200,000
P – 300,000 Bank 150,000
K – 200,000
R – 100,000 500,000

950,000 950,000
K died on 30/6/2017. According to deed, legal representatives of the deceased partner were entitled to
the following:
i) Balance in his capital a/c
ii) Interest on capital @12%
iii) Share of goodwill. Goodwill of the firm on K’s death was valued at Rs60,000
iv) Share in the profits of the firm till the date of death, calculated on the basis of last year’s profit.
The profit of the firm for the year ended 31/3/2017 was Rs500,000.
Prepare K’s capital a/c

Q16. A and B were partners in a firm sharing profits and losses in the ratio of 3:2. On 31/3/2017 their Balance
Sheet was as follows:

Liabilities Rs Assets Rs
Capital a/c Building 240,000
A 300,000 Furniture 175,000
B 200,000 Debtors 80,000
Creditors 117,000 Stock 75,000
Cash 47,000

617,000 617,000
The firm was dissolved on 1/4/2017 and the assets and liabilities were settled as follows
a) Building was taken over by creditors as their full and final payment
b) Furniture was taken over by B for cash payment at 5% less than the book value
c) Debtors were collected by a debt collection agency at cost of Rs5,000
d) Stock realised Rs70,500
e) B agreed to bear all realisation expenses. For this services B is paid Rs.500. Actual expense of
realisation amounted to Rs1,000
Prepare realisation a/c

Q17. A, B and C were partners in a firm sharing profits and losses in the ratio 3:3:4. C dies on 31/3/2016. After
all the necessary adjustments, his capital account showed a credit balance of Rs109,00. C’s executor was paid
Rs19,000 immediately and the balance in 3 equal yearly instalments starting from 31/3/2017 with interest
@13%pa. The firm closes its books on 31/3 every year. Prepare C’s executor’s a/c till he is finally paid.

Q18. Madan died on 1st September, 2012. The partnership deed provided for the following on the death of a
partner
(i) Goodwill of the firm to be valued at two years’ purchase of average profits for the last three years which
were Rs.64,000.
(ii) Madan’s share of profit till the date of his death was to be calculated on the basis of sales. Sales for the
year ended 31st March, 2012 amounted to Rs. 1,50,000 and that from 1st April to 1st September, 2012
Rs. 90,000. The profit for the year ended 31st March, 2012 was Rs. 50,000.
(iii) Interest on capital was to be provided @10% pa
Prepare Madan’s capital account to be rendered to his executor.
Q19. Ramesh, Suresh and Dinesh were partners in a firm sharing profits in the ratio of 3:3:4. Their capitals
were Rs. 5,00,000; Rs. 4,00,000 and Rs. 5,00,000 respectively. The firm closes its books on 31st March every
year. On 31st March, 2006, Ramesh died. The executor of the deceased partners according to the agreement
was entitled for the following
(i) Interest on capital from the first day of the accounting year till the date of his death @ 9% per annum.
(ii) His share of qoodwill — The qoodwill of the firm on Ramesh’s death was valued at Rs. 1,80,000.
(iii) His share of profits — The profit of the firm for the year ended 31 st March, 2006 was Rs. 1,20,000.
Ramesh’s executor was paid the sum due in two annual instalments with interest @ 10% per annum.
Prepare Ramesh’s capital account and executor’s account.
Q20. Pass journal entries for following transactions on dissolution of firm of Sudha and Shiva after the various
assets (other than cash) and outside liabilities have been transferred to realization account:
i) Sudha agreed to pay off her husband’s loan Rs.19,000
ii) A debtor whose debt of Rs9,000 was written off in the book paid Rs7500 in full settlement.
iii) Shiva took over all investment at Rs13,300
iv) Sundry creditors Rs.10,000 were paid at 9% discount
v) Realization expenses Rs3400 were paid by Sudha for which she was allowed Rs3000
vi) Loss on realization Rs9400 was divided between Sudha and Shiva in 3:2ratio.
6MARK QUESTIONS:

Q21. The Balance Sheet of K, N and P who were partners in a firm sharing profits according to their capitals as
on 31st March 2018 was as follows:

Liabilities Rs Assets Rs
Creditors 42,000 Building 2,00,000
Capital A/cs: Machinery 1,00,000
K 160,000 Stock 36,000
N 80,000 Debtors -
P 80,000 40,000 38,000
Workmen Compensation 40,000 Less: Provision 28,000
Reserve 2,000
4,02,000 Cash at Bank 4,02,000
On 1st April 2018, N decided to retire from the firm and was paid for his share in the firm subject to
the following:
i) Building to be appreciated by 20% and machinery to be depreciated by 20%.
ii) Provision for bad debts to be increased to 15% on debtors.
iii) Claim against workmen compensation amounted to Rs10,000
iv) Goodwill of the firm is valued at Rs144,000 and the retiring partner’s share is to be adjusted
through the capital a/cs of the remaining partners.
Prepare revaluation a/c , partners’ capital a/c and balance sheet after N’s retirement.

Q22. The Balance Sheet of A, B and C who were partners in a firm sharing profits according to their capitals as
on 31st March 2018 was as follows:

Liabilities Rs Assets Rs
Creditors 55,000 Cash 40,000
General reserve 30,000 Debtors 45,000
Capital (-) provision 5,000 40,000
A 150,000 Stock 50,000
B 125,000 Machinery 150,000
C 75,000 Patents 30,000
Building 100,000
p/L a/c 25,000
 4,02,000 4,02,000
On 1st April 2018, A decided to retire from the firm and was paid for his share in the firm subject to
the following:
a) Debtors of Rs2,000 will be written off as bad debts and a provision of 5% on debtors for bad and
doubtful debts will be maintained.
b) Patents will be completely written off and stock, machinery and building will be depreciated by 5%
c) An unrecorded creditor of Rs10,000 will be taken into account.
d) B and C will share future profits in ratio 2:3
e) Goodwill of the firm on A’s retirement was valued at Rs 300,000
Prepare revaluation a/c , partners’ capital a/c and balance sheet after N’s retirement.

Q23. The following is the Balance Sheet as on 31st Dec 2018 of Amit and Bablu, who share profits and losses
in the ratio 3:2

Liabilities Rs Assets Rs
Capital A/cs: Plant and Machinery 10,000
A 10,000 Land and Buildings 8,000
B 10,000 Debtors –
General Reserve 15,000 12,000
Workmen’s Compensation 5,000 Less: Provision for 11,000
Fund Doubtful Debts 12,000
Creditors 10,000 1,000 9,000
Stock
Cash
50,000 50,000
On 1st
January 2019, they agreed to admit Chanda into partnership on the following terms
i) The value of Land and Building would be increased to Rs18,000.
ii) The value of stock would be increased by Rs4,000.
iii) Chanda brought Rs15,000 as capital and Rs10,000 as his 1/3rd share of goodwill in cash.
iv) Proportionate the capitals of old partners on the basis of new partner’s capital. In case of
surplus or deficiency, adjustment to be made through current a/c.
Prepare Revaluation a/c, Partners’ capital a/c and balance sheet of the firm after Chanda’s admission.

Q24. S, N and M share profits and losses in the ratio 3:2. 1/1/18, M was admitted who paid Rs40,000 and
Rs20,000 for goodwill. S and N withdrew half of the goodwill. The balance sheet was as follows:
 Liabilities Rs Assets Rs
Creditors 14,000 Cash 7,000
Bills payable 4,000 Stock 40,000
Capital a/c Debtors – 22,000
S 56,000 (-) provision 20,000
N 30,000 (2,000) 7,000
Furniture 10,000
Plant 20,000
Building

104,000 104,000
The assets and liabilities of the firm were revalued as under:
a) Stock at Rs36000; furniture at Rs 8000; plant at 8000; building at Rs24,000
b) Provision for doubtful debts is to be maintained at 10% of the debtors
c) A liability of Rs 1000 included in creditors was not likely to be paid.
Prepare Revaluation a/c, Partners’ capital a/c and balance sheet of the firm after M’s admission.

Q25. S Ltd invited application for the allotment of 80,000 equity shares of Rs 10 each at par. The amount was
payable as follows:
On application – Rs 2 per share; On allotment – Rs 4 per share; On 1st and final call – Rs 4 per share.
Applications for 110,000 shares were received. Applications for 10,000 shares were rejected. Shares were
allotted on prorate basis to the remaining applicants. Excess application money received was adjusted
towards allotment. All calls were made and were duly received. Manoj who was allotted 2,000 shares failed to
pay the 1st and final call. His shares were forfeited. The forfeited shares were reissued at Rs 8 per share.
Pass Journal Entries to record the above transaction.

Q26. A Ltd invited application for 100,000 10% preference shares of Rs 10 each at par at Rs12 . The amount
was payable as follows:
On application – Rs 2 per share; On allotment – Rs5 per share; On 1st call– Rs3 per share and final call – Rs2
per share
Applications for 150,000 shares were received. Applications for 40,000 shares were rejected. Shares were
allotted on prorate basis to the remaining applicants. Excess application money received was adjusted
towards allotment. All calls were made and were duly received. A shareholder who was allotted 5,000 shares
failed to pay the 1st and final call. His shares were forfeited. 2000 of forfeited shares were reissued at Rs15 per
share.
Pass Journal Entries to record the above transaction and prepare cash book

Q27. The following is the Balance Sheet as on 31/3/21 of P, Q and R, who share profits and losses as
50%,30%and 20%respectively.

Liabilities Rs Assets Rs
Creditors 28,000 Cash 34,000
Employees provident fund 10,000 Debtors 47,000
Investment fluctuation fund 10,000 (-) provision (3,000) 44,000
Capital a/c Stock 15,000
P 50,000 Investment 40,000
Q 40,000 Goodwill 20,000
R 25,000 p/l ac 10,000

163,000 163,000
On this date, Q retired
a) goodwill of the firm Rs51,000
 b) there was a claim for workmen’s compensation to the extent Rs6,000
c)investment were brought down to Rs15,000
d) provision for bad debts was reduced by Rs1000
e) B was paid Rs10,300 in cash and balance was transferred to his loan a/c payable in 2equal
instalments together with interest @12%pa
prepare revaluation a/c, capital a/c and B’s loan a/c till it is finally paid off

Q28. A and B are partners sharing ratio 3:1 . balance sheet as on 31/12/2016 is given below:
Liabilities Rs Assets Rs
Creditors 41,500 Bank 26,500
Reserve 4000 Bills receivables 3,000
Capital Debtors 16,000
A 30,000 Stock 20,000
B 16,000 Fixtures 1,000
Land and building 25,000

91,500 91,500

On Jan. 1, 2017, C was admitted into partnership on the following terms:

(a) That C pays ₹ 10,000 as his capital.

(b) That C pays ₹ 5,000 for goodwill. Half of this sum is to be withdrawn by A and B.
(c) That stock and fixtures be reduced by 10% and a 5%, provision for doubtful debts be created on Sundry
Debtors and Bills Receivable.
(d) That the value of land and buildings be appreciated by 20%.
(e) There being a claim against the firm for damages, a liability to the extent of ₹ 1,000 should be created.
(f) An item of ₹ 650 included in sundry creditors is not likely to be claimed and hence should be written back.
Prepare revaluation a/c, partners capital a/c and balance sheet.
Q29. Ajay, Aman and Anand were partners in a firm sharing profits in the ratio of 5:1:4. Their balance sheet as
on 31/3/15 is given below:

Liabilities Rs Assets Rs
Creditors 147,000 Land 540,000
Reserve 210,000 Building 270,000
Bills payable 33,000 Plant 190,000
Capital Stock 75,000
Ajay 500,000 Debtor 60,000
Aman 100,000 Bank 15,000
Anand’ 160,000

1150,000 1150,000

From 1/4/15 Ajay, Aman and Anand decided to share future profits equally. It was agreed that

a) Goodwill of the firm Rs180,000

b) Land be revalued at Rs600,000 and building depreciated by 10%
c) Creditors of Rs 15000 were not likely to be claimed hence written off
Prepare Revaluation, partners capital account and balance sheet of the reconstituted firm.
Q30. A ,B and C were partners in a firm sharing profit in the ratio 3:2:1. On 31/3/2015 their balance sheet was
as follows :

Liabilities Rs Assets Rs
Creditors 84,000 Bank 17,000
Reserve 21,000 Debtors 23,000
Capital Stock 110,000
A 60,000 Investments 30,000
B 40,000 Furniture & fittings 10,000
C 20,000 Machinery 35,000

225,000 225,000
On the above date D was admitted as a new partner and it was decided that:

a) New ratio 2:2:1:1

b) Goodwill of the firm Rs90,000 and D to bring his share of goodwill premium in cash.
c) The market value of investments was Rs24,000
d) Machinery will be reduced to Rs29,000
e) Creditor of Rs3000 was not likely to claim the amount and hence to be written off
f) D will bring proportionate capital so as to give him 1/6 th share in profits of the firm.
Prepare revaluation a/c, partners’ capital a/c and balance sheet .