ITL PUBLIC SCHOOL

PRE PREDIODIC TEST -1 ASSIGNMENT (2022-23)

Date:22.07.22 Class:XII
ACCOUNTANCY(055)
Time:1 hr 30 min M. M: 40
General Instructions:
 All questions are compulsory.
 Marks for each question are indicated against it.
 Attempt all parts of a question together.

Read the following text and answer questions from 1 to 4

Monu, Nigam and Shreya were partners in a firm , running a cosmetic business for the past 5 years . Their
products were in all leading chain stores like sephora, Lifestyle etc.
They shared profits and losses in the ratio of 4:3:1. The firm closes its books on 31 March every year. As
per the terms of Partnership Deed on the death of any partner , the share of goodwill of the deceased partner
will be calculated on the basis of 50% of the net profits credited to that partner’s capital account during the
last four completed years before death.
Monu died on 1st July 2020 due to Covid 19 . The profits for the last four years were:-
Year Profits (Rs.)
2016-17 97,000
2017-18 1,05,000
2018-19 30,000
2019-20 84,000
His share of profit in the year of his death was to be calculated on the basis of sales.
Sales for the year ended 31st March 2020 amounted to Rs.21,00,000. From 1 st April 2020 till date of death
sales were Rs. 2,00,000
1 What journal entry will be passed for Transfer of Monu’s share of goodwill ? 1
(a) Nigam cap a/c dr. 59,250
Shreya cap a/c dr. 19,750
To Monu cap a/c 79,000
(b) Nigam cap a/c dr. 118,500
Shreya cap a/c dr. 39,500
To Monu cap a/c 158,000
(c) Goodwill a/c Dr. 158,000
To Monu Cap a/c 79,000
To Nigam cap a/c 59250
To shreya cap a/c 19750
(d) Goodwill a/c Dr. 79,000
To Monu Cap a/c 79,000
Ans :- (a)
2 Calculate the amount of Monu’s share in profits for the year 2020-21? 1
(a) Rs. 4000
(b) Rs. 8000
(c) Rs. 10,500
(d) Rs. 9,875
Ans :- (a)

3 Monu’s share in profits will be transferred to his capital a/c by debiting ____________________ a/c 1
Ans :- profit and loss suspense a/c

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4 In case the firm decides to pay Monu’s share of capital , goodwill and profit by cash the following journal 1
entry will be passed
(a) Monu’s capital a/c dr
To bank a/c
(b) Monu’s loan a/c dr
To bank a/c
(c) Monu’s executor’s a/c dr.
To bank a/c
(d) Monu’s executor’s loan a/c dr.
To bank a/c
Ans :- (c)
5 A and B are partners, C joins them and it is decided that A’s share will be half of B’s share and C’s share 1
will be one third of A’s share, Find the new profit sharing ratio.

6 A, B and C were partners sharing profits and losses in the ratio of 5:3:2 . They admitted D into partnership 1
for 1/6th share in profits , half of which was given by A and the remaining half was given by B and C in the
ratio 3:2. Find out the new profit sharing ratio
Ans – New PSR = 5:3:2:2
7 A and B are partners sharing profits in the ratio of 3 : 2. On admission of C for 1/5th share, Land is 1
appreciated by 10% (Book Value Rs. 80,000),Building is decreased by 20% (Rs. 2,00,000), Unrecorded
Debtors of Rs. 1,250 are bought in the books and Creditors of Rs. 2,750 need not be paid. The Gain
(profit) /loss on revaluation will be:
(a) Loss Rs. 28,000
(b) Loss Rs. 40,000
(c) Profit Rs. 28,000
(d) Profit Rs. 40,000
8 A, B and C are partners in a firm sharing profit and losses in 3:4:2 B retire from the firm. The profit on 1
revaluation on that date was Rs. 72,000, New ratio between A and C is 5:3. Profit on revaluation will be
distributed as:
(a) A Rs. 32,000 B Rs. 24,000 C Rs. 16,000
(b) ARs. 24,000 B Rs. 32,000 C Rs. 16,000
(c) A Rs. 45,000 C Rs. 27,000
(d) A Rs. 47,250 C Rs. 24,750
9 X and Y are partners. Their profit sharing ratio is 3:2 and their capitals are Rs. 2,00,000 and Rs. 1,00,000 1
respectively. Z is admitted to ¼ share in the profit for which he brings Rs. 1,25,000 as capital. Profit and
loss debit balance is Rs. 60,000. Also general reserve appears at Rs. 40,000.
Find Z’s share of goodwill.
Ans- 23750
10 Ahmed and Balwant share profits and losses in the ratio of 3: 2. Their respective capitals are Rs. 1,20,000 1
and Rs. 54,000. Chetan is admitted for 1/3rd share in profits who brings Rs. 75,000 as his share of capital.
Capitals of Ahmed and Balwant to be adjusted according to Chetan’s share. Ahmed will withdraw from
capital ?

a. Rs. 30,000
b. Rs. 32,000
c. Rs. 15,000
d. Rs. 28,000
11 Amit and Kartik are partners sharing profits and losses in the ratio 3:1. They decided to admit Saurabh for 3
1/3rd share in the profits and the new profit sharing ratio is equal . For this purpose the goodwill of the firm
was to be valued at four years purchase of super profits .
The balance sheet of Amit and Kartik was as follows
Liabilities Amt Assets Amt
Creditors 5,000 Bank 50,000
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 loan 25,000 Stock 30,000
Reserve 20,000 Machinery 75,000
Capital : Amit 90,000 Debtors 20,000
50,000 Furniture 15,000
Kartik
1,90,000 1,90,000
The normal rate of return is 12%. Profits of the firm for last three years were Rs. 32,000; Rs. 26,000; Rs.
32,000 .
Pass the journal entries for adjustment of goodwill on Saurabh’s admission assuming that Saurabh is only
able to bring 60% of his share of goodwill in cash.

12 J, K, and L were partners in the ratio 5:3:2. They admit M for 1/10 share. It was agreed that K will retain 3
his original share . M brought machinery worth Rs. 50,000 and Furniture worth Rs. 20,000 for his share of
profits as premium for goodwill out of his share of Rs.105,000. He was unable to bring his remaining share
in cash . For this purpose , it was decided to reduce his capital for the remaining amount of premium.
Showing your working notes clearly , pass necessary journal entries .
13 Aman, Amar and Amol were partners sharing profits in the ratio of 3:2:1. Aman retired on 1 st April 4
2015 and his share was taken over by Amar and Amol in the ratio of 3:1. The amount due to
Aman,Rs.3,00,000, was transferred to his loan account without any agreement towards interest. On the
same date the capital balance of Amar and Amol was Rs. 8,00,000 and Rs. 4,00,000.During the year 2015
– 2016 the firm made a profit of Rs.1,32,000 before providing for interest@ 6% p.a. on Aman’s loan. But
Aman was not satisfied and he asked for more share.
You are required to settle the dispute as per section 37 of Indian Partnership Act. Also prepare the P/L
Appropriation A/c.

14 Rose, Jasmine and Marigold are partners in a firm sharing profits in the ratio of 4:3:2.On 1st April 2014, 6
Jasmine gave a notice to retire from the firm. Rose and Marigold decided to share future profits in the ratio
of 1:1.The capital accounts of Rose and Marigold after all adjustments showed a balance of ₹ 43,000 and ₹
80,500 respectively. The total amount to be paid to Jasmine was ₹ 95,500.This amount was to be paid by
Rose and Marigold in such a way that their capitals become proportionate to their new profit sharing ratio.
Pass necessary Journal Entries in the books of the firm for the above transactions. Show your working
clearly.
15 M,N & O were partners in a firm sharing profits & losses in the ratio of 3:2:1. Their Balance Sheet on 6
31/12/14 was as follows:

Liabilities Amount (Rs) Assets Amount (Rs)

Capitals: Plant & Machinery 60,000
M 70000 Stock 30,000
N 70000 Sundry Debtors 95,000
O 70000 2,10,000 Cash at Bank 40,000
General Reserve 30,000 Cash in Hand 35,000
Creditors 20,000
2,60,000 2,60,000
N died on 14th March 2015. According to the Partnership Deed, executors of the deceased partner
are entitled to:
(i) Balance of partner’s capital account.
(ii) Interest on capital @5%p.a.
(iii) Share of goodwill calculated on the basis of twice the average of the past three year’s profits
(iv) Share of profits from the closure of the last accounting year till the date of death on the basis
of twice the average of three completed year’s profits before death.
Profits for 2012, 2013 & 2014 were Rs 80,000; Rs 90000 & Rs 1,00,000 resp.
The partnership deed also provided that the following deductions will be made from the amount payable to
the executor of the deceased partner:
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 (i) His drawings in the year till the date of death were Rs 4000.
(ii) Interest on drawings @6%p.a
The accountant of the firm prepared N’s capital account to be presented to the executor of N, but in a hurry
he left it incomplete. N’s capital account prepared by the accountant of the firm is shown below:
Dr N’s capital Account Cr
Date Particulars Amt (Rs) Date Particulars Amt(Rs)
2015 2015
14 March ------------ -------- 1 April -------------- 70000
14 March -------------- --------- 14March ------------ 700
14 March ------------ --------- 14March -------------- 12000
14March ------------------ 45000
14March ----------------- 15000
14March ----------- 10000
152700 152700

You are required to complete N’s capital Account.

16 A and B are partners sharing profits in the ratio 3:2. Their Balance Sheet as on 31st March 2015 was as 8
follows:

Liabilities Rs. Assets Rs.

Creditors 86,000 Bank 77,000
Employees Provident Fund 10,000 Debtors 42,000
Less:- Provision for
Doubtful debts (7,000) 35,000
Investment Fluctuation 4,000 Investments 21,000
reserve
A’s capital a/c 1,19,000 Building Premises 98,000
B’s capital a/c 1,12,000 Plant and Machinery 1,00,000
3,31,000 3,31,000
C was admitted on that date for 1/4 share of profit on the following terms:
th

(i) C will bring Rs. 50,000 as his capital.

(ii) Goodwill of the firm is valued at Rs. 42,000.
(iii) Building was appreciated by 20%.
(iv) All debtors were good.
(v) Market value of investments were Rs.15,000, A and B took the investments equally at this
value.
(vi) New profit sharing ratio be 2:1:1.
(vii) Capitals of A and B will be adjusted on the basis of C’s share of capital and any excess or
deficiency will be made by withdrawing or bringing in cash by the partners as the case may be.
Prepare Revaluation a/c , Partners Capital a/c and Balance Sheet of the newly constituted firm.
OR
Following is the Balance Sheet of Latika, Meetika and Neetika , who were sharing profits in the ratio 2:2:3 ,
as on 31st March 2016
Liabilities Rs. Assets Rs.
Creditors 1,60,000 Bank 80,000
Employees Provident Fund 76,000 Debtors 4,00,000
Bank overdraft 44,000 Investments 2,00,000
Long term debts 4,00,000 Stock 8,00,000
Latika’s capital a/c 12,50,000 Plant and Machinery 5,00 ,000
Meetika’s capital a/c 8,00,000 Furniture 7,00,000
Neetika’s capital a/c 10,50,000 Land and building 10,00,000
Deferred revenue expenditure 1,00,000

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 37,80,000 37,80,000
On the same date , Meetka retired from the business and the remaining partners decided to carry on the
business . It was decided to revalue the assets and liabilities as under:
(i) Land and building to be appreciated by Rs. 2,40,000 and machinery be depreciated by 10%.
(ii) 50% of Investments were taken over by the retiring partner at book value.
(iii) An old customer Mohit whose account was written off as bad debts had promised to pay
Rs.7,000 in settlement of his full debt of Rs. 10,000.
(iv) Provision of doubtful debts was to be made at 5% on debtors.
(v) Stock will be valued at market price which is Rs. 1,00,000 less than the book value.
(vi) Goodwill of the firm is valued at Rs. 5,60,000. Meetika’s share of goodwill be adjusted in the
accounts of Latika and Neetika who decided to share future profits in the ratio 3:2.
(vii) The total capital of the new firm will be Rs. 32,00,000 which will be in proportion of the profit
sharing ratio of Latika and neetika.
(viii) Meetika was to be paid Rs.51,429 in cheque immediately and balance was paid in two equal
quarterly installments .
Prepare Revaluation a/s, Partner capital a/c and Balance Sheet of the new firm.

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