Subject: Accountancy
Class XII
Time Allowed: 3 hours
Max. Marks: 80
General Instructions:
a) All Sections are compulsory.
b) Section – A, questions carry I mark each.
c) Section – B, questions carry 3 marks each.
d) Section – C questions carry 4 marks each.
e) Section – D, questions carry 6 marks each.
Section – A
1. Asha and Nisha are partner’s sharing profits in the ratio of 2:1. Kashish was admitted for 1/4 share of which 1/8 was gifted by Asha. The remaining was contributed by Nisha. Goodwill of the firm is valued at Rs. 40,000. How much amount for goodwill will be credited to Nisha’s Capital account?
a) Rs. 2,500
b) Rs. 5,000
c) Rs. 20,000
d) Rs. 40,000
2. At the time of admission of new partner Vasu, Old partners Paresh and Prabhav had debtors of Rs.6,20,000 and a provision for doubtful debts of Rs. 20,000 in their books. As per terms of admission, assets were revalued, and it was found that debtors worth Rs. 15,000 had turned bad and hence should be written off. Which journal entry reflects the correct accounting treatment of the above situation.
3.Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R)
Assertion (A): Transfer to reserves is shown in P& L Appropriation A/c.
Reason (R): Reserves are charge against the profits. In the context of the above statements, which one of the following is correct?
Codes: (A)
a) is correct, but (R) is wrong
b) Both (A) and (R) are correct.
c) (A) is wrong, but (R) is correct.
d) Both (A) and (R) are wrong.
4. Anubhav, Shagun and Pulkit are partners in a firm sharing profits and losses in the ratio of 2:2:1. On 1st April 2021, they decided to change their profit-sharing ratio to 5:3:2. On that date, debit balance of Profit & Loss A/C Rs. 30,000 appeared in the balance sheet and partners decided to pass an adjusting entry for it. Which of the under mentioned options reflect correct treatment for the above treatment?
a) Shagun’s capital account will be debited by Rs. 3,000 and Anubhav’s capital account credited by Rs. 3,000
b) Pulkit’s capital account will be credited by Rs. 3,000 and Shagun’s capital account will be credited by Rs. 3,000
c) Shagun’s capital account will be debited by Rs. 30,000 and Anubhav’s capital account credited by Rs. 30,000
d) Shagun’s capital account will be debited by Rs. 3,000 and Anubhav’s and Pulkit’s capital account credited by Rs. 2,000 and Rs. 1,000 respectively.
5. A, B and C are partners, their partnership deed provides for interest on drawings at 8% per annum. B withdrew a fixed amount in the middle of every month and his interest on drawings amounted to Rs. 4,800 at the end of the year. What was the amount of his monthly drawings?
a) Rs. 10,000.
b) Rs. 5,000.
c) Rs.1,20,000.
d) Rs. 48,000.
6. Abhay and Baldwin are partners sharing profit in the ratio 3:1. On 31st March 2021, firm’s net profit is Rs.1,25,000. The partnership deed provided interest on capital to Abhay and Baldwin Rs. 15,000 & Rs. 10,000 respectively and Interest on drawings for the year amounted to Rs.6000 from Abhay and Rs.4000 from Baldwin. Abhay is also entitled to commission@10% on net divisible profits. Calculate profit to be transferred to Partners Capital A/c’s.
a) Rs.1,00,000
b) Rs.1,10,000
c) Rs.1,07,000
d) Rs. 90,000
*Question no.’s 16 and 17 are based on the hypothetical situation given below.
On 1st September 2020, twenty students of Modern College started their Partnership Firm in the name of “Be Safe” for selling sanitizers on digital mode. Since they were good friends of each other, they were not having any explicit agreement in place. All of them have agreed to invest Rs. 15,000/- each as capital. The books were closed on 31st March 2021, on which date the following information was provided by the firm: PARTICULARS AMOUNT (Rs.) Sale of Sanitizers 1,20,000 Cost of goods sold 50,000 Total Remuneration to partners 2,000 per month Rent to a partner 1,000 per month Manager’s Commission 5,000 Closing Stock as on March 31,2021 9,000 6% Fixed Deposit (made on 31.3.2021) 20,000
7. Calculate the amount of profits to be transferred to Profit and Loss Appropriation Account –
(A) Profit Rs. 58,000
(B) Profit Rs. 44,000
(C) Profit Rs. 59,200
(D) Profit Rs. 58,700
8. On 31st March 2021, Remuneration to Partners will be provided to the partners of “Be Safe” but only out of
(A) Profits for the accounting year
(B) Reserves
(C) Accumulated Profits
(D) Goodwill
9. A and B are partners sharing profit and loss in 1:1 ratio. Having capital Rs.100000 and Rs. 50000. Interest on capital is payable @ 10% per annum i.e. Rs. 10000 and Rs. 5000 respectively to A and B. The profit for the year was Rs. 9000. What amount of profit or loss will be transferred to partners’ capital account.
(A) A: 6000 and B:3000 profit
(B) A: 4500 and B: 4500 profit
(C) No profit will be distributed
(D) Only IOC will be paid in 2:1 ratio
10. Arun and Vijay are partners in a firm sharing profits and losses in the ratio of 5:1.
Balance Sheet (Extract)
Liabilities Rs. Assets. Rs.
….. Machinery 40,000
If the value of machinery reflected in the balance sheet is overvalued by 33 %, find out the value of Machinery to be shown in the new Balance Sheet:
a) Rs. 44,000
b) Rs. 48,000
c) Rs. 32,000
d) Rs. 30,000
11. Which of the following is true regarding Salary to a partner when the firm maintains fluctuating capital accounts?
a) Debit Partner’s Loan A/c and Credit P & L Appropriation A/c.
b) Debit P & L A/c and Credit Partner’s Capital A/c.
c) Debit P &L Appropriation A/c and Credit Partner’s Current A/c.
d) Debit P &L Appropriation A/e and Credit Partner’s Capital A/c.
12. E, F and G are partners sharing profits in the ratio of 3:3:2. According to the partnership agreement. G is to get a minimum amount of Rs. 80,000 as his share of profits every year and any deficiency on this account is to be personally borne by E. The net profit for the year ended 31st March 2021 amounted to Rs.3,12 ,000. Calculate the amount of deficiency to be borne by E?
a) Rs. 1,000
b) Rs. 4.000
c) Rs. 8,000
d) Rs. 2.000
13. At the time of admission of a partner, what will be the effect of the following information? Balance in Workmen compensation reserve Rs. 40,000. Claim for workmen compensation Rs. 45,000.
a) Rs. 45,000 Debited to the Partner’s capital Accounts.
b) Rs. 40,000 Debited to Revaluation Account.
c) Rs. 5,000 Debited to Revaluation Account.
d) Rs. 5,000 Credited to Revaluation Account.
14. In the absence of partnership deed, a partner is entitled to an interest on the amount of additional capital advanced by him to the firm at a rate of.
a) entitled for 6% p.a. on their additional capital, only when there are profits.
b) entitled for 10% p.a. on their additional capital
c) entitled for 12% p.a. on their additional capital
d) not entitled for any interest on their additional capitals.
15. If average capital employed in a firm is Rs.8,00,000, average of actual profits is Rs. 1,80,000 and normal rate of return is10%, then value of goodwill as per capitalization of average profits is:
(A) Rs.10,00,000
(B) Rs.18,00,000
(C) Rs.80,00,000
(D) Rs.78,20,000
16. Kalki and Kumud were partners sharing profits and losses in the ratio of 5:3. On 1st April,2021 they admitted Kaushtubh as a new partner and new ratio was decided as 3:2:1. Goodwill of the firm was valued as Rs.3,60,000. Kaushtubh couldn’t bring any amount for goodwill. Amount of goodwill share to be credited to Kalki and Kumud Account’s will be: –
(A) Rs. 37,500 and Rs. 22,500 respectively
(B) Rs. 30,000 and Rs. 30,000 respectively
(C) Rs. 36,000 and Rs. 24,000 respectively
(D) Rs. 45,000 and Rs. 15,000 respectively
17. Sarvesh, Sriniketan and Srinivas are partners in the ratio of 5:3: 2. If Sriniketan’s share of profit at the end of the year amounted to Rs.1,50,000, what will be Sarvesh’s share of profits?
(A) Rs.5,00,000.
(B) Rs.1,50,000.
(C) Rs.3,00,000.
(D) Rs.2,50,000
18. A, B and C are partners in 2:3:2 ratios. They decided to change the ratio to 3:2:1. The cost of investment was 400000 and investment fluctuation reserves was 50000 which of the following journal is correct if the market value of investment reduced to 330000.
19. The correct entry for liability taken over by partner at a values then the book value will be
20. Angle and Circle ware partners in a firm. Their Balance Sheet showed Furniture at Rs.2,00,000; Stock at Rs.1,40,000; Debtors at Rs.1,62,000 and Creditors at Rs. 60,000. Square was admitted and new profit-sharing ratio was agreed at 2:3:5. Stock was revalued at Rs.1,00,000, Creditors of Rs. 15,000 are not likely to be claimed, Debtors for Rs. 2,000 have become irrecoverable and Provision for doubtful debts to be provided @ 10%. Angle’s share in loss on revaluation amounted to Rs. 30,000. Revalued value of Furniture will be:
(A) Rs. 2,17,000
(B) Rs. 1,03,000
(C) Rs. 3,03,000
(D) Rs. 183,000
Section B
21. Veena and Soma were partners in a firm with capital of Rs. 100000 and Rs. 80000 respectively. They admitted Nisha on 1st April 2022 as a new partner for 1/4th share in the future profits of the firm. Nisha brought Rs. 90000 as her capital. Nisha acquired her share 1/12 from Veena and the remaining from Soma. Calculate the value of goodwill of the firm and pass the necessary journal entry on Nisha’s admission, if Nisha did not bring her share of goodwill.
22. Raka, Seema and Mahesh were partners sharing profit and loss in the ratio 5:3:2. With effect from 1st April 2022 they mutually agree to share profit and loss in the ratio 2:2:1.
On that date there was a workmen’s compensation fund of Rs. 90000 in the books of the firm. It was agreed that:
(i) Goodwill of the firm be valued at Rs. 70000.
(ii) Claim for workmen’s compensation amounted Rs. 40000.
(ii) Profit on revaluation of assets and re-assessment of liabilities amounted to Rs. 40000
Pass necessary journal entries for the above transactions in the book of the firms.
23. X, Y and Z are partners in the firm sharing profit in the ratio 4:3:3. Their fixed capitals on 1st April 2021 were Rs. 9 lakhs, Rs. 5 lakhs and Rs. 4 lakhs the respectively. On 1st November 2021 X gave loan of Rs. 80000 to the Firm. As per partnership agreement the partners were entitle to an interest on capital at the rate 6% per annum. Interest on partner’s drawings were to be charged at the rate 8% per annum. The firm earn profit of Rs. 253000 (after interest on X loan). During the year 2021- 22 partner’s drawings for the year amounting to Rs. 80000, Rs. 70000 and Rs. 50000. Prepare profit and loss appropriation account for the year ending 31st March 2022.
24. A&B are partners in the ratio of 3:2. The firm maintains fluctuating capital accounts and the balance of the same as on 31-03-2020 amounted to RS.1,60,000 and Rs.1,40,000 for A and B respectively. Their drawings during the year were Rs. 30,000 each.
As per partnership deed interest on capital @10% p.a. on opening capitals had been provided to them. Calculate opening capitals of partners given that their profits were Rs. 90,000. Show your workings clearly.
OR
Puneet and Akshra were partners in firm sharing profit and losses in the ratio of 2:3. The following was the balance sheet of the firm as on 31st March 2022.
The profits Rs. 40000 for the year ended 31st March 2022 were divided between the partners without allowing interest on capital @ 5%p.a. and the commission to Akshra @Rs.1000 per quarter.
Show your working clearly adjustment entry in the books of firm.
25. Harihar, Hemang and Harit were partners with fixed capital of Rs. 3 lakhs, Rs. 2 lakhs and Rs. 1 lakh respectively. They shared profits in the ratio of their fixed capitals. Harit died on 31st May 2022 whereas the firm closed its books of accounts on 31st March every year. According to their partnership deed, Harit’s representatives would be entitled to get share in the interim profits of the firm on the basis of sales. Sales and profit for the year 2021 – 22 amounted to R. 800000 and Rs. 240000 respectively and sales from 1st April 2022 to 31st May 2022 amounted to Rs. 150000. The rate of profit to sales remained constant during these two years.
(i) You are required to calculate Harish share in profit.
(ii) Pass journal entry to record Harish share in profit.
26. Ranjan and Vishal were partners in a firm and their books showed that on 31st March, 2018 their capital employed was Rs.3,00,000. The normal rate of return on capital employed is 15%. During the year ended 31st March, 2018 the firm earned a profit of Rs. 58,000. Calculate goodwill on the basis of 3 years’ purchase of super profits.
Section C
27. P.Q and R were partners in a firm sharing profit and losses in the ratio of 3:3:2. R died on 30th June 2016. After all the necessary adjustment, his capital account shows a credit balance 80600. R’s executor was paid 20600 on 1st July 2016 and balance in 3 equal yearly installments starting from 30th 2017 with interest @10% p.a. on unpaid amount. The firm closes its books on 31st March every year.
Prepare R’s executor’s account till amount is finally paid.
Arun, Shobha and Yuvraj were partners in the firm on 1st April 2021. There fixed capitals stood at Rs. 100000, Rs. 50000 and Rs. 50000 respectively. As per the provision of partnership deed:
(i) Partners were entitled to an annual salary of Rs. 20000 each
(ii) Interest on capital at the rate 10% per annum was to be provided
(iii) Profits were to be shared in the ratio 3:1:1
Net profit for the year ending 31st March 2022 was Rs. 90000. Pass journal entries for the above in the books of the firm.
OR
28. On 31st March, 2022 the balance in the capital accounts of Asha, Nisha and Disha after making adjustments for profit and drawings were Rs. 150000, Rs. 120000 and Rs. 90000 respectively. Subsequently it was a discovered that interest on drawing have been omitted. The partners were entitled to interest on capital at the rate 10% per annum and interest on drawing was also to be charged at the rate 10% per annum. The drawings during the year were: Asha Rs. 50000; Nisha Rs. 60000 and Disha Rs. 30000. The net profit for the year ending 31st March 2022 amount to Rs. 100000. The profit sharing ratio was 2:2:1. Pass necessary adjustment entry and also show your working clearly.
29. Mona and Sona were Partners in the firm sharing profit and losses in the ratio 2:3. on 31st March 2022, their Balance sheet was as follows:
The firm was dissolved on 1st April 2022 and the assets and liabilities were settled as follows:
i) Half of the creditors accepted 50% stock. Remaining creditors were paid in full.
(ii) The remaining stock was realised at 90% and the debtors realised 80% of their book value.
(iii) Sona took over the responsibility to realise the assets and liabilities at a remuneration of Rs. 20000 and was to bear all expenses of realisation. She paid realisation expenses of Rs. 18000 out of her personal account.
(iv) Land and building realised at Rs. 700000.
Prepare Realisation Account.
Section D
30. Brijesh, Charu and Dilip are partners sharing profits and losses in the ratio of 3:2:1. Their balance sheet as 31st March 2022 was as follows:
The partners agreed that from 1st April 2022 they will share profits and losses in the ratio of 4:4:1. They agreed that:
i) Stock is to be valued at 20% less.
(ii) Provision for doubtful debts to be increased by Rs. 1,500
(iii) Furniture is to be depreciated by 20% and plant by 15%.
(iv) Rs. 3,500 are outstanding for salaries.
(v) Building is to be valued at Rs.3,50,000.
(vi) Goodwill is valued at Rs. 45,000.
Partners do not want to record the altered values of assets and liabilities in the books and want to leave the reserves and profits undistributed. They also decided not to how goodwill in the books.
You are required to pass a single journal entry to give effect to the above. Also prepare the revised balance sheet.
31. X,Y and Z were partners in a firm sharing profits and losses in the ratio of 5:3:2 on 31.3.2020 their Balance Sheet was as follows:
Z did on 31.7.2020. It was agreed that:
(a) Goodwill be valued at 2 ½ year’s purchase of the average profits of the last four years, which were as follows:
Year Profits (Rs.)
2016 – 2017 32,500
2017 – 2018 30,000
2018 – 2019 40,000
2009 – 2020 37,500
(b) Machinery be valued at Rs. 70,000; patents at Rs. 20,000 and Building at Rs. 62,500.
(c) For the purpose of calculating Z’s share of profits in the year of his death the profits in 2020-2021 should be taken to have been accrued on the same scale as in 2019-2020.
(d) A sum of Rs. 17,500 was paid immediately to the executors of Z and the balance was paid in four half yearly installments together with interest at 12% p.a. starting from 31.1.2021
Give necessary journal entries to record the above transactions and Z’s executor’s account till the payment of installments due on 31.1.2021.
Note: The firm closes its accounts on 31 Mach every year.
32. Madhuri and Arsh were partners in a firm sharing profit and losses in the ratio of 3:1. Their balance sheet as on 31st March 2022 was as follows:
On 1st April 2022 they admitted Jyoti into partnership for 1/4th share in the profit of the firm. Jyoti brought proportionate capital and Rs. 40000 as her share of goodwill premium. The following terms were agreed upon:
(i) Provision for doubtful debts was to be maintained at 10% on debtors.
(ii) Stock was undervalued by Rs. 10000.
(iii) An old customer whose account was written off as bad, paid Rs.15000.
(iv) 20% of the investments were taken over by Arsh at book value.
(v) Claim on account of workmen’s compensation amount to Rs. 70000, which was to be paid later.
(vi) Creditors included Assam of 27000 which was not likely to be claimed.
Prepare revaluation account partners’ capital account and the balance sheet of the reconstituted firm.
33. Pratik, Neeraj and Umang were partners in a firm sharing profit and losses in the ratio of 7:2:1. The firm was dissolved on 31st March 2022. After transfer of assets (other than cash) and external liabilities to the realisation account the following transactions took place:
(i) Furmiture Rs. 45000 was sold by auction for Rs. 66000 and the auctioneers commission amounted to Rs. 2000.
(ii) Office equipment Rs. 90000 was taken over by creditors for the book value of Rs. 82000 in full settlement.
(iii) Umang had given alone of Rs. 109000 to the firm. He accepted Rs. 100000 in full settlement of his loan.
(iv) Investments were Rs. 53000 out of which Rs. 23000 was taken over by Neeraj at Rs. 25000, balance of the investment was sold at Rs. 35000.
(v) Expenses incurred on dissolution were Rs. 21000 and were paid by Prateek.
(vi) The firm had a Debit balance of Rs. 40000 in the profit and loss account.
Pass necessary journal entries for the above transactions in the books of the firm (assuming that partners’ capital was fixed).
34. Anita. Gaurav and Sonu were partners in a firm sharing profit and loss in proportion of their capitals. Their Balance sheet as on 31st March 2022 was as follows:
On the above date, Anita retired from the firm and the remaining partners decided to carry on the business. It was agreed to revalue the assets and liabilities as follows:
(i) Goodwill of the firm was valued at Rs. 300000.
(ii) Land and building were undervalued by 20%.
(iii) Bad debt amounted to Rs. 20000. A provision for doubtful debt to be created at 10% on debtors.
(iv) Investments were sold through cheque at the market value, which was Rs. 110000.
(v) Anita was paid immediately by cheque an amount leaving Rs. 100000 in bank account for working capital and the balance was to be transferred to her loan account which was to be paid in two equal installments along with interest @ 10% p.a.
Prepare the Revaluation account, Partners capital account and the Balance sheet of the reconstituted firm on Anita’s retirement.
OR
The balance sheet of Ashish, Suresh and Lokesh were sharing profits in the ratio of 5:3:2, is given below as on March 31, 2022.
Suresh retires on June 30, 2022 date and the following adjustments are agreed upon his retirement.
(i) Stock was valued at Rs. 172000. Furniture and fittings were valued at Rs. 80000
(ii) Profit share of Suresh till the date of his retirement is to be calculated on the basis of firm’s last year profit Rs. 200000
(ii) An amount of Rs. 10000 due from Mr. Deepak a debtor was doubtful and a provision for the same was required.
(iv) Goodwill of the firm was valued at Rs. 200000.
(v) Suresh was paid Rs. 40000 immediately on the retirement and the balance was transferred to his personal loan account.
(vi) Ashish and Lokesh were to share the future profits in the ratio of 3:2.
Prepare Revaluation account, Partners capital account and Balance sheet of the newly reconstituted firm.