MONTHLY TEST (SEPT’24)

Class: XII Marking Scheme Subject: Accountancy

M.M.: 80 Time: 03 Hrs.
Instructions:
(a) Questions 1 to 10 carry one mark. Questions 11 to 13 carries four marks. Questions 14 to 16 carries six marks.
(b) All questions are compulsory. Show your workings wherever necessary.
(01) A partner withdrawn ₹ 3,000 at the middle of every month from firm for 10 months. Firm charged interest on drawing @
12% p.a. The amount of interest on drawing to be charged: 30,000x5/12x12/100
(A) ₹ 150 (B) ₹ 1,500 (C) ₹ 360 (D) ₹ 3,600
OR
A partner withdrew ₹ 10,000 at the end of each quarter. Firm charged interest on drawing @ 12% p.a. The amount of
interest on drawings will be: 40,000 x 12/100 x 4.5/12 = 1,800
(A) ₹ 450 (B) ₹ 4,800 (C) ₹ 1,800 (D) ₹ 1,600
(02) State two circumstances under which fixed capital account of partners to be changed.
OR
Capital employed in a firm ₹ 3,20,000 and average profits for three years ₹ 45,000. If super profits of the firm are ₹ 13,000
then the normal rate of return will be 10%. (fill in the blank)
(03) A, B and C were partners in a firm sharing profits & losses in 3:2:1 ratio. The profits for the year ending 31 st March,
2024, ₹ 3,00,000 was wrongly distributed in equal ratio. If capitals of partners were fixed then which of the following
accounting treatment is correct for the adjustments about profit-sharing:
(A) A’s current A/c debited by ₹ 50,000 (B) C’s current A/c credited by ₹ 50,000
(C) C’s current A/c debited by ₹ 50,000 (D) A’s capital A/c credited by ₹ 50,000
(04) Which one of the following sequences is correct for the settlement of liabilities of a dissolved firm?
(1) Partner’s Loan A/c (2) Claim for workmen’s compensation
(3) Cr. balance of partner’s current A/c
Choose the correct option from the following:
(A) 1, 2 & 3 (B) 2, 3 & 1 (C) 3, 2 & 1 (D) 2, 1 & 3
(05) The balance of stock ₹ 45,000. A creditor of ₹ 12,000 took over 1/3rd of stock at ₹ 10,000 and 1/3rd of the balance of stock
took over by a partner ‘X’ at 10% less and remaining stock realized at
₹ 16,000. Which of the following is not correct entry on the dissolution of a firm?
(A) Realization A/c Dr. 2,000 (B) Bank A/c Dr 16,000
To Bank A/c 2,000 X’s Capital A/c Dr. 9,000
To Realization A/c 25,000
(C) Only (B) is correct (D) Both the entries (A) and (B) are correct
(06) Jagan, Murari and Gopal are partners in a firm sharing profits & losses in equal proportion. They decided to share future
profits & losses other than the equal proportion. In the new profit-sharing ratio, Gopal sacrifice for 2/15th share. The
gaining share between Jagan and Murari is 1:1.
The new profit-sharing ratio between Jagan, Murari and Gopal is 2:2:1. (fill in the blank).
OR
Assertion: Interest on partner’s loan to be allowed @ 10 % p.a. otherwise as mentioned in the agreement between partners.
Reason: Accounting in partnership regulated with the terms of Partnership Deed.
Choose the correct answer from the following:
(A) Assertion and Reason is correct but Reason is not correct explanation of Assertion.
(B) Assertion is correct but Reason is wrong.
(C) Assertion and Reason is correct and Reason is correct explanation of Assertion.
(D) Assertion is wrong but Reason is correct statement.
(07) Aakash and Bhuvan were partners in a firm. Kshitij admitted as a new partner for 1/3rd share. There was a balance of
General Reserve of ₹ 9,000. All partners are agreed that the book value of general reserve should not be affected and for
which an adjustment entry to be make.
Pass necessary journal entry for the adjustment of general reserve on admission of Kshitij.
Kshitij’s Capital A/c Dr. 3,000
To Aakash’s Capital A/c 1,500
To Bhuvan’s Capital A/c 1,500
(08) P and Q were partners in a firm sharing profits & losses in 5:3:2 ratio. R admitted into partnership for 1/3 rd share. The
new profit-sharing ratio between P, Q and R is 4:2:3. On admission of R, goodwill of the firm valued at ₹ 72,000. R
brought in cash ₹ 3,00,000 for share capital and necessary cash for premium of goodwill.
Which of the following accounting treatment is not correct on admission of R? 10000 + 14000
(A) Cash A/c debited by ₹ 3,24,000 (B) P’s Capital A/c credited by ₹ 10,000
(C) Q’s capital A/c credited by ₹ 14,000 (D) None of these
(09) Anjali, Divanshee and Roshni were partners in a firm. Roshni retires from the firm on 31 st March, 2024. On the date of
her retirement, there was a balance in her capital account ₹ 2,80,000.
₹ 50,000 immediately paid to her and balance to be paid in three equal half-yearly installments together with 10% p.a.
interest.
The amount of capital will be transferred to her Loan Account ₹ 2,30,000. (fill in the blank)
(10) X, Y and Z were partners in a firm sharing profits & losses in 2:2:1 ratio. X died on 30th June, 2024. The partnership deed
stated that on the death of a partner, share of profits of the deceased partner’s to be calculated on the basis of turnover of
the year and profits. Sales turnover for the year 2023-24 ₹ 6,00,000 and profits for the same period was ₹ 1,20,000.
Sales turn over from 1st April, 2024 to 30th June, 2024 was ₹ 2,00,000.
Which of the following accounting treatment for share of profit of X is not correct?
(A) ₹ 16,000 credited to his executor’s A/c (B) ₹ 16,000 credited to his capital A/c
(C) ₹ 16,000 debited to profit & loss suspense A/c (D) None of these
(11) Chiranjiv and Eklavya are partners in a firm sharing profits & losses in 3:2 ratio. As on 1 st April, 2023, the balance of
their capitals was ₹ 5,00,000 and ₹ 3,00,000 respectively. Profits for the year ending 31 st March, 2024 ₹ 1,80,000. Interest
on capital allowed to partners @ 10 % p.a. and salary allowed to Eklavya ₹ 40,000 p.a. Chiranjiv have given guarantee to
Eklavya that his profits should not be less than
₹ 30,000 in any year. Prepare Profit & Loss Appropriation Account from the above information.
Interest on capital: 80,000 Profit & Loss A/c 1,80,000
Chiranjiv 50,000
Eklavya 30,000
Salary to Eklavya 40,000
Capital A/cs: (share in profits) 60,000
Chiranjiv 36,000
Less: Guarantee of profit given (6,000)
30,000
Eklavya 24,000
Add: Guarantee of profit received 6,000
30,000
1,80,000 1,80,000
OR
Manoj, Himanshee and Ranjita are partners in a firm with a fixed capital of ₹ 2,40,000; ₹ 1,80,000 and ₹ 1,20,000. The
profits of the firm for the year ending 31st March, 2024 ₹ 1,80,000 was distributed in their capital proportion. After words,
it comes to notice that the following terms of the deed being ignored:
(a) Interest on capital allowed @ 10% p.a. and Salary allowed to Ranjita of ₹ 30,000 p.a.
(b) In the year 2023-24, drawings made by partners and interest to be charged as: ₹ 4,000; ₹ 3,000 and ₹ 3,000
respectively.
(c) Profits & Losses to be shared in 5:3:2 ratio.
You are required to pass necessary Journal entry for the adjustments of above ignored terms.
Adjusted Journal entry
Manoj’s Current A/c Dr. 7,000
Himanshee’s Current A/c Dr. 13,200
To Ranjita’s Current A/c 20,200
(Being adjusted made)
Particulars Manoj Himanshee Ranjita Total
(I) To be given:
(a) Interest on capital 24,000 18,000 12,000 54,000
(b) Salary to Ranjita 30,000 30,000
(c) Interest on drawings (4,000) (3,000) (3,000) (10,000)
(c) Share of profits in 5:3:2 53,000 31,800 21,200 1,06,000
73,000 46,800 60,200 1,80,000
(II) Already Given: Profits in 4:3:2 80,000 60,000 40,000 1,80,000
Adjustment to be made: 7,000 (Dr.) 13,200(Dr.) 20,200 (Cr.)
(12) Dipika, Poorva and Suman were partners in a firm sharing profits & losses in 3:2:1 ratio. They agreed to share profits &
losses from 1st April, 2024 in 2:2:1. Goodwill of the firm valued at ₹ 90,000.
Pass necessary journal entry from the above information and show your workings clearly.
Poorva’s Capital A/c Dr. 6,000
Suman’s Capital A/c Dr. 3,000
To Dipika’s Capital A/c 9,000
Dipika’s sacrificing share = 3/6th – 2/5th = (15-12)/30 = 3/30 = 1/10th share
Poorva’s gaining share = 2/5th – 2/6th = (12-10)/30 = 2/30th share
Suman’s gaining share = 1/5th – 1/6th = (6-5)/30 = 1/30th share. Gaining ratio 2:1
(13) Om, Jagdish and Hari were partners in a firm. Hari retires from the firm on 30th September, 2024 due to old age. The
balance of his capital as on 1st April, 2024, ₹ 3,00,000. As per partnership deed, partners are allowed interest on capital @
10% p.a. There was a balance in General reserve of ₹ 60,000 and loss on revaluation of assets & reassessment of liabilities
for ₹ 12,000.
Goodwill valued on the retirement of Hari at ₹ 1,20,000.
₹ 71,000 immediately paid to Hari and balance in two equal annual installments together with 10% p.a. interest. You are
required to prepare – Hari’s Capital Account on his retirement. (1/2x8=4)
 Hari’s Capital A/c
Revaluation A/c 4,000 Balance b/d 3,00,000
Bank A/c 71,000 Interest on capital 15,000
Hari’s Loan A/c 3,00,000 General Reserve 20,000
Om’s Capital A/c 20,000
Jagdish’s Capital A/c 20,000
3,75,000 3,75,000
(14) A, B and C were partners in a firm sharing profits & losses in 5:3:2 ratio. firm dissolved on 15th July, 2024 on the basis of
following terms:
1. Realization expenses incurred ₹ 9,000 paid by firm which was borne by partner A for ₹ 12,000.
2. A creditor of ₹ 10,000 took over 1/5th of stock at ₹ 8,000; half of balance stock took over by partner A at ₹ 20,000.
3. B’s Mrs. Loan to be settled by partner C.
4. Plant & Machinery, Furniture, Debtors and remaining stock were realized at ₹ 2,75,000.
5. There is a claim for workmen’s compensation of ₹ 9,000. Remaining creditors paid at 10% less.
On that date, their balance sheet was as under:
Liabilities Amt. in ₹ Assets Amt. in ₹
Capital A/cs: 2,90,000 Cash & Bank 30,000
A 1,40,000 C’s Current A/c 4,000
B 90,000 Plant & Machinery 1,90,000
C 60,000 Furniture 50,000
B’s Mrs. Loan A/c 20,000 Patent 6,000
Bank Overdraft 15,000 Stock 60,000
Creditors 30,000 Debtors 30,000
Provision for doubtful debts 4,000
Workmen’s Compensation Reserve 6,000
C’s Loan A/c 5,000
3,70,000 3,70,000
Prepare: Realization Account
Plant & Machinery 1,90,000 B’s Mrs. Loan A/c 20,000
Furniture 50,000 Bank Overdraft 15,000
Patent 6,000 Creditors 30,000
Stock 60,000 Provision for doubtful debts 4,000
Debtors 30,000 Workmen’s compensation reserve 6,000
A’s Capital A/c 12,000 A’s Capital A/c (Stock) 20,000
C’s Capital A/c 20,000 Bank A/c (S. Assets) 2,75,000
Bank A/c: 43,800 Capital A/cs: (loss on realization) 41,800
Creditors 19,800 A 20,900
Bank Overdraft 15,000 B 12,540
Workmen’s Compensation 9,000 C 8,360
4,11,800 4,11,800
OR
X, Y and Z were partners in a firm sharing profits and losses in 2:2:1 ratio. On 31 st March, 2024, firm was dissolved. On
that date the balance of assets and liabilities were as under: Plant & Machinery
₹ 2,30,000; Building ₹ 2,40,000; Furniture ₹ 90,000; Patents ₹ 15,000; Debtors ₹ 60,000; Stock
₹ 45,000. Capitals of X ₹ 1,20,000; Y ₹ 1,80,000; Z ₹ 90,000; X’s Loan A/c ₹ 45,000; Y’s Brother’s Loan A/c 55,000;
Bank Loan ₹ 1,20,000; Creditors ₹ 60,000;
Z’s Current A/c ₹ 30,000; Provision for Doubtful Debts ₹ 10,000.
Following information available for realization of assets and settlement of liabilities:
(1) Workmen’s compensation is to be settled for ₹ 25,000.
(2) 1/3rd of stock took over by a creditor of ₹ 15,000 at ₹ 10,000 and balance of stock realized at 10% less.
(3) 2/3rd of furniture took over by X at ₹ 50,000 & remaining sold at 10% less.
(4) Out of the total debtors, ₹ 12,000 declared as bad debts.
(5) ₹ 6,00,000 realized from plant & machinery and building at 2% commission through a broker.
(6) X’s loan to be settled by partner Y.
(7) Realization expenses of ₹ 30,000 paid by partner Z.
You are required to pass necessary Journal entries in the books of dissolved firm by assuming that sundry assets and
liabilities was already transferred to realization A/c. Journal entries
Date Particulars Dr. Cr.
(1) Z’s Current A/c Dr. 30,000
To Z’s Capital A/c 30,000
(Being credit balance transferred)
(2) Bank A/c Dr. 6,75,000
To Realization A/c 6,72,000
(Being assets realized)
 (3) X’s Capital A/c Dr. 50,000
To Realization A/c 50,000
(Being furniture took over by partner)
(4) Realization A/c Dr. 2,20,000
To Bank A/c 2,20,000
(Being liabilities paid)
(5) Realization A/c Dr. 30,000
To Z’s Capital A/c 30,000
(Being expense on dissolution paid by partner)
(6) X’s Loan A/c Dr. 45,000
To Y’s Capital A/c 45,000
(Being partner’s loan to be paid by another partner)
(15) Anuj, Vikram and Dipali were partners in a firm sharing profits & losses in 1/3rd, ½ and 1/6th respectively. On 30th June,
2024, Dipali died. On that date, the balance in Dipali’s capital ₹ 2,40,000. The partnership deed is stated the following
terms to be applied on the death of a partner:
(a) Executor of deceased partner allowed interest on capital @ 10% p.a. from beginning of year to date of death. 2,40,000
x 10/100 x 3/12 = 6,000
(b) Share of profits to be allowed from beginning of year to date of death to be calculated on the basis of previous year
profits which was ₹ 90,000. 90,000 x 3/12 x 1/6 = 3,750
(c) Share of valued goodwill. Goodwill of the firm valued at ₹ 60,000 on the death of Dipali. 10,000 2:3
(d) Share in Gain or loss on revaluation. There is loss on revaluation for ₹ 6,000. 1,000
(e) ₹ 60,750 will be paid immediately to the executor of deceased partner and balance in two equal annual installments
together with interest @! 10% p.a. 2,60,750
Pass necessary Journal entries on the death of Dipali, in the books of firm.
Journal entries
Date Particulars Dr. Cr.
(1) Interest on capital A/c Dr. 6,000
To Dipali’s Capital A/c 6,000
(Bing interest allowed for 3 months)
(2) Profit & Loss Suspense A/c Dr. 3,750
To Dipali’s Capital A/c 3,750
(Being profits allowed for 3 months)
(3) Anuj’s Capital A/c Dr. 4,000
Vikram’s Capital A/c Dr. 6,000
To Dipali’s Capital A/c 10,000
(Bing valued goodwill adjusted)
(4) Anuj’s Capital A/c Dr. 2,000
Vikram’s Capital A/c Dr. 3,000
Dipali’s Capital A/c Dr. 1,000
To Revaluation A/c 6,000
(Being loss on revaluation transferred)
(5) Dipali’s Capital A/c Dr. 2,60,750
To Dipali’s Executor A/c 2,60,750
(Bing balance transferred)
Dipali’s Executor A/c Dr. 60,750
(6) To Bank A/c 60,750
(Being immediate payment made)
OR
Nikhil, Varun and Sakshi were partners in a firm. On 31st July, 2024, Nikhil retires. Partnership Deed stated that in the case
of retirement of a partner, retires partner will be entitled for the following:
(a) Balance of capital at the beginning of accounting year including interest thereof @ 10% p.a.
(b) Share in valued goodwill. Goodwill of the firm valued at ₹ 1,80,000.
(c) Share in accumulated profits/losses.
(d) Share in gain/loss on revaluation of assets and reassessment of liabilities.
(e) Remuneration (salary etc.) if any, for the intervening period.
Balance Sheet of the firm as on 31st March, 2024 as under:
Liabilities Amt. in ₹ Assets Amt. in ₹
Capital A/cs: 4,10,000 Machinery 1,80,000
Nikhil 1,20,000 Furniture 45,000
Varun 1,40,000 Investments 1,00,000
Sakshi 1,50,000 Stock 65,000
Bank overdraft 12,000 Debtors 55,000
Creditors 33,000 Cash and Bank 20,000
Investment Fluctuation Reserve 10,000
4,65,000 4,65,000
 Additional information:
(a) Claim for workmen’s compensation to be paid for ₹ 6,000.
(b) Salary allowed to Nikhil @ ₹ 6,000 per month.
(c) Machinery to be depreciated by ₹ 15,000 and Investments valued at ₹ 96,000.
(d) 1/3rd of furniture took over by a creditor of ₹ 13,000 in full settlement of their account and remaining valued at ₹
27,000.
(e) There is a bad debt of ₹ 5,000 and Stock was overvalued by ₹ 5,000.
You are required to prepare: Revaluation A/c and Nikhil’s Capital A/c
Revaluation Account
Particulars Amt. in ₹ Particulars Amt. in ₹
Claim for WC 6,000 Capital A/cs: 36,000
Machinery 15,000 Nikhil 12,000
Furniture (2,000 + 3,000) 5,000 Varun 12,000
Bad Debt 5,000 Sakshi 12,000
Stock 5,000
36,000 36,000
Nikhils’ Capital Account
Particulars Amt. in ₹ Particulars Amt. in ₹
Revaluation A/c 12,000 Balance b/d 1,20,000
Nikhil’s Loan A/c 1,98,000 Interest on capital 4,000
IFF (10,000-4,000)/3 2,000
Salary (4 months) 24,000
Varun’s Capital A/c 30,000
Sakshi’s Capital A/c 30,000
2,10,000 2,10,000
(16) Give the answer for the following questions:
(01) X and Y were partners in a firm sharing profits & losses in 3:2 ratio. Z admitted for 1/3rd share and brought in share of
capital ₹ 5,00,000. There is balance in Capital of X and Y ₹ 5,00,000; and ₹ 3,00,000 respectively (after adjustments
for accumulated profits/losses, valued goodwill and gain/loss on revaluation). X and Y capital be adjusted as per Z’s
share of capital & new profit-sharing ratio. Excess or deficit to be adjusted by cash.
Pass necessary Journal entries and show your workings clearly.
Sol.: Total capital of the new firm = 5,00,000 x 3 = 15,00,000. X and Y’s new capital = 10,00,000.
X’s new capital = 6,00,000 and Y’s new capital = 4,00,000.
X has deficit capital for ₹ 1,00,000 and Y has deficit capital for ₹ 1,00,000.
(1) Cash A/c Dr. 5,00,000; To Z’s Capital A/c 5,00,000
(2) Cash A/c Dr. 2,00,000; To X’s Capital A/c 1,00,000 &
To Y’s Capital A/c 1,00,000
(02) X, Y and Z were partners in a firm sharing profits & losses in 3:2:1 ratio. Z retires from the firm. Their balance of
capital on retirement of Z: 2,80,000; 1,70,000 & 60,000 respectively (after adjustments for accumulated profits/losses,
valued goodwill and gain/loss on revaluation).
X and Y agree to share future profits in 2:1 ratio.
X and Y brought in necessary cash to pay off Z by use of available cash of firm ₹ 30,000 in such a way that their
capital become into their new profit-sharing ratio.
Pass necessary Journal entries and show your working clearly.
Sol.: Total capital of the new firm = 2,80,000 + 1,70,000 + (60,000 – 30,000) = 4,80,000.
X’s new capital = 2/3rd of 4,80,000 = 3,20,000. X has deficit capital for ₹ 40,000.
Y’s new capital = 1/3rd of 4,80,000 = 1,60,000. Y has excess capital for ₹ 10,000.
(1) Cash A/c Dr. 40,000; To X’s Capital A/c 40,000
(2) Y’s Capital A/c Dr. 10,000; To Cash A/c 10,000
(3) Z’s Capital A/c Dr. 60,000; To Cash A/c 60,000
(03) P and Q are partners in a firm sharing profits & losses in 3:2 ratio. R admitted as a new partner. New profit-sharing
ratio between P, Q and R is 5:3:2. On the admission of R, following balances appeared in the books of the firm:
Investments ₹ 1,00,000 and Investment Fluctuation Reserve ₹ 15,000.
Workmen’s Compensation Reserve ₹ 15,000.
Investment valued at ₹ 82,000 and there is a claim for workmen’s compensation of ₹ 12,000.
Pass necessary Journal entries and show into the balance sheet of reconstituted firm.
Sol.:
(1) Investment Fluctuation Reserve A/c Dr. 15,000
Revaluation A/c Dr. 3,000
To Investments A/c 18,000
(2) Workmen’s Compensation Reserve A/c Dr. 15,000
To Claim for workmen’s Compensation A/c 12,000
To P’s Capital A/c 1,800
To Q’s Capital A/c 1,200
 (3) P’s Capital A/c Dr. 1,800
Q’s Capital A/c Dr. 1,200
To Revaluation A/c 3,000
Balance Sheet
Liabilities Amt. in ₹ Assets Amt. in ₹
Claim for workmen’s compensation 12,000 Investments 82,000
OR
Ekta and Suman were partners in a firm sharing profits & losses in 2:3 ratio. Their Balance Sheet as on 31 st March,
2024 as under:
Liabilities Amt. in ₹ Assets Amt. in ₹
Capital A/cs: 5,00,000 Land & Building 1,80,000
Ekta 1,80,000 Plant & Machinery 2,10,000
Suman 3,20,000 Furniture 60,000
Outstanding Expense 20,000 Stock 45,000
Creditors 45,000 Debtors 75,000 60,000
Workmen’s Compensation Reserve 10,000 Less: Provision for d/d (15,000)
General Reserve 15,000 Cash and Bank 35,000
5,90,000 5,90,000
On the above date, Prathana admitted into partnership for 1/4th share under the following terms:
(a) She brought in cash ₹ 3,00,000 for share of capital and necessary cash for premium of goodwill. Goodwill of the firm
valued at ₹ 1,20,000.
(b) There is a bad debt of ₹ 10,000 and no any doubtful debts on debtors.
(c) Land & Building appreciated to ₹ 2,10,000 and Machinery to be depreciated by ₹ 30,000.
(d) Stock was found undervalued by ₹ 5,000 and claim for workmen’s compensation for ₹ 18,000.
(e) 1/4th of Furniture took over by partner Suman at ₹ 10,000 and remaining valued at ₹ 40,000.
(f) Ekta and Suman’s capital to be adjusted as per the new profit-sharing ratio and share of capital of Prathana. Excess or
deficit capital to be adjusted by opening of current account.
You are required to prepare: Revaluation A/c and Capital Account
Revaluation Account
Particulars Amt. in ₹ Particulars Amt. in ₹
Claim for WC 8,000 Provision for D/D 15,000
Bad Debts 10,000 Land & Building 30,000
Machinery 30,000 Stock 5,000
Furniture (5,000 + 5,000) 10,000 Capital A/cs: (2:3) 8,000
2,000 Ekta 3,200
Suman 4,800
60,000 50,000
Capital Account
Particulars Ekta Suman Prathana Particulars Ekta Suman Prathana
Furniture 10,000 Balance b/d 1,80,000 3,20,000
Revaluation A/c 3,200 4,800 General Reserve 6,000 9,000
Balance c/d 3,60,000 5,40,000 3,00,000 Cash A/c 3,00,000
Premium of goodwill 12,000 18,000
Current Account 1,65,200 2,07,800
3,63,200 5,50,000 3,00,000 3,63,200 5,54,800 3,00,000
Ekta Suman
Existing Capital 1,94,800 3,32,200
New Capital 3,60,000 5,40,000
Deficiency 1,65,200 2,07,800
Total Capital 12,00,000 – Prathana’s capital 3,00,000 = 9,00,000 Ekta and Suman’s new capital in 2:3 ratio.
(Q. 17 to 26 carry one mark, 27 to 32 carries three marks and 33 & 34 carries six marks.)
(17) P, Q and R were partners in a firm sharing profits & losses in 2:2:1 ratio. P retires from the firm. On retirement of P,
goodwill valued at ₹ 30,000.
Which of the following accounting treatment is not correct?
(A) Q’s capital debited by ₹ 8,000 (B) R’s capital debited by ₹ 4,000
(C) P’s capital credited by ₹ 12,000 (D) None of these
(18) A Partner X withdrew ₹ 1,500 at the end of every month for 9 months. = (8+0)/2 = 4 months
What will be the periods for which interest on drawings to be charged?
(19) Ajay, Bahadur and Chaitanya were partners in a firm. Bahadur retires from the firm. On the retirement of Bahadur, their
balance of capitals was ₹ 3,00,000; ₹ 2,00,000 and ₹ 1,00,000 respectively. Ajay and Chaitanya decide to share future
profits & losses in 3:2 ratio. They also agree to adjust their capital into new profit-sharing ratio. Excess or deficit capital to
be adjusted by cash.
Which of the following journal entry is correct for the adjustment of capitals of Ajay and Chaitanya?
 (A) Cash A/c DR. 60,000 (B) Ajay’s Capital A/c DR. 60,000
To Chaitanya’s Capital A/c 60,000 To Cash A/c 60,000
(C) Both of these (D) None of these
(20) Naveen and Kamlesh are partners in a firm. The balance of their fixed capitals is ₹ 6,00,000 and
₹ 4,00,000 respectively. They were allowed interest on capital @ 6% p.a. instead of 5% p.a.
Pass necessary Journal entry for the adjustment on interest on capital. N’s Current Dr. 1,000 to Kamlesh 1,000
(21) A, B, C and D were partners in a firm sharing profits & losses in 4:3:2:1 ratio. Partner C and D retires from the firm.
Gaining ratio between A and B will be ______. (fill the blank) 4:3
(22) State the difference between dissolution of partnership & dissolution of a firm.
(23) Net profits of ₹ 1,20,000 of a firm for the year ending 31st March, 2024. Afterword, it comes to know that Interest on
partner’s loan was omitted to consider. Now, under which of the following account will be used to incorporate the same?
(A) Profit & Loss Account (B) Profit & Loss Adjustment Account
(C) Profit & Loss Appropriation Account (D) Any of the above
(24) Hitesh and Krishna are partners in a firm sharing profits & losses in the ratio of 2:1. They agree to admit Chiranjiv for 1/4th
share. On the admission of Chiranjiv, there is balance of Investments of the firm ₹ 1,20,000 and balance in Investment
Fluctuation Reserve ₹ 12,000. Investments of the firm valued at ₹1,08,000. Which of the following accounting treatment is
correct?
(A) Investment Fluctuation Reserve debited ₹ 12,000 (B) Capital A/c credited with 12,000 in 2:1
(C) Revaluation A/c debited with ₹ 12,000 (D) Investment A/c credited with ₹ 1,08,000
(25) Shreya, Suman and Sakshi are partners in a firm. Sakshi has guaranteed from Shreya and Suman that her profits will not
be less than ₹ 30,000 in any year. The proportion in which Shreya and Suman given guarantee of profit to Sakshi is _______.
(fill the blank) 1:1 OR Equal OR Profit-sharing proportion
(26) On dissolution of a firm, provision for doubtful debts will be transferred to which account? Realization A/c
(27) Prerna, Pragya and Pranjal are partners in a firm sharing profits & losses in the ratio of 5:3:2. The balance of their fixed
capital as on 1st April, 2024, ₹ 4,50,000; ₹ 3,00,000 and ₹ 1,50,000 respectively. They are allowed interest on capital @
10% p.a. Salary allowed to Pranjal ₹ 3,000 per month. Drawings made by partners during year 2023-24 ₹ 18,000; ₹ 12,000
and ₹ 6,000 respectively. Interest on drawings to be charged as ₹ 1,500; ₹ 1,000 and ₹ 500 respectively. Profits for the year
ending 31st March, 2024 was ₹ 1,83,000. You are required to prepare Current Account of partners.
Current Account
Particulars Prerna Pragya Pranjal Particulars Prerna Pragya Pranjal
Drawings 18,000 12,000 6,000 Interest on Capital 45,000 30,000 15,000
Interest on Drawings 1,500 1,000 500 Salary 36,000
Balance c/d 1,05,500 65,000 76,500 Profit & Loss App. 80,000 48,000 32,000
1,25,000 78,000 83,000 1,25,000 78,000 83,000
1,83,000 + 3,000 – (90,000 + 36,000) = 1,86,000 – 1,26,000 = 1,60,000 (80,000+48,000+32,000)
(28) Goodwill of the firm valued at ₹ 60,000 by 1 ½ years purchase of super profits. Normal rate of return is 15%. Capital
employed for the firm ₹ 3,00,000. Find out average profits of the firm.
G/w=(AP-NP)x1.5. 60,000=(AP–45,000)x1.5. 1.5AP=60,000+67,500. AP=1,27,500/1.5= 85,000.
(29) Anubhav retires from a firm at the last date of accounting i.e. 31.03.2024. On his retirement there is balance in his capital
account (after all adjustments taken place as per the terms of deed) ₹ 1,80,000.
₹ 30,000 immediately paid to him and balance will be paid in two equal yearly installments together with 10% p.a. interest.
Preparation of Anubhav’s Loan Account till the payment of last instalment.
Anubhav’s Loan Account
31.04.24 Balance c/d 1,50,000 31.03.24 Anubhav’s Capital A/c 1,50,000

31.03.25 Bank A/c 90,000 01.04.24 Balance b/d 1,50,000

31.03.25 Balance c/d 75,000 31.03.25 Interest on Loan 15,000
1,65,000 1,65,000
31.03.26 Bank A/c 82,500 01.04.25 Balance b/d 75,000
31.03.26 Interest on Loan 7,500
82,500 82,500
(30) Ganga, Jamuna and Sarasvati were partners in a firm. Sarasvati retires from the firm. State six possible transactions for
which accounting treatment will take place on the retirement of Sarasvati.
(31) Pass necessary Journal entries from the following of a dissolved firm regarding realization expense:
(a) Realization expense of ₹ 6,000 borne by a partner Babita. Real. Dr. 6,000; To Babita’s Cap. 6,000
(b) Realization expense of ₹ 9,000 paid by a partner Sourabh. Real. Dr. 9,000; To Sourabh’s Cap. 9,000
(c) Actual realization expense ₹ 12,000 paid by firm which was borne by partner Anand for ₹ 9,000.
Anand’s Capital Dr. 12,000; To Bank 12,000
(32) Nadeem, Parvez and Iqbal were partners in a firm sharing profits & losses in 2:1:2 ratio. On 1st April, 2024, they agree to
share future profits & losses in different proportion. Nadeem surrender 1/10 th of his share and Iqbal surrender 2/20th of his
share in favour to Parvez.
(a) What is the sacrificing ratio between Nadeem and Iqbal. 1:1
(b) Find out the new profit-sharing ratio between Nadeem, Parvez and Iqbal.
N’s New Share = 2/5th – (1/10th of 2/5th) = 2/5 – 2/50 = (100-10)/250 = 9/25.
 P’s New Share = 1/5th + (1/10th of 2/5th) + (2/20th of 2/5th) = 1/5 + 2/50 + 2/50 = 1/5 + 4/50 = 7/25
I’s New Share = 2/5th – (1/10th of 2/5th) = 2/5 – 2/50 = (100-10)/250 = 9/25.
New Profit-sharing ratio between Nadeem, Parvez and Iqbal is 9:7:9.
(33) Rekha, Shalini and Anjali were partners in a firm. as on 31 st August, 2024, their firm was dissolved. They provide the
balance of assets and liabilities of the dissolved firm as under:
Cash and Bank balance ₹ 45,000. Sundry Creditors ₹ 60,000. Bank Loan ₹ 1,10,000. Balance of Capital of partners: ₹
3,20,000; ₹ 2,40,000 and ₹ 1,80,000 respectively.
Additional information:
(a) Sundry assets realized ₹ 9,00,000 through broker @ 2% commission.
(b) A creditor of ₹ 10,000 took over an unrecorded furniture (estimate value ₹ 12,000) at ₹ 9,000.
(c) An outstanding bill for repairs of ₹ 15,000. Partner Rekha agree to settle the same privately.
(d) Realization expenses ₹ 6,000 paid by partner Shalini.
Preparation of Realization Account in the books of dissolved firm from the above information.
Realization Account
Particulars Amt. in ₹ Particulars Amt. in ₹
S. Assets 8,65,000 S. Creditors 60,000
Bank A/c: 1,61,000 Bank Loan 1,10,000
Creditors 51,000 Bank A/c 8,82,000
Bank Loan 1,10,000
Shalini’s Capital A/c 6,000
Capital A/cs: 20,000
Rekha’s Capital 6,666
Shalini’s Capital 6,666
Anjali’s Capital 6,667
10,52,000 10,52,000
S. Assets = Total Liabilities – Cash & Bank.
S. Assets = (60,000 + 1,10,000 + 3,20,000 + 2,40,000 +1,80,000) – 45,000 = 8,65,000.
(34) Following is the balance sheet of a firm as on 31st March, 2024:
Liabilities Amt. in ₹ Assets Amt. in ₹
Bank Loan 1,50,000 Land & Building 2,10,000
Capital A/cs: 3,00,000 Plant & Machinery 1,50,000
Asha 1,80,000 Furniture 50,000
Nirmala 1,20,000 Stock 30,000
Creditors 40,000 Debtors 35,000
General Reserve 30,000 Cash & Bank 45,000
5,20,000 5,20,000
On the above date, they admit to Jayanti for 1/3rd share on the basis of following terms:
(a) Jayanti brought in share of capital ₹ 3,00,000 and premium of goodwill ₹ 20,000.
(b) Land & Building appreciated to ₹ 2,25,000 and Plant & Machinery depreciated by ₹ 10,000.
(c) There are bad debts on debtors of ₹ 5,000.
Preparation: Revaluation A/c; Capital A/c; Balance Sheet after reconstitution.
Revaluation Account
Particulars Amt. in ₹ Particulars Amt. in ₹
Plant & Machinery 10,000 Land & Building 15,000
Bad Debts 5,000
15,000 15,000
Capital Account
Particulars Asha Nirmala Jayanti Particulars Asha Nirmala Jayanti
Balance c/d 2,05,000 1,45,000 3,00,000 Balance b/d 1,80,000 1,20,000
General Reserve 15,000 15,000
Bank A/c 3,00,000
Premium of g/w 10,000 10,000
2,05,000 1,45,000 3,00,000 2,05,000 1,45,000 3,00,000
Balance Sheet of reconstituted firm
Liabilities Amt. in ₹ Assets Amt. in ₹
Bank Loan 1,50,000 Land & Building 2,25,000
Creditors 40,000 Plant & Machinery 1,40,000
Capital A/cs: 6,50,000 Furniture 50,000
Asha 2,05,000 Stock 30,000
Nirmala 1,45,000 Debtors 30,000
Anjali 3,00,000 Cash & Bank 45,000 3,65,000
(3,00,000 + 20,000) 3,20,000
8,40,000 8,40,000