Test Paper – 4
(2017-18)
Date : ___________
Class
Duration : 1 hr 10 m Accountancy XII
Max. Marks : 35
Instructions:
4 All questions are compulsory.
4 Question No. 1 to 4 carry 1 mark.
4 Question No. 5 carries 3 marks.
4 Question No. 6 and 7 carry 4 marks.
4 Question No. 8 and 9 carry 6 marks.
4 Question No. 10 carries 8 marks.
4 Use of calculator is strictly prohibited.
1. State any two effects of retirement of a partner. [1]
2. From the following Balance Sheet of a firm of A and B. Calculate interest on capital payable to
A for the year ended 31.07.2017.
Liabilities Amount Assets Amount
A’s Capital 25,000
B’s Capital 10,000 Sundry Assets 40,000
Profit & Loss A/c (2016-17) 25,000 A’s Drawings 20,000
60,000 60,000
During year A’s drawings were `30,000 and Net profit was `40,000. Interest on Capital to be
charged @ 10% per annum. [1]
3. X and Y were partner sharing, profits in ratio 3 : 2. Z was admitted for 1/4 share of profit. On
date of admission workman compensation reserve was appearing in books at `30,000 and
liability against workmen compensation reserve was `50,000. Pass the Journal entry. [1]
4. A, B and C were partner sharing profits equally. They admitted D for 1/4 share of profit. D had
to bring `50,000 for Goodwill and `1,50,000 for capital. D paid goodwill privately to A, B and C.
Journalise. [1]
5. Astha and Bhawna were partner in a firm. Sharing, profits and losses equally. They admitted
Charu as new partner. New PSR will be 4 : 2 : 1.
Goodwill of the firm was `70,000. Charu brought her share of goodwill and `1,30,000 for
capital. Journalise. [3]
6. A, B and C are in partnership with capital of 4,50,000 (Cr.), 3,00,000 (Cr.) and 1,00,000 (Dr.)
on 31.03.2017. As per their deed
(a) C is entitled for a salary of `1,60,000 annually.
(b) Interest on Capital @ 10% p.a. and Interest on Drawing @ 12% p.a.
(c) 10% of Net Profit to be transferrer to Reserve.
(d) C will get commission of 10% of Net Profit before charging any appropriation.
During the year A withdrew `5,000 at end of each quarter and B `2,000 at beginning of each
month. On 01.12.2016, C advanced loan of `50,000 to the firm. Net Profit before providing all
above adjustment was `4,50,000. Prepare P & L appropriation A/c. [4]
[1]
Test Paper
7. Sunil, Amit and Jatin are partners sharing profits in the ratio of 3 : 2 : 1 respectively. From 1st
April, 2016, they decide to share profits in the ratio of 2 : 3 : 1. For this purpose the goodwill
of the firm is to be valued at 3 years’ purchase of average profit of last 5 years. The profits and
losses of the preceding five years are: [4]
Year 2011-12 2012-13 2013-14 2014-15 1015-16
Profit/Loss (`) X 6,00,000 (Profit) 6,80,000 (Profit) 7,60,000 (Profit) 2,80,000 (Loss)
Journal Entry on Change in Profit-Sharing Ratio
Date Particulars LF Dr. (`) Cr. (`)
2016
April 1 Amit’s Capital A/c Dr. 2,00,000
To Sunil’s Capital A/c 2,00,000
(Being the adjustment for goodwill made on change in
profit-sharing ratio)
Calculate the value of X.
8. Chetan and Shubham were partners in the ratio 2:1. They admitted Kapil for 1/5th share in the
total profits of the firm for which he brought in `50,000 as capital, but could only bring 40%
of his share of premium in cash. On that date following was appearing in the balance sheet:
Capital of Chetan `80,000 and Shubham `40,000; Reserves & Surplus `60,000; Advertisement
(deferred revenue expenditure) `10,000; Normal rate of return @20%. Average profit of the firm
was `60,000. Calculate goodwill by capitalisation of average profit and Kapil’s share. [6]
Calculate goodwill by capitalisation of average profit and pass the necessary journal entries on
the admission of Kapil.
9. Rachit, Raju and Jyotika were partner sharing profits in ratio 2 : 3 : 1. [6]
Balance Sheet (as at 31.03.2016)
Liabilities Amount Assets Amount
Capital Cash 14,000
Rachit 1,50,000 Bank 1,56,000
Raju 2,00,000 Stock 70,000
Jyotika 2,50,000 6,00,000 Debtor 2,50,000
Workmen Compensation Reserve 50,000 Land 2,60,000
Creditor 70,000
Provision for doubtful debt 30,000
7,50,000 7,50,000
w.e.f. 1st April, 2016 partners decided share to equally with the following agreement:
(a) Goodwill is to be values at two years purchase of average profit of last 3 year.
2015 – 2016 : 70,000 (Loss)
2014 – 2015 : 1,30,000
2013 – 2014 : 90,000
(b) Land was undervalued by `2,41,000 and Stock was overvalued by `20,000.
(c) Provision for doubtful debt is to be made at 10%.
(d) Claim against workmen compensation was `70,000.
Prepare Partner capital account and balance sheet without opening the revaluation account.
10. Anshul, Yash & Anurag were partners in the ratio 1:2:3. On 31st March 2016, Yash died and
Anshul & Anurag decided to keep new ratio as 2:1. Their balance sheet as on 31st December,
2015 was as follows: [8]
[2]
Test Paper
Liabilities Amount Assets Amount
Capital Land & Building 70,000
Anshul 50,000 Plant & Machinery 90,000
Yash 70,000 Investment 80,000
Anurag 80,000 2,00,000 Debtors 50,000
Reserves 45,000 – Provision for Bad Debts 2,500 47,500
Investment Fluctuation Fund 15,000 Stock 20,500
Creditors 1,00,000 Goodwill 12,000
Cash 40,000
3,60,000 3,60,000
(a) Bad debt found at `5,000 and new provision for bad debts created at same rate.
(b) Land raised by `30,000
(c) Plant and machinery reduced by `6,000.
(d) Goodwill valued at `30,000.
(e) Investment found at `84,750.
(f) Yash’s share in current year’s profit was calculated on the basis of last three years average
profit. Last 3 years' profits were as follows:
2013- `40,000; 2014- `(10,000) Loss; 2015- `90,000.
Anshul and Anurag decided to pay to the executor of Yash `11,333 immediately and remaining
balance in 2 equal half yearly installments with interest @10% p.a on outstanding balance.
Prepare Revaluation A/c, Yash’s Capital A/c and his Executor’s Loan A/c upto final payment.
vvvvv
[3]
Test Paper
Hints/Solutions to Test Paper – 4
(2017-18)
Date : ___________
Class
Duration : 1 hr 10 m Accountancy XII
Max. Marks : 35
1. Change in Profit Sharing Ratio
Assets/Liability revalued
R
2. IOC Capital b/d
100
10
IOC of A 27, 500 2, 750
100
3. Journal Entries
Particulars Dr. (`) Cr. (`)
Workmen Compensation Fund A/c Dr. 30,000
Revaluation A/c Dr. 20,000
To Claim for Workmen Compensation Fund A/c 50,000
(Being excess of claim against workmen transferred to revaluation)
A’s Capital A/c Dr. 12,000
B’s Capital A/c Dr. 8,000
To Revaluation A/c 20,000
(Being loss of revaluation distributed)
4. Journal Entry
Particulars Dr. (`) Cr. (`)
Cash A/c Dr. 1,50,000
To Capital A/c 1,50,000
(Being capital introduced by new partner)
Note: No entry will be passed for the treatment of goodwill.
5. Aastha : Bhawna
1 : 1
New Ratio → A : B : C
4: 2:1
Goodwill of the firm = 70,000
1 4 1
Aastha
2 7 14
1 2 3
Bhawna
2 7 14
Particulars Dr. (`) Cr. (`)
Cash A/c Dr. 1,40,000
To C’s Capital A/c 1,30,000
To Premium of Goodwill A/c 10,000
(Being cash brought in by new partner for capital and premium for goodwill)
Premium of Goodwill A/c Dr. 10,000
A’s Capital A/c Dr. 5,000
To B’s Capital A/c 15,000
(Being premium brought in by C distributed in gaining/sacrificing ratio)
[4]
Test Paper
6. Dr. P & L Appropriation A/c Cr.
Particulars ` Particulars `
To Interest on Capital: Net Profit 4,50,000
A 45,000 (–) Interest on Loan (3,000) 4,47,000
B 30,000 75,000
To Salary: By Interest on Drawings
C 1,60,000 A 900
To Commission: B 1,560 2,460
C (4,47,000 × 10/100) 44,700
To Reserve (4,47,000 × 10/100)
To Divisible Profit:
A 41,686
B 41,687
C 41,687 1,25,060
4,49,460 4,49,460
Working note:
Calculation for IOD:
1 12
A 5, 000 4.5 4 900
12 100
1 12
B 2, 000 6.5 12 1, 560
12 100
Calculation for IOL:
6
50, 000 3, 000
100
7. Sunil : Amit : Jatin
3 : 2 : 1 (Old ratio)
2 : 3 : 1 (New ratio)
S = 1/6 (Sacrifice) × Goodwill
A = 1/6 (Gain) × Goodwill = 2,00,000
Goodwill = Number of purchase years × Average profit
17, 60, 000 x
12, 00, 000 3
5
20,00,000 = x + 17,60,000
x = 2,40,000 (Profit of 2011-12)
8. Journal Entries
Particulars Dr. (`) Cr. (`)
Cash A/c Dr. 76,000
To Kapil’s Capital A/c 50,000
To Premium for Goodwill A/c 10,400
(Being capital and premium brought in by partner)
Premium for Goodwill A/c Dr. 10,400
Kapil’s Current/Capital A/c Dr. 15,600
To Chetan’s Capital A/c 17,667
To Shubham’s Capital A/c 8,333
(Being share of premium distributed among partners in sacrificing ratio)
Working note:
Balance Sheet (given)
Liabilities Amount Assets Amount
Reserve 60,000
Capital
C 80,000
S 40,000 Advertisement Expenditure 10,000
[5]
Test Paper
Normal rate of return = 20%, Average profit = 60,000
Goodwill = Capitalised value Average Profit – Net Assets
Average profit 100
Net Assets
R
60, 000 100
1, 70, 000
20
⇒ 1,30,000
Kapil’s share of goodwill = 1,30,000 × 1/5 = 26,000
9. Statement of Revaluation
Particulars `
(+) ↑ In Land 2,41,000
(–) ↓ In Stock (20,000)
(+) ↓ In Provision Doubtful Debt 5,000
(–) Claim for Workmen Compensation Fund (20,000)
Gain on Revaluation 2,06,000
Particulars Rachit Raju Jyotika Particulars Rachit Raju Jyoti
To Raju A/c 51,000 By Balance b/d 1,50,000 2,00,000 2,50,000
By Jyotika 51,000
To Balance c/d 1,50,000 2,51,000 1,99,000
1,50,000 2,51,000 2,50,000 1,50,000 2,51,000 2,50,000
Balance Sheet
Liabilities ` Assets `
Provision for Doubtful Debt 30,000 Land 2,60,000
Claim for Workmen Compensation Fund 50,000 Stock 70,000
Creditors 70,000 Debtor 2,50,000
Capitals: Cash 14,000
Rachit 1,50,000 Bank 1,56,000
Raju 2,51,000
Jyoti 1,99,000 6,00,000
7,50,000 7,50,000
Working note:
2:3:1 Old ratio
1:1:1 New ratio
S.R. = O.R. – N.R.
2 1
0
6 3
3 1 1
Sacrifice 3, 06, 000 51, 000
6 3 6
1 1 1
Gain 3, 06, 000 51, 000
6 3 6
1, 50, 000
Goodwill 2
3
= 1,00,000
+ 2,06,000
3,06,000
[6]
Test Paper
10. Dr. Revaluation A/c Cr.
Particulars ` Particulars `
Debtors 4,750 Land 30,000
Plant 6,000 Investment 4,750
Gain
Anshul 4,000
Yash 8,000
Anurag 12,000 24,000
34,750 34,750
Dr. Yash’s Capital A/c Cr.
Particulars Amount Particulars Amount
To Goodwill A/c (Old) 4,000 By Balance b/d 70,000
By Anshul’s Capital A/c (Goodwill) 10,000
By Investment Fluctuation Reserve A/c 5,000
By Anshul’s Capital A/c (Profit) 3,333
To Executor’s A/c 1,11,333 By Revaluation A/c (Profit) 8,000
1,15,333 1,15,333
Yash’s Executor A/c
Date Particulars (`) Date Particulars (`)
2016 2016
Mar. 31 To Bank A/c 11,333 June 30 By Yash’s Capital 1,11,333
Sept. 30 To Bank A/c 55,000 Sept. 30 By Interest 5,000
(50,000 + 5,000) 10 6
1, 00, 000
100 12
Dec. 31 To Balance c/d 51,250 Dec. 31 By Interest 1,250
(50,000 + 1,250) 10 3
50, 000
100 12
1,17,583 1,17,583
2017 2017
Mar. 31 To Bank A/c 52,500 Jan 1 By Balance b/d 51,250
(50,000 + 1,250 + 1,250)
Mar. 31 By Interest
10 3 1,250
50, 000
100 12
52,500 52,500
Working note:
Anshul : Yash : Anurag Anshul : Anurag
1 : 2 : 3 2 : 1
2 1 3
Anshul 30, 000 15, 000
3 6 6
1 3 1
Anurag 30, 000 5, 000
3 6 6
2 2
Yash 0 30, 000 10, 000
6 6
[7]
