Commerce Academy

Kharghar sector 13

PARTNERSHIP 3 & 4 MARKERS

Class 12 - Accountancy
Time Allowed: 3 hours Maximum Marks: 100

1. Ravi and Rahul are partners in a firm. Ravi was to get a commission of 10% on the net profits before charging [3]
any commission. However, Rahul was to get a commission of 10% on the net profits after charging all
commissions. Fill in the missing figures in the following Profit and Loss Appropriation Account for the year

ended 31st March 2023:

y
PROFIT AND LOSS APPROPRIATION ACCOUNT

m
for the year ended 31st March, 2023

de
Dr. Cr.

Particulars ₹ Particulars ₹

To Ravi's Commission (₹ ____ × 10

100
)
a 44,000 By Profit & Loss A/c ____
Ac
To Rahul's Commission ____

To Profit transferred to:

Ravi's Capital A/c ____

e
erc

Rahul's Capital A/c ____ ____

____ ____

2. A and B are partners sharing profits and losses in the ratio of 3 : 1. Their capitals at the end of the financial year [3]
mm

2016-17 were ₹6,00,000 and ₹3,00,000. During the year 2016-2017, A’s drawings were ₹80,000 and the
drawings of B were ₹40,000, which had been duly debited to the partner’s capital accounts. Profit before
charging interest on capital for the year was ₹80,000. The same had also been credited in their profit sharing
ratio. B had brought additional capital of ₹70,000 on October 1, 2016. Calculate interest on capital @ 12% p.a.
Co

for the year 2016-17.

3. A and B were partners sharing profits in 2 : 1 ratio. During the year ended 31st March, 2023, A’s drawings were [3]
₹ 50,000 per month drawn in the beginning of every month and B's drawings were ₹ 25,000 per month drawn at
the end of every month. After the preparation of final accounts, it was discovered that interest on A’s drawings
@ 12% p.a. was not taken into consideration. Give the necessary adjusting entry on 1st April, 2022.
4. Sangeeta, Deepa, Ajay and Lalit were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 4 : 1. [3]
They decided to share profits and losses in the ratio of 5 : 1 : 2 : 2 with effect from 1st April, 2022. On this date,
the goodwill of the firm was valued at ₹ 5,20,000, General Reserve appeared in the books at ₹ 1,00,000.
Pass necessary journal entries for the above transactions. Show your workings clearly.
5. Meghna and Harshit shared profits and losses in the ratio of 3 : 2. With effect from 1st April, 2023, they decide [3]
to share profits equally. Goodwill of the firm was valued at ₹ 50,000. Pass necessary Journal entries for the
accounting of goodwill:

1/7
 a. When goodwill is adjusted through Partners' Capital Accounts;
b. When Goodwill is raised and written off.
6. Disha and Divya are partners in a firm sharing profits in the ratio of 3 : 2 respectively. The fixed capital of Disha [3]
is ₹4,80,000 and of Divya is ₹3,00,000. On 1st April, 2019 they admitted Hina as a new partner for 1

5
th share in
future profits. Hina brought ₹ 3,00,000 as her capital. Calculate value of goodwill of the firm and record
necessary Journal entries on Hina's admission.
7. X and Y are partners sharing profits in the ratio of 4 : 3. Z joins partnership for 2

7
th share in the profits (of which [3]
he acquires th from X and th from Y). Z brings in ₹ 3,00,000 for his capital and ₹ 1,20,000 for goodwill.
3 1

4 4

Half of the amount of goodwill is withdrawn by the old partners.

Pass necessary Journal entries and find out new profit sharing ratio.
8. Ashish and Bhanu are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Charu as a partner for [3]
th share of profits. At the time of admission of Charu, Sundry Debtors and Provision for Doubtful Debts
1

y
4

existed at ₹ 76,000 and ₹ 8,000 respectively. ₹ 6,000 of the debtors proved bad. A provision of 5% is to be

m
created on Sundry Debtors for doubtful debts. Pass the necessary Journal entries.
9. A, B and C are partners in a firm sharing profits in the ratio of 3 : 2 : 1 with Capitals of ₹ 70,000; ₹ 60,000 and ₹ [3]

de
40,000 respectively. D is admitted in the firm for 1

4
th share in profits, which he acquires 1

8
th from A and 1

8
th
from B. D brings in ₹ 60,000 as his capital and ₹ 32,000 for his share of goodwill in cash. 3

4
th of the amount of

a
goodwill was withdrawn by A and B. The Capitals of the partners in the new firm are to be adjusted in profit
Ac
sharing ratio on the basis of D’s capital and excess or deficit capital to be adjusted in cash.
Prepare necessary journal entries, Capital Accounts of the partner’s and Cash Account.

10. A, B and C are partners in a firm sharing profits in the ratio of 2 : 3 : 4. On 31st March 2023, A retires and B and [3]
C decided to share future profits in the ratio of 2 : 1. Following balances appeared in their books on this date:
e

₹
erc

Profit and Loss (Dr.) 72,000

Employee's Provident Fund 1,50,000

mm

Workmen Compensation Reserve 45,000

General Reserve 1,20,000

It is agreed that (i) workmen Compensation Reserve is no more required, and (ii) 25% of the General Reserve is
Co

to be transferred to Provision for Doubtful Debts. Pass Journal entries for the adjustment of these items on A's
retirement.
11. A, B and C are partners sharing profits in the ratio of 4

9
:
1

3
:
2

9
. B retires and A and C decide to share profits in [3]
the ratio of 1 : 2. It was decided to adjust B's share of goodwill in the accounts of continuing partners. Fill in the
missing figures in the following Journal Entry. Also find out the total goodwill of the firm.
JOURNAL

Date Particulars L.F. Dr. (₹) Cr. (₹)

C's Capital A/c Dr. ____

To A's Capital A/c ____

To B's Capital A/c

30,000
(C Compensates A and B for the loss in share of profits)

2/7
12. Vibha, Sudha and Ashish were partners in a firm sharing profits in the ratio 2 : 3 : 1. Sudha retired and the [3]
balance in her capital account after making necessary adjustments on account of reserves, revaluation of assets
and re-assessment of liabilities was ₹ 85,000. Vibha and Ashish agreed to pay Sudha ₹ 1,15,000 in full
settlement of her claim. Record the necessary journal entry for goodwill on Sudha's retirement.
13. The capital accounts of Ram and Rohit showed credit balances of ₹ 10,00,000 and ₹ 7,50,000 respectively after [4]
taking into account drawings and net profit of ₹ 5,00,000. The drawings of the partners during the year ended

31st March, 2024 were:

i. Ram withdrew ₹ 25,000 at the end of each quarter.
ii. Rohit's drawings were:

31st May 2023 ₹ 20,000

1st November, 2023 ₹ 17,500

y
1st February, 2024 ₹ 12,500

m
Calculate interest on partners' capitals @ 10% p.a. and interest on partners' drawings @ 6% p.a. for the year

de
ended 31st March, 2024.
14. P, Q and R are partners in a firm. Their Capital Accounts as on 1st April, 2022 were ₹ 3,00,000; ₹ 1,50,000 and ₹ [4]
1,50,000 respectively.

a
Ac
As per the provisions of the Deed:
i. R was to be allowed a remuneration of ₹ 36,000 per annum,
ii. Interest @ 5% p.a. was to be provided on capital and
iii. Profits were to be distributed in the ratio of 2 : 2 : 1. Ignoring the above terms, net profit of ₹ 1,80,000 for the
e

year ended 31st March, 2023 was distributed among the three partners equally.
erc

Pass the Journal entries to rectify the above errors.

15. The capital accounts of X and Y showed balances of ₹ 40,000 and ₹ 20,000 as on April 01, 2022. They shared [4]
mm

profits in the ratio of 3:2. They were allowed interest on capital @ 10% p.a. and interest on drawings @ 12%
p.a. X also advanced a loan of ₹ 10,000 to the firm on August 01, 2022.
During the year, X withdrew ₹ 1,000 per month at the beginning of every month whereas Y withdrew ₹ 1,000
per month at the end of every month.
Co

The Profit for the year ended 31st March, 2023, before the above-mentioned adjustments, was ₹ 20,960. Show
the distribution of profits and prepare the partner’s Capital Accounts.
16. Anita, Asha, and Amrit are partners sharing profits in the ratio of 3:2:1 respectively. From 1st January 2010, they [4]
decided to share profits in the ratio of 1:1:1. The partnership deed provided that in the event of any change in
profit sharing ratio, the goodwill should be valued at three years’ purchase of the average of five years’ profits.
The profits and losses of the preceding five years are

Year Profit (Rs)

2005 1,20,000

2006 3,00,000

2007 3,40,000

2008 3,80,000

3/7
 2009 1,40,000(Loss)

Showing the working clearly, give the necessary journal entry to record the above change.

17. Vijay, Ajay and Sanjay are partners sharing profits and losses in the ratio of 3 : 2 : 1. With effect from 1st April, [4]

2022 they agree to share profits equally. For this purpose, goodwill is to be valued at two year's purchase of the
average profit of last four years which were as follows:

Year ending on 31st March 2019 50,000 (Profit)

Year ending on 31st March 2020 1,20,000 (Profit)

Year ending on 31st March 2021 1,80,000 (Profit)

Year ending on 31st March 2022 70,000 (Loss)

y
em
On 1st April 2021 a Motor Bike costing ₹ 50,000 was purchased and debited to travelling expenses account, on
which depreciation is to be charged @ 20% p.a by Straight Line Method. The firm also paid an annual insurance
premium of ₹ 20,000 which had already been charged to Profit & Loss Account for all the years. Journalise the

ad
transaction along with the working notes.
18. Lalit, Rishabh and Sanjay sharing profits and losses in the ratio of 4 : 3 : 2, admitted Vikram as a partner for 1

5
th [4]

share in the firm w.e.f. 1st April, 2023. An extract of their Balance Sheet as at 31st March, 2023 is:
Ac
BALANCE SHEET
as at 31st March, 2023

Liabilities ₹ Assets ₹
e
erc

Workmen Compensation Reserve 1,35,000

Pass the Journal entries for Workmen Compensation Reserve on the admission of Vikram in following
alternative cases:
mm

Case 1. If there is no other information.

Case 2. If workmen compensation claim is ₹ 45,000
Case 3. If workmen compensation claim is ₹ 1,50,000
19. Radha and Anjali are partners in a firm sharing profits and losses in the ratio of 3 : 2. They admit Vinay as a [4]
Co

partner for 1

4
th share in the profits of the firm Vinay brings ₹ 6,00,000 as his capital and his share of goodwill in
cash. Goodwill of the firm is to be valued at two year's purchase of average profits of the last four years.
The profits of the firm during the last four years are given below:

Year Profit (₹)

2019 - 20 3,50,000

2020 - 21 4,75,000

2021 - 22 6,70,000

2022 - 23 7,45,000

The following additional information is given.

i. To cover management cost an annual charge or ₹ 56,250 should be made for the purpose of valuation of
goodwill.

4/7
 ii. The closing stock for the year ended 31st March 2023 was overvalued by ₹ 15,000 Pass necessary journal
entries on Vinay's admission showing the working notes clearly.
20. X and Y are in partnership sharing profits and losses in the ratio of 3 : 1. They admit Z for rd share of profit. [4]
1

Following Journal entries were passed:

JOURNAL

Date Particulars L.F. Dr.(₹) Cr.(₹)

Bank A/c Dr. , 18,000

To Premium for Goodwill A/c 18,000

(Amount brought in by Z towards share of goodwill)

Premium for Goodwill A/c Dr. 18,000

y
Z's Current A/c Dr. 12,000

m
To X's Capital A/c 30,000

de
(Share of goodwill of Z transferred to sacrificing partner)

Y's Capital A/c Dr. 7,500

a
Ac
To X's Capital A/c 7,500

(Adjustment made on account of change in profit-sharing ratio)

Calculate:
e

i. Firm's goodwill;
erc

ii. Sacrifice or gain of X and Y; and

iii. New Profit-sharing ratio
21. A, B and C are partners in a firm sharing profits the ratio of 3 : 2 : 1. D is admitted into the firm for 1
share in [4]
4
mm

profits, which he gets as 3

16
from A and 1

16
from B. The total capital of the firm is agreed upon as ₹ 1,20,000
and D are to bring in cash equivalent to 1

4
of this amount as his capital. The capital of other partners also had to
be adjusted in the ratio of their respective share in profits by bringing in or paying cash. The capitals of A, B,
and C after all adjustments are ₹ 40,000, ₹ 35,000 and ₹ 30,000 respectively. Calculate the new capitals of A, B,
Co

and C, and record the necessary journal entries.

22. X, Y and Z are partners in a business sharing profits as 3

4
, 1

8
and 1

8
respectively and their Balance Sheet as at [4]
31st March, 2023 was:

Liabilities ₹ Assets ₹

Capital Plant 5,00,000

X 5,00,000 Debtors 4,00,000

Y 3,00,000 Stock 2,00,000

Z 2,50,000 10,50,000 Cash 50,000

General Reserve 50,000 Bank 2,50,000

Z's Loan 50,000

5/7
 Creditors 2,50,000

14,00,000 14,00,000

Z died on 31st December, 2023 and the Partnership Deed provided the following:
1. The deceased partner will be entitled to his share of profits up to the date of death, calculated on the basis of
the previous year's profits.
2. He will be entitled to his share of goodwill of the firm, calculated on the basis of three years' purchase of the
average profits of the last four years. The net profits for the last four years ended 31st March, were: 2020 - ₹
8,00,000; 2021 - ₹ 6,00,000; 2012 - ₹ 4,00,000 and 2023 - ₹ 2,00,000.
3. His drawings up to the date of death was ₹ 18,000.
Determine the amount payable to the legal representatives of the deceased partner by preparing the necessary
accounts.

y
23. Sarthak, Kedar and Dheeraj are partners sharing profits in the ratio of 3 : 1 : 2. On 31st March, 2022, Kedar [4]

em
retired and his capital account after adjustments of reserve and profit on revaluation was ₹ 3,50,000. Sarthak and
Dheeraj paid him ₹ 4,20,000 in settlement of his claim. To settle his account, a computer of ₹ 4,20,000 was
given to Kedar.

ad
Pass the necessary Journal entries in the books of the firm.
24. Mohan, Girdhari and Shyam were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. On 31st [4]
Ac
March, 2022, Girdhari retired. After making all adjustments on account of reserves, revaluation of assets and
reassessment of liabilities, the balance in Girdhari's Capital Account stood at ₹ 5,00,000. Mohan and Shyam
agreed to pay Girdhari
₹ 5,90,000 in full settlement of his claim.
e

Calculate the value of goodwill of the firm and pass the necessary journal entry for the treatment of goodwill on
erc

Girdhari's retirement without raising goodwill account.

25. A, B and C are partners in a firm whose books are closed on March 31st each year. A died on 30th June 2023 and [4]
according to the agreement the share of profits of a deceased partner up to the date of the death is to be
mm

calculated on the basis of the average profits for the last five years. The net profits for the last 5 years have been:
2019 ₹ 14,000; 2020 ₹ 18,000; 2021 ₹ 16,000; 2022 ₹ 10,000 (loss) and 2023 ₹ 16,000. Calculate A’s share of
the profits up to the date of death and pass necessary journal entry assuming:
i. there is no change in the profit sharing ratio of remaining partners;
Co

ii. there is change in the profit sharing ratio of remaining partners, new ratio being 3 : 2.

26. Hemant, Nari and Laxman are equal partners. Nari retired from the firm on 1st April, 2023 and remaining [4]
partners decided to share future profits in the ratio of 5 : 4. Remaining partners also decide on Nari's retirement
to record the effect on the following without affecting their book values by passing an adjustment entry.

Book Values (₹)

General Reserve 60,000

Contingency Reserve 10,000

Profit & Loss A/c (Cr.) 30,000

Advertisement Suspense A/c 10,000

Pass an adjustment entry.

6/7
27. A and B are partners sharing profits and losses equally. They decided to dissolve their firm. Assets and [4]
Liabilities have been transferred to Realisation Account. Pass necessary Journal entries for the following.
i. A was to bear all the expenses of Realisation for which he was given a commission of Rs 4000.
ii. Advertisement suspense account appeared on the asset side of the Balance sheet amounting Rs 28000
iii. Creditors of Rs 40,000 agreed to take over the stock of Rs 30,000 at a discount of 10% and the balance in
cash.
iv. B agreed to take over Investments of Rs 5000 at Rs 4900
v. Loan of Rs 15000 advanced by A to the firm was paid off.
vi. Bank loan of Rs 12000 was paid off.

28. i. Expenses of realisation ₹ 8,000. [4]

ii. Expenses of realisation ₹ 10,000 were paid by a partner.
iii. Realisation expenses of ₹ 12,000 were to be met by Ram, a partner, were paid by the firm.

y
iv. Sunil, a partner, was paid remuneration of ₹ 10,000 and he was to meet all expenses.

m
v. Vijay, a partner, was paid remuneration of ₹ 15,000 and he was to meet all expenses. Actual Expenses
amounted to ₹ 20,000 which were paid by the firm.

de
vi. Realisation expenses amounting to ₹ 15,000 were paid by the firm. ₹ 10,000 were to be borne by a partner
and the balance by the firm.

a
vii. Gaurav, a partner, was allowed a remuneration of ₹ 25,000 and he was to meet all expenses. Firm paid an
Ac
expense of ₹ 5,000.
e
erc
mm
Co

7/7