Test Name: Road to

Board: CBSE Standard: 12th Subject: Accountancy

score 100 out of 100

Student Name:__________________ Section:________ Roll No.:__________

Time: 3 Minutes Worksheet

Section A
mcqs
Attempt all questions.

1: A, B, C and D are partners in a firm. They want to expand their business for which additional capital
and more managerial experts are required. For this they want to admit more members in their firm.
What is the maximum number of additional members that can be admitted by them in the firm:
02 50
20 46

2: The minimum number of partners allowed to open a partnership firm is :

10 2
5 20

3: In the absence of Partnership Deed, the profits of a firm are divided among the partners :
In the ratio of Capital Equally
According to the managerial abilities of
In the ratio of time devoted for the firm’s business
the partners

4: In the absence of Partnership Deed, interest on loan of a partner is allowed :

at 8% per annum at 6% per annum
at 12% per annum no interest is allowed

5: The document that contains the terms of partnership is called:

Partnership Agreement Partnership Contract
Partnership Deed Partnership Rules

6: Pick the odd one out :

Interest on capital Interest on drawings
Interest on partner’s loan Salary to partner

7: Which of the following items is not dealt through Profit and Loss Appropriation Account ?
Interest on partner’s loan Partner’s salary
Interest on partner’s drawings Partner’s commission

8: The Journal Entry to transfer interest on capital to Profit and Loss Appropriation Account would be :
Interest on Capital A/c Dr. Profit & Loss Appropriation A/c Dr.
To Profit & Loss Appropriation A/c To Interest on Capital A/c
Profit & Loss A/c Dr.
Partner’s Current A/c Dr. None of the above
To Interest on Capital A/c
9: A and B were partners in a firm. Their capitals at the end of the year ending on 31.3.2021 were ₹
3,00,000 and
₹ 1,50,000 respectively. During the year B withdrew ₹ 10,000, which was debited to his capital account.
Profit
for the year ended 31st March, 2021 was ₹ 32,000 which was credited to their capital accounts. During
the year
B introduced additional capital ₹ 32,000. What was B's capital on 1.4.2020?
₹ 1,50,000 ₹ 1,60,000
₹ 1,12,000 ₹ 1,52,000

10: Sharma and Verma were partners in a firm. The partnership deed provided that interest on partners'
drawings will be charged @ 12% per annum. During the year, Sharma withdrew ₹ 6,000. Interest on
his drawings will be:
₹ 600 ₹ 330
₹ 360 ₹ 720

11: Sangeet and Suman were partners in a firm sharing profits and losses in the ratio of 7 : 3. During the
year ended 31.3.2021, the firm earned a profit of ₹ 1,00,000. After preparation of the financial
statements it was discovered that salary to Suman @ ₹ 3,000 per month had been omitted. The
necessary adjustment entry for the same will be:
Profit and Loss
Sangeet's Capital A/c Dr.(₹) 36,000
Appropriation A/c Dr.(₹) 36,000
To Suman's Capital A/c (₹) 36,000
To Suman's Capital A/c (₹) 36,000
Profit and Loss
Sangeet's Capital A/c Dr.(₹) 25,200
Adjustment A/c Dr. (₹) 36,000
To Suman's Capital A/c (₹) 25,200
To Suman's Capital A/c (₹) 36,000

12: Pick the odd one out :

Rent to Partner Manager’s Commission
Interest on Partner’s Loan Interest on Partner’s Capital

13: Statement I: The profits and losses of the firm are distributed among the partners in an
agreed ratio.

Statement II: If the partnership deed is silent, the firm’s profits and losses are to be shared
equally by all the partners.

Choose the correct option from options given below:

Statement I is correct and statement II is Statement II is correct and statement I is
wrong. wrong.
Both the statements are correct. Both the statements are wrong.

14: Statement I: Partnership is defined as “Relation between persons who have agreed to share
the profits of a business equally carried on by all or any one of them acting for all.

Statement II: If partnership deed is silent in respect of certain aspects, the relevant
provisions of the Indian Partnership Act, 1932 become applicable.

Choose the correct option from options given below:

Statement I is correct and statement II is Statement II is correct and statement I is
wrong. wrong.
Both the statements are correct. Both the statements are wrong.
15: Statement I: The distribution of profits among the partners is shown through a Profit and
Loss Appropriation Account.

Statement II: Profit and Loss Appropriation Account is merely an extension of the Profit and
Loss Account of the firm.

Choose the correct option from options given below:

Statement I is correct and statement II is Statement II is correct and statement I is
wrong. wrong.
Both the statements are correct. Both the statements are wrong.

16: Assertion (A): Co-ownership of property does not account to partnership.

Reason (R): The element of business is present in co-ownership.
Both assertion (A) and reason (R) are true and Both assertion (A) and reason (R) are true but
reason (R) is the correct explanation of assertion reason (R) is not the correct explanation of
(A). assertion (A).
Assertion (A) is true but reason (R) is false. Assertion (A) is false but reason (R) is true.

17: Assertion (A): Partners always share profit and losses equally.
Reason (R): Partnership is the relation between persons who have agreed to share the profits of
a business carried on by all or any of them acting for all.
Both Assertion (A) and Reason (R) are true, and Both Assertion (A) and Reason (R) are true, but
Reason (R) is the correct explanation of Assertion Reason (R) is not the correct explanation of
(A). Assertion (A).
Assertion (A) is true, but Reason (R) is false . Assertion (A) is false, but Reason (R) is true.

18: Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.
Reason (R): The capital of the partners is fixed, and all the transactions is recorded in the
current account.
Both Assertion (A) and Reason (R) are true, and Both Assertion (A) and Reason (R) are true, and
Reason (R) is the correct explanation of Assertion Reason (R) is not the correct explanation of
(A). Assertion (A).
Assertion (A) is true, but Reason (R) is false . Assertion (A) is false, but Reason (R) is true.

19: Assertion (A): Goodwill is an intangible asset.

Reason (R): It is the value of the reputation of a firm in respect of the profits expected in future over
and above the normal profits.
Both assertion (A) and reason (R) are true Both assertion (A) and reason (R) are true but
and reason (R) is the correct explanation of reason (R) is not the correct explanation of
assertion (A). assertion (A).
Assertion (A) is true but reason (R) is false. Assertion (A) is false but reason (R) is true.

20: Assertion (A): If percentage of interest on capital is not mentioned in partnership deed, partners
will not receive any interest on capital.
Reason (R): The interest on capital is provided on the capital invested by the partners.
Both Assertion (A) and Reason (R) are true, and Both Assertion (A) and Reason (R) are true, and
Reason (R) is the correct explanation of Assertion Reason (R) is not the correct explanation of
(A). Assertion (A).
Assertion (A) is true, but Reason (R) is false. Assertion (A) is false, but Reason (R) is true.

21: I. On the basis of following information, answer the given questions:

Asif and Ravi are partners in a firm, sharing profits and losses in the ratio of 3 : 2. Their fixed capitals
as on 1st April, 2016 were ₹ 6,00,000 and ₹ 4,00,000 respectively. Their partnership deed provides for
 the following :

(i) Partners are to be allowed interest on their capital @ 10% per annum.

(ii) They are to be charged interest on drawings @ 4% per annum.

(iii) Asif is entitled to a salary of ₹2,000 per month.

(iv) Ravi is entitled to a commission of 5% of the net profit of the firm before charging such
commission.

(v) Asif is entitled to a rent of ₹ 3,000 per month for the use of his premises by the firm.

The net profit of the firm for the year ended 31st March, 2017, before providing for any of the above
clauses was ₹ 4,00,000. Both partners withdrew ₹ 5,000 at the beginning of every month for the entire
year.

The amount of Interest on Asif’s Capital, shown in the Profit and Loss Appropriation Account is:
₹ 60,000 ₹ 40,000
₹ 20,000 ₹ 30,000

22: I. On the basis of following information, answer the given questions:

Asif and Ravi are partners in a firm, sharing profits and losses in the ratio of 3 : 2. Their fixed capitals
as on 1st April, 2016 were ₹ 6,00,000 and ₹ 4,00,000 respectively. Their partnership deed provides for
the following :

(i) Partners are to be allowed interest on their capital @ 10% per annum.

(ii) They are to be charged interest on drawings @ 4% per annum.

(iii) Asif is entitled to a salary of ₹2,000 per month.

(iv) Ravi is entitled to a commission of 5% of the net profit of the firm before charging such
commission.

(v) Asif is entitled to a rent of ₹ 3,000 per month for the use of his premises by the firm. The net profit
of the firm for the year ended 31st March, 2017, before providing for any of the above clauses was ₹
4,00,000. Both partners withdrew ₹ 5,000 at the beginning of every month for the entire year.

How much commission is to be given to Ravi?

₹ 19,047 ₹ 18,200
₹ 19,200 ₹ 18,047

23: I. On the basis of following information, answer the given questions:

Asif and Ravi are partners in a firm, sharing profits and losses in the ratio of 3 : 2. Their fixed capitals
as on 1st April, 2016 were ₹ 6,00,000 and ₹ 4,00,000 respectively. Their partnership deed provides for
the following :

(i) Partners are to be allowed interest on their capital @ 10% per annum.

(ii) They are to be charged interest on drawings @ 4% per annum.

(iii) Asif is entitled to a salary of ₹2,000 per month.

 (iv) Ravi is entitled to a commission of 5% of the net profit of the firm before charging such
commission.

(v) Asif is entitled to a rent of ₹ 3,000 per month for the use of his premises by the firm. The net profit
of the firm for the year ended 31st March, 2017, before providing for any of the above clauses was ₹
4,00,000. Both partners withdrew ₹ 5,000 at the beginning of every month for the entire year.

How much salary is Asif entitled to the full year?

₹ 24,000 ₹ 20,000
₹ 18,000 ₹ 21,000

24: I. On the basis of following information, answer the given questions:

Asif and Ravi are partners in a firm, sharing profits and losses in the ratio of 3 : 2. Their fixed capitals
as on 1st April, 2016 were ₹ 6,00,000 and ₹ 4,00,000 respectively. Their partnership deed provides for
the following :

(i) Partners are to be allowed interest on their capital @ 10% per annum.

(ii) They are to be charged interest on drawings @ 4% per annum.

(iii) Asif is entitled to a salary of ₹2,000 per month.

(iv) Ravi is entitled to a commission of 5% of the net profit of the firm before charging such
commission.

(v) Asif is entitled to a rent of ₹ 3,000 per month for the use of his premises by the firm. The net profit
of the firm for the year ended 31st March, 2017, before providing for any of the above clauses was ₹
4,00,000. Both partners withdrew ₹ 5,000 at the beginning of every month for the entire year.

How will the rent to be paid to Asif treated?

It will be in the debit side of Profit and
It will be subtracted from the Net Profit.
Loss Appropriation Account.
It will be deducted from the Capital Account of
It will be added to the Capital Account of Asif.
Ravi.

25: II. On the basis of following information, answer the given questions:

Anita, Asha and Bashir are partners sharing profits and losses in the ratio of 3 : 2 : 1 respectively. On
1st April, 2016, they decided to change their profit sharing ratio. Their partnership deed provides that
in the event of any change in the profit sharing ratio, the goodwill of the firm should be valued at two
years' purchase of the average super profits for the past three years :

2015-16 Profit ₹ 40,000

2014-15 Profit ₹ 30,000

2013-14 loss ₹ 10,000

The average capital employed in the business was ₹ 1,10,000; the rate of interest expected from capital
invested was 10%.

The total profit earned in three years is __________.

₹ 80,000 ₹ 70,000
 ₹ 60,000 None of these

26: II. On the basis of following information, answer the given questions:

Anita, Asha and Bashir are partners sharing profits and losses in the ratio of 3 : 2 : 1 respectively. On
1st April, 2016, they decided to change their profit sharing ratio. Their partnership deed provides that
in the event of any change in the profit sharing ratio, the goodwill of the firm should be valued at two
years' purchase of the average super profits for the past three years :

2015-16 Profit ₹ 40,000

2014-15 Profit ₹ 30,000

2013-14 loss ₹ 10,000

The average capital employed in the business was ₹ 1,10,000; the rate of interest expected from capital
invested was 10%.

The Super Profit of the firm is ________.

₹ 10,000 ₹ 20,000
₹ 9,000 ₹ 18,000

27: II. On the basis of following information, answer the given questions:

Anita, Asha and Bashir are partners sharing profits and losses in the ratio of 3 : 2 : 1 respectively. On
1st April, 2016, they decided to change their profit sharing ratio. Their partnership deed provides that
in the event of any change in the profit sharing ratio, the goodwill of the firm should be valued at two
years' purchase of the average super profits for the past three years :

2015-16 Profit ₹ 40,000

2014-15 Profit ₹ 30,000

2013-14 loss ₹ 10,000

The average capital employed in the business was ₹ 1,10,000; the rate of interest expected from capital
invested was 10%.

What is the amount of goodwill as calculated?

₹ 18,000 ₹ 20,000
₹ 27,000 None of these

28: II. On the basis of following information, answer the given questions:

Anita, Asha and Bashir are partners sharing profits and losses in the ratio of 3 : 2 : 1 respectively. On
1st April, 2016, they decided to change their profit sharing ratio. Their partnership deed provides that
in the event of any change in the profit sharing ratio, the goodwill of the firm should be valued at two
years' purchase of the average super profits for the past three years :

2015-16 Profit ₹ 40,000

2014-15 Profit ₹ 30,000

2013-14 loss ₹ 10,000

The average capital employed in the business was ₹ 1,10,000; the rate of interest expected from capital
invested was 10%.
 The normal profit earned by the firm is __________.

₹ 9,000 ₹ 11,000
₹ 18,000 ₹ 60,000

29: Which of the following does not result into reconstitution of a firm ?
Dissolution of partnership firm Dissolution of partnership
Change in profit sharing ratio of existing partners Death of partner

30: Which of the following is/are required at the time of change in profit sharing ratio among partners?
Revaluation of assets and reassessment of
Accounting treatment of goodwill
liabilities
Accounting treatment of Accumulated Profit All of the above

31: Pick the odd one out:

Admission of Partner Death of a Partner
Retirement of a Partner Dissolution of the Partnership firm

32: Arun and Vijay are partners in a firm sharing profits and losses in the ratio of 5 : 1.

Balance Sheet (Extract)

Amount Amount
Liabilities Assets
INR INR
Machinery 40,000

If value of machinery in the balance sheet is undervalued by 20%, then at what value will machinery be
shown in new balance sheet ?
₹ 44,000 ₹ 48,000
₹ 32,000 ₹ 50,000

33: Avya, Divya and Kavya were equal partners. They decided to change the profit sharing ratio to 4 : 3 : 2. For
this purpose the goodwill of the firm was valued at ₹ 90,000.

The journal entry for the treatment of goodwill on change in profit sharing ratio will be :
Avya’s Capital A/c Dr. 10,000
Divya’s Capital A/c Dr. 10,000
To Kavya’s Capital A/c
To Avya’s Capital A/c 10,000
10,000
Avya’s Capital A/c Dr. 90,000 Kavya’s Capital A/c Dr. 10,000
To Kavya’s Capital A/c 90,000 To Avya’s Capital A/c 10,000

34: Ram and Shyam are equal partners in a partnership. They decided to change their ratio as 2 : 1. On that date,
general reserve appeared in the books as ₹ 30,000. What amount of reserve will be transferred to Shyam's
Capital Account ?
₹ 5,000 ₹ 10,000
₹ 15,000 ₹ 20,000

35: Anwar and Bashir were partners in a firm sharing profit or losses in the ratio 7:5. With effect from 1st April
2021 they agreed to share profits in the ratio of 5:4. Due to the change in profit sharing ratio what is Bashir’s
gain or sacrifice?
 Sacrifice Gain
1 1

36 36

Gain Sacrifice
1 1

12 12

36: Identify the journal entry for the transfer of workman compensation fund to the Partner’s Capital Account at
the time of change of profit sharing ratio.
Profit & Loss Appropriation A/c Dr. Profit & Loss A/c Dr.
To Partners’ Capital/Current A/cs To Workmen’s Compensation Fund A/cs
(Being Workmen’s Compensation (Being Workmen’s Compensation
Fund to the Partners Capital A/c) Fund to the Partners Capital A/c)
Partners’ Capital/Current A/cs Dr. Workmen’s Compensation Fund A/c Dr.
To Workmen’s Compensation Fund A/c To All Partners’ Capital A/cs
(Being Workmen’s Compensation (Being Workmen’s Compensation
Fund to the Partners Capital A/c) Fund to the Partners Capital A/c)

37: How is goodwill treated when there is a change in the profit sharing ratio?
The gaining partners give the
The gaining partners give the amount of goodwill
proportionate amount of goodwill to the sacrificing
to the sacrificing partner.
partner.
The sacrificing partner give the
The sacrificing partner gives the amount
proportionate amount of goodwill to the gaining
of goodwill to the gaining partner.
partner.

38: Due to change in the profit sharing ratio, Anisha's

gain is 1/5th while Harit's sacrifice is 1/5th. They
decided to adjust the following without affecting
their book values, by passing a single adjustment
entry:
General Reserve ₹ 20,000
Profit & Loss Account (Cr.) ₹ 30,000
The necessary adjustment entry will be:
Debit Anisha's capital account by ₹ 2,000 and Debit Anisha's capital account by ₹ 10,000 and
credit Harit's capital account by ₹ 2,000. credit Harit's capital account by ₹ 10,000.
Debit Harit's capital account by ₹ 2,000 and Debit Harit's capital account by ₹ 10,000 and
credit Anisha's capital account by ₹ 2,000. credit Anisha's capital account by ₹ 10,000.

39: On the reconstitution of a firm, the value of land was to be appreciated by ₹ 2,00,000 and plant
and machinery was to be reduced to ₹ 7,00,000 from ₹ 10,00,000. Gain or Loss on revaluation will be:
Gain ₹ 1,00,000 Loss ₹ 1,00,000
Loss ₹ 5,00,000 Gain ₹ 5,00,000

40: Statement I: When new partner is admitted he acquires his share in profits from the old
partners.

Statement II: If nothing is specified as to how does the new partner acquire his share from
the old partners; it may be assumed that he gets it from them equally.

Choose the correct option from options given below:

Statement I is correct and statement II is Statement II is correct and statement I is
wrong. wrong.
Both the statements are correct. Both the statements are wrong.

41: Assertion (A): When a new partner is admitted it results in the restructuring of the firm.
 Reason (R): When a new partner is added it leads to the change in profit sharing ratio.
Both Assertion (A) and Reason (R) are true, and Both Assertion (A) and Reason (R) are true, and
Reason (R) is the correct explanation of Assertion Reason (R) is not the correct explanation of
(A). Assertion (A).
Assertion (A) is true, but Reason (R) is false. Assertion (A) is false, but Reason (R) is true.

42: Assertion (A): Restructuring of the firm leads to the change in the profit sharing ratio.

Reason (R): A change in the profit sharing ratio among the existing partners results in a gain of additional
share in the future profit for some partners while a loss of a part thereof for other partners.
Both Assertion (A) and Reason (R) are true, and Both Assertion (A) and Reason (R) are true, and
Reason (R) is the correct explanation of Assertion Reason (R) is not the correct explanation of
(A). Assertion (A).
Assertion (A) is true, but Reason (R) is false. Assertion (A) is false, but Reason (R) is true.

43: Assertion (A): Dissolution of the partnership firm is also called restructuring of the partnership.

Reason (R): Restructuring of the firm leads to the change in profit sharing ratio and adjustment of goodwill.
Both Assertion (A) and Reason (R) are true, and Both Assertion (A) and Reason (R) are true, and
Reason (R) is the correct explanation of Assertion Reason (R) is not the correct explanation of
(A). Assertion (A).
Assertion (A) is true, but Reason (R) is false. Assertion (A) is false, but Reason (R) is true.

44: Assertion (A): At the time of change in profit sharing ratio, it is important to determine the sacrificing ratio
and gaining ratio of partners.

Reason (R): The gaining partners compensate the sacrificing partners by paying them appropriate amount of
goodwill.
Both Assertion (A) and Reason (R) are true, and Both Assertion (A) and Reason (R) are true, and
Reason (R) is the correct explanation of Assertion Reason (R) is not the correct explanation of
(A). Assertion (A).
Assertion (A) is true, but Reason (R) is false. Assertion (A) is false, but Reason (R) is true.

45: Assertion (A): The gaining partner transfers the amount of goodwill to the sacrificing partners in proportion.

Reason (R): The gaining ratio is the share of profit gained by a partner when there is a change in the profit
sharing ratio.
Both Assertion (A) and Reason (R) are true, and Both Assertion (A) and Reason (R) are true, and
Reason (R) is the correct explanation of Assertion Reason (R) is not the correct explanation of
(A). Assertion (A).
Assertion (A) is true, but Reason (R) is false. Assertion (A) is false, but Reason (R) is true.

Section B
numericals
Attempt all questions.

1: On 1.4.2022, Jay and Vijay entered into partnership for supplying laboratory equipment to government
schools situated in remote and backward areas. They contributed capitals of ₹ 80,000 and ₹ 50,000
respectively and agreed to share the profits in the ratio of 3 : 2. The partnership deed provided that
Interest on Capital shall be allowed at 9% per annum. During the year, the firm earned a profit of ₹
7,800.
Showing your calculations clearly, prepare Profit and Loss Appropriation A/c of Jay and Vijay for the
year ended 31.3.2023.
2: Abhay, Bheem and Chunnu are partners in a firm. They had omitted Interest on Capital @ 10% p.a.
for three years ended 31st March, 2023. Their fixed capitals on which interest was to be calculated were
:
A ₹ 1,00,000
B ₹ 80,000
C ₹ 70,000
Give the necessary adjusting journal entry and show your working notes clearly.

3: Following is the Profit and Loss Appropriation Account of a firm in which A, B and C are equal
partners.

Following is the Profit and Loss Appropriation Account of a firm in which A, B and C are equal
partners.
Profit and Loss Appropriation Account
Dr. for the year ended 31st March, 2023 Cr.
Particulars Amount (₹) Particulars Amount (₹)
To Profits transferred to: By Profit & Loss A/c (Net Profit) 3,00,000

A’s capital A/c

1,00,000

B‘s capital A/c

1,00,000

C’s capital A/c 3,00,000

1,00,000 3,00,000 3,00,000

After preparing the final accounts, it was known that interest on capital amounting to A ₹12,000, B
₹ 9,600 and C ₹10,500 was not allowed and also interest was not charged on drawings of A and B
amounting to A ₹1,200 and B ₹ 900.
Pass an adjustment entry to rectify the given adjustment.

4: Vikas and Vivek were partners in a firm sharing profits in the ratio of 3 : 2. On 1.4.2023, they
admitted Vandana as a new partner for th share in the profits with a guaranteed profit of ₹ 1,50,000.
1

The new profit sharing ratio between Vivek and Vikas will remain the same but they decided to bear
any deficiency on account of guarantee to Vandana in the ratio 2 : 3. The profit of the firm for the year
ended 31.3.2015 was ₹ 9,00,000.
Prepare Profit & Loss Appropriation A/c of Vikas, Vivek and Vandana for the year ended 31.3.2015.
5: Amann, Babita and Suresh are partners in a firm. Their profit sharing ratio is 2 : 2 : 1. Suresh is
guaranteed
a minimum amount of ₹ 10,000 as share of profit, every year. Any deficiency on that account shall be
met
by Babita. The profits for two years ending March 31, 2016 and March 31, 2017 were ₹ 40,000
and ₹ 60,000, respectively. Prepare the Profit and Loss Appropriation Account for the two years.

6: A and 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 ₹ 1,60,000 and ₹ 1,40,000 for A and B respectively.
Their drawings during the year were ₹ 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 ₹ 90,000. Show your workings
clearly.

7: A and B are partners sharing profits and losses in the ratio of 3 : 2. Their capitals on 31st March, 2018
after all
adjustments stood at ₹ 1,65,500 and ₹ 1,27,600 respectively.
Profits amounting to ₹ 50,000 for the year 2017-18 were distributed after allowing interest on drawings
@ 12% p.a. During the year, A withdrew ₹ 15,000 at the beginning of every quarter and B withdrew ₹
40,000 during the year. Partnership deed is silent on interest on drawings but provides for interest on
Capital @ 5% p.a. Interest on Capital has not been provided.
Showing your workings clearly, pass the necessary adjustment entry to rectify the above errors.

8: Puneet and Akshara were partners in a firm sharing profits and losses in the ratio of 2 : 3. The
following was the balance sheet of the firm as on 31st March, 2019 :
Balance Sheet of Puneet and Akshara
as on 31st March, 2019

Liabilities Amount (₹) Assets Amount (₹)

Capital :
Puneet 90,000 Sundry Assets 2,00,000
Akshara 1,10,000 2,00,000
2,00,000 2,00,000

The profits ₹ 40,000 for the year ended 31st March, 2019 were divided between the partners without
allowing interest on capital @ 5% p.a. and commission to Akshara @ ₹ 1,000 per quarter.
The drawings of the partners during the year were :
Puneet ₹ 2,500 per month.
Akshara ₹ 10,000 per quarter.
Showing your workings clearly, pass necessary adjustment entry in the books of the firm.
9: Ajay, Binay and Chetan were partners sharing profits in the ratio of 3 : 3 : 2. The partnership deed
provided for the following :
(i) Salary of ₹ 2,000 per quarter to Ajay and Binay.
(ii) Chetan was entitled to a commission of ₹ 8,000.
(iii) Binay was guaranteed a profit of ₹ 50,000 p.a.
The profit of the firm for the year ended 31st March, 2015 was ₹ 1,50,000 which was distributed among
Ajay, Binay and
Chetan in the ratio of 2 : 2 : 1, without taking into consideration the provisions of partnership deed.
Pass necessary
rectifying entry for the above adjustments in the books of the firm. Show your working clearly.

10: Sonu and Rajat started a partnership firm on April 1, 2017. They contributed ₹ 8,00,000 and ₹ 6,00,000
respectively as their capitals and decided to share profits and losses in the ratio of 3 : 2.
The partnership deed provided that Sonu was to be paid a salary of ₹ 20,000 per month and Rajat a
commission of 5% on turnover. It also provided that interest on capital be allowed @8% p.a. Sonu
withdrew ₹ 20,000 on 1st December, 2017 and Rajat withdrew ₹ 5,000 at the end of each month. Interest
on drawings was charged @6% p.a. The net profit as per Profit and Loss Account for the year ended
31st March, 2018 was ₹ 4,89,950. The turnover of the firm for the year ended 31st March, 2018
amounted to ₹ 20,00,000. Pass necessary journal entries for the above transactions in the books of Sonu
and Rajat.

11: Naveen, Qadir and Rajesh were partners doing an electronic goods business in Uttarakhand. After the
accounts
of partnership were drawn up and closed, it was discovered that interest on capital has been allowed to
partners @6% p.a. for the years ending 31st March, 2017 and 2018, although there is no provision for
interest
on capital in the partnership deed. On the other hand, Naveen and Qadir were entitled to salary of ₹
3,500
and ₹ 4,000 per quarter respectively, which has not been taken into consideration. Their fixed capitals
were
₹ 4,00,000, ₹ 3,60,000 and ₹ 2,40,000 respectively. During the last two years, they had shared the profits
and losses as
follows :
Year Ended Ratio
st
31 March, 2017 3:2:1
st
31 March, 2018 5:3:2
Pass necessary adjusting entry for the above adjustments in the books of the firm on 1st April, 2018.
Show your
working clearly.

12: Mudit and Uday are partners in a firm sharing profits in the ratio 2 : 3. Their capital accounts as on
April 1, 2015, showed balances of ₹ 70,000 and ₹ 60,000 respectively. The drawings of Mudit and Uday
during the year 2015-16 were ₹ 16,000 and ₹ 12,000 respectively. Both the amounts were withdrawn on
1st January, 2016. It was subsequently found that the following items had been omitted while preparing
the final accounts for the year ended 31st March, 2016 :
 (i) Interest on capitals @ 6% p.a.;
(ii) Interest on drawings @ 6% p.a.;
(iii) Mudit was entitled to a commission of ₹ 4,000 for the whole year.
Showing your workings clearly, pass a rectifying entry in the books of the firm.

13: I. Read the passage given below and answer the questions that follow:

The capital accounts of X and Y showed balance of ₹ 40,000 and ₹ 20,000 on 1st April, 2017. They
shared profits in the ration of 3:2. They are allowed interest on capitals @10% p.a. and are charged
interest on drawings @ 12% p.a. X also advanced a loan of ₹ 10,000 to the firm on 1st august, 2017.
During the year, X withdrew ₹ 1,000 per month at the beginning of every month while Y withdrew ₹
1,000 per month at the end of every month. The profits for the year ended 31st march, 2018 before the
above mentioned adjustments were ₹ 20,910.

How much interest will be charged on X’s drawings?

14: I. Read the passage given below and answer the questions that follow:

The capital accounts of X and Y showed balance of ₹ 40,000 and ₹ 20,000 on 1st April, 2017. They
shared profits in the ration of 3:2. They are allowed interest on capitals @10% p.a. and are charged
interest on drawings @ 12% p.a. X also advanced a loan of ₹ 10,000 to the firm on 1st august, 2017.
During the year, X withdrew ₹ 1,000 per month at the beginning of every month while Y withdrew ₹
1,000 per month at the end of every month. The profits for the year ended 31st march, 2018 before the
above mentioned adjustments were ₹ 20,910.

What interest will be charged on X’s loan?

15: I. Read the passage given below and answer the questions that follow:

The capital accounts of X and Y showed balance of ₹ 40,000 and ₹ 20,000 on 1st April, 2017. They
shared profits in the ration of 3:2. They are allowed interest on capitals @10% p.a. and are charged
interest on drawings @ 12% p.a. X also advanced a loan of ₹ 10,000 to the firm on 1st august, 2017.
During the year, X withdrew ₹ 1,000 per month at the beginning of every month while Y withdrew ₹
1,000 per month at the end of every month. The profits for the year ended 31st march, 2018 before the
above mentioned adjustments were ₹ 20,910.

Which account will be opened to distribute profit among partners after taking the above
adjustments in accounts?
16: Raka, Seema and Mahesh were partners sharing profits and losses in the ratio of 5 : 3 : 2. With effect
from 1st
April, 2019, they mutually agreed to share profits and losses in the ratio of 2 : 2 : 1.
On that date, there was a workmen’s compensation fund of ₹ 90,000 in the books of the firm. It was
agreed that:
(i) Goodwill of the firm be valued at ₹ 70,000.
(ii) Claim for workmen’s compensation amounted to ₹ 40,000.
(iii) Profit on revaluation of assets and reassessment of liabilities amounted to ₹ 40,000.
Pass the necessary journal entries for the above transactions in the books of the firm.

17: X and Y are partners in a firm, sharing profits and losses in the ratio of 3 : 2. On 31st March, 2018 their
Balance Sheet was as under :

Balance Sheet of X and Y

as at 31st March, 2018

Liabilities Amount (₹) Assets Amount (₹)

Sundry Creditors 13,800 Furniture 16,000
General Reserve 23,400 Land and Building 56,000
Investment Fluctuation Fund 20,000 Investments 30,000
X’s Capital 50,000 Trade Receivables 18,500
Y’s Capital 40,000 Cash in hand 26,700
1,47,200 1,47,200

The partners have decided to change their profit sharing ratio to 1 : 1 with immediate effect. For this
purpose, they decided that :
(a) Investments to be valued at ₹ 20,000.
(b) Goodwill of the firm valued at ₹ 24,000.
(c) General Reserve not to be distributed between the partners.
You are required to pass necessary journal entries in the books of the firm. Show workings.

18: X, Y and Z were sharing profits and losses in the ratio of 5 : 3 : 2. They decided to share future profits
and losses in the ratio of 2 : 3 : 5 with effect from 1.4.2007. They decided to record the effect of the
following, without affecting their book values :
(i) Profit and Loss Account ₹24,000
(ii) Advertisement Suspense Account ₹ 12,000
Pass the necessary adjusting entry.

19: Radhe and Krishna were partners in a firm. On 1st April they decided to change their ratio as 2:1. The
goodwill of the firm was valued at ₹ 90,000 and assets were found undervalued by ₹ 30,000. Pass the
necessary journal entries for the above transactions.
20: Radhika, Bani and Chitra were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 1.
With effect from 1st April, 2018 they decided to share future profits and losses in the ratio of 3 : 2 : 1.
On that date, their Balance Sheet showed a debit balance of ₹ 24,000 in Profit & Loss Account and a
balance of ₹ 1,44,000 in General Reserve. It was also agreed that :
(a) The goodwill of the firm be valued at ₹ 1,80,000.
(b) The Land (having book value of ₹ 3,00,000) will be valued at ₹ 4,80,000.
Pass the necessary journal entries for the above changes.

21: P, Q and R were partners in a firm sharing profits in the ratio of 1 : 1 : 2. On 31st March, 2018, their
balance sheet showed a credit balance of ₹ 9,000 in the Profit and Loss Account and a Workmen's
Compensation Fund of `₹64,000. From 1st April, 2018 they decided to share profits in the ratio of 2 : 2 :
1. For this purpose it was agreed that :
(a) Goodwill of the firm was valued at ₹ 4,00,000.
(b)A claim on account of workmen compensation of ₹ 30,000 was admitted.
Pass the necessary journal entries on reconstitution of the firm.

22: Aman, Bobby and Chandani were partners in a firm sharing profits and losses in the ratio of 5 : 4 : 1.
From 1st April, 2018 they decided to share profits equally. The revaluation of assets and reassessment
of liabilities resulted in a loss of ₹ 5,000. The goodwill of the firm on its reconstitution was valued at ₹
1,20,000. The firm had a balance of ` 20,000 in General Reserve.
Showing your workings clearly pass the necessary journal entries on the reconstitution of the firm.

23: Hari, Kunal and Uma are partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. From 1st
April, 2018 they decided to share future profits and losses in the ratio of 2 : 5 : 3. Their Balance Sheet
showed a balance of ₹ 75,000 in the Profit and Loss Account and a balance of ₹ 15,000 in Investment
Fluctuation Fund. For this purpose, it was agreed that :
(i) Goodwill of the firm was valued at ₹ 3,00,000.
(ii) That investments (having a book value of ₹ 50,000) were valued at ₹ 35,000.
(iii) That stock having a book value of ₹ 50,000 be depreciated by 10%.
Pass the necessary journal entries for the above in the books of the firm.

24: L, M and N were partners in a firm sharing profits in the ratio of 2 : 3 : 5. From lst April, 2018, they
decided to share the profits in the ratio of 1 : 2 : 2. On this date, the Balance Sheet showed a credit
balance of ₹ 1,17,000 in General Reserve and a debit balance of ₹ 35,000 in Profit and Loss Account.
The goodwill of the firm was valued at ₹ 5,00,000. The revaluation of assets and reassessment of
liabilities resulted into a gain of ₹ 30,000. Pass the necessary journal entries for the above transactions
on the reconstitution of the firm.
25: I. Read the passage given below and answer the questions that follow:

Simmi, Rimmi and Dimmi were partners in a firm sharing profits equally. On 1st April, 2018, they
decided to change their ratio as 1:2:3. The following adjustments were taken?

(i) Goodwill already existing in the books of ₹ 30,000 to be written off.

(ii) Profit on revaluation of assets and re-assessment of liabilities amounted to ₹ 60,000.

(iii) Goodwill of the firm was valued at ₹ 4,80,000.

Calculate the gain/sacrifice part of Simmi on change in profit sharing rate,

26: I. Read the passage given below and answer the questions that follow:

Simmi, Rimmi and Dimmi were partners in a firm sharing profits equally. On 1st April, 2018, they
decided to change their ratio as 1:2:3. The following adjustments were taken?

(i) Goodwill already existing in the books of ₹ 30,000 to be written off.

(ii) Profit on revaluation of assets and re-assessment of liabilities amounted to ₹ 60,000.

(iii) Goodwill of the firm was valued at ₹ 4,80,000.

Give the journal entry to write off the existing goodwill of the firm.

27: I. Read the passage given below and answer the questions that follow:

Simmi, Rimmi and Dimmi were partners in a firm sharing profits equally. On 1st April, 2018, they
decided to change their ratio as 1:2:3. The following adjustments were taken?

(i) Goodwill already existing in the books of ₹ 30,000 to be written off.

(ii) Profit on revaluation of assets and re-assessment of liabilities amounted to ₹ 60,000.

(iii) Goodwill of the firm was valued at ₹ 4,80,000.

How much amount of goodwill will be compensated to Simmi’s by Dimmi?

28: II. Read the passage given below and answer the questions that follow:
 Raman and Kamal were partners in a firm sharing profits in the ratio of 2:1. From 1st April 2021, they
decided to profit or loss equally. On change in profit sharing ratio, the book value of machinery was ₹
80,000 and workmen’s compensation fund was ₹ 40,000.

They decided that machinery value to be increased to ₹ 1,00,000 and claim for workmen’s
compensation was determined at ₹ 40,000

What amount of machinery will be shown in Revaluation A/c ?

29: II. Read the passage given below and answer the questions that follow:

Raman and Kamal were partners in a firm sharing profits in the ratio of 2:1. From 1st April 2021, they
decided to profit or loss equally. On change in profit sharing ratio, the book value of machinery was ₹
80,000 and workmen’s compensation fund was ₹ 40,000.

They decided that machinery value to be increased to ₹ 1,00,000 and claim for workmen’s
compensation was determined at ₹ 40,000

What amount of workmen’s compensation fund will be transferred to partners’ capital account?