3 CHANGE IN PROFIT-SHARING RATIO AMONG THE

EXISTING PARTNERS
(Reconstitution of Partnership)
Question. 1
Any change in the relationship of existing partners which results in an end of the existing agreement and
enforce making of a new agreement is called:
(a) Revaluation of Partnership (b) Reconstitution of Partnership
(c)Relationship of Partnership (d) Dissolution of Partnership Firm

Question.2
Which of the following does not result into reconstitution of a firm?
(a) Dissolution of partnership firm. (b) Dissolution of partnership.
(c) Change in profit-sharing-ratio of
existing partners. (d) Death of partner
Question. 3
Identify the situation where Sacrifice/Gain Ratio is not applicable:
(a) When thete is change in profit sharing ratio (b) When a new partner is admitted
(c) At the time of retirement/death of a partner (d) When Purchased goodwill is written off from
the books

Question. 4
Which of the following is written off by the
partners at the time of reconstitution of firm?
(a) Goodwill (given in B/S)
(b) Preliminary Expense
(c) Advertisement Suspense (d) All of the above

Question. 5
State the ratio in which the partners share all the accumulated
profits, reserves, losses & fictitious assets in
case of change in profit sharing ratio.
(a) Old Profit Sharing Ratio (b) New Ratio
(c) Sacrificing Ratio (d) Only Gain Ratio
Question. 6
Which of the following is not transferred to partners' capital account?
(a) Retained earnings (b) General reserve
()Employees provident fund (d) Contingency reserve
3.1
 Ultimate Accounta.
3.2 VINESH Target
Cy-X
Question. 7
ount?
ne tollowing is shown in the debit side of partners' capital accou
revaluation
(a) Profit on revaluation (b) Loss on Account (Cr. balancei
() P/L Appropriation Account and Loss
(Profit) d) Profit
Question. 8

Which of the following statement is not correct?

a) Change in profit sharing ratio leads to dissolution of partnerslhip and not the

(b) Sacrificed Share Old Share New Share

= -

(c) Gain Share =

New Share Old Share
-

(a)Self-generated goodwill is shown in the assets side of Balance Sheet

Question.9
Vinod and Ashish are sharing profits in the ratio of 2:1. Now they have decided that new profit sharing rat
will be equal. What will be the Gain/Sacrifice Ratio?
(a) Vinod Gain 1/6 and Ashish Sacrifice 1/6 (b)Vinod Sacrifice 1/6 and Ashish Gain 1/6
(c) Vinod Gain 4/5 and Ashish Sacrifice 4/5 () Vinod Sacrifice 2/3 and Ashish Gain 1/6

Question. 10

Yuvraj, Simran and Vinod are sharing profits in the ratio of 3:2:1. As per the new Agreement, Vinod
Acquires 1/6th share from Yuvraj. What will be the new profit sharing ratio of the partners?
(a) 1:1:1 (b) 2:2:1 (c) 3:2:1 (d) 2:3:1

Question. 11

SK and PK were partners in a firm sharing profits in 3:2 ratio. From 1st April, 2021 they decided to chang
it to 3:1. The Sacrifice/Gain share of SK
(a) Sacrifice 3/20 b) Sacrifice 3/10 (c) Gain 3/10 (d) Gain 3/20

Question. 12
x, Y and Z are sharing profits in the ratio of 1:1:1. They decided to share profits in the ratio of 2:3:5. Th
goodwill of the firm was valued at Rs.3,60,000.
Z's Capital Account will be:
(a) Credited by 48,000 (6) Credited by 12,000
(c) Credited by 1,20,000 (d) Debited by 60,0000
Question. 13
Which of the following statement is correct?
(a) Increase in the value of an asset is recorded in the debit side of Revaluation Account
hInerease in the value of a liability 1s recorded in the credit side of Revaluation Account
 3.3
in Profit-sharing Ratio Among the Existing Partners
hang
Account
c) Decrease
in the value of an asset is recorded in the debit side of Revaluation
Account
( Decrease
in the value of a
liability is recorded in the debit side of Revaluation
Question. 14

Account will be debited when:

Revaluation increases
Value of fixed assets
(a) Value of fixed assets decreases (b)
(C)Value ofliabilities reduces (d) None of these

Question. 15

which of the following is transferred to the partners' capital account?

(a) Land : nd Buildings (d) Creditors
(b) Loan (short-term) () General Reserve
Question. 16

Meera, Myra and Neera were partners sharing profits in the ratio of 2:2:1. They decided to share future
ofits in the ratio of7: 5: 3 with effect from lst April, 2021. Their Balance Sheet as on that date showed a
lance of Rs.45,000 in Advertisement Suspense Account. The amount to be debited respectively to the capital
counts of Meera, Myra and Neera for writing off the amount in Advertisement Suspense Account will be :
(a) 18,000, 18,000 and 9,000 (b) 15,000, 15,000 and 15,000
(C)21,000, 15,000 and 9,000 (d) 22,500, 22,500 and Nil

Question. 17

AK, GK and KK were sharing profits in the ratio of 5:3:2. From 1st April 2021, they decided to share the
rofits equally. Goodwill of the firm was valued Rs.2,40,000.
For adjustment of Goodwill, KK's Capital Account will be:
(a) Debited with Rs.8,000 (b) Credited with Rs.8,000
(c)Debited with Rs.32,000 (d) Credited with Rs.32,000

Question. 18
SK and PK were partners in a firm sharing profits in 3:2 ratio. From 1st April 2021, they decided to change
to 3:1. For this purpose the goodwill of the firm was valued at Rs.1,20,000.
PK's Capital Account will be:
(a) Debited by Rs.48,000 b) Debited with Rs.30,000
() Credited with Rs. 18,000 (d) Debited with Rs. 18,000

Question. 19
Ankit, Unnati and Aryan are partners sharing profits in the ratio of 5:3:2. They decided to share future profit
n the ratio of 2:3:5 with effect from 1st April 2021. They had the following balance in their Balance Sheet.
Profit and Loss Account (Dr.) 60,500.
Aryan's Capital Account will be:
(a) Debited by Rs.30,250 (b) Debited by Rs.18,150
() Debited by Rs.60,500 (d) Debited by Rs.12,100
 3.4 VINESH Target Ultimate Account

Question. 20
ountano
AR, GK and KK were partners in a firm sharing profits in the ratio of 5:3:2. From lst Apri.
il, 2021
E
o share the profits
equally. For this purpose, the goodwill of the i Rs.2,40,000.
amount partners are to be debited o r credited at the time of change in profit s h a r i n g ratio?

(a) GK Dr 8,000; KK Dr Cr 32,000 and AK.

32,000 and AK Cr 40,000 (b) GK Cr 8,000; KK 40
c) GK Dr 32,000; KK Dr (d) GK Cr 32,000; KK Cr 8,0 and AK Dra
8,000 and AK Cr 40,000
Question. 21
Avya, Divya and Kavya were
this purpose the equal partners. They decided to change the profit sharing ratio to « 4:3:2.
goodwill of the firm was valued at 90,000. The journal entry for the treatment of of (Goodwill
change in profit sharing ratio will be
(a) Kavya's Capital Alc. Dr.
10,000
To Avya's
Capital A/c. 10,000
(b) Divya's Capital A/c. Dr.
10,000
To Avya's
Capital A/Nc. 10,000
(c) Avya's Capital A/c. Dr.
90,000
To Kavya's
Capital A/c. 90,000
(d) Avya's Capital A/c. Dr.
10,000
To Kavya's
Capital A/c. 10,000
Question. 22
X, Y andZ
sharing profits in the ratio of 5:3:2.
Workmen They decided to share future
compensation Reserve of Rs.60,000 was profits in the ratio
of 2:3-
claim against it. available at the time of
change
in ratio and there was a
Y's Capital Account will be:
(a) Credited by Rs.30,000
(c) Credited by Rs.12,000 b) Credited by
Rs.18,000
(d) Debited by
Rs.18,000
Question. 23
X, Y and Z sharing profits in the ratio of 5:3:2.
Workmen compensation Reserve of They decided to share
Rs.60,000 future profits in the
against it.
was available at the time of ratio of 25
change in ratio, and claim of 40,-
Z's Capital Account will be:
(a) Credited by Rs.10,000
(c) Credited by Rs.30,000 (b) Credited
by Rs.12,000
dCredited by Rs.4,000
 Change in Profit-sharing Ratio Among the Existing Partners 3.5

Question. 24

and ZZ sharing profits

in the ratio of in the ratio of 2:3:5.
They decided to share future profits
and
X, Y
,
Y
5:3:2.
estment Fluctuation Reserve of Rs.4,000 was available at the time of change in profit sharing ratio, when investment
Invest

(market value Rs. 19,000) appears at Rs.20,000.

Account will be:
Y's Capital
(a) Debited by Rs.1,500 (b) Credited by Rs.1,500
(c) Credited by Rs.900 (d) Credited by Rs.600

Question. 25
Red Blue and White were sharing profits in the ratio of 1:2:2. They decided to share future profits in the ratio ot

from lst Revenue

1:5:3 with effect April 2021. On that date, their Balance Sheet showed balance in Deferred
Expenditure Account of Rs.22,500.
The amount will be debited to the partners' capital account as:
(a) 7,500; 7,500 and 7,500 (b) 4,500; 9,000 and 9,000
(c) 10,500; 7,500 and 4,500 d) 11,250; Nil and 11,250

Question. 26
x, Y and Z are sharing profits in the ratio of 1:1:1. They decided to share profits in the ratio of 2:3:5. On this date
balance sheet of the firm showed a balance of Rs.60,000 in Contingency Reserve.
z Capital Account will be:
(a) No effect because partners cannot distribute Contingency Reserve
(6) Debit by Rs.20,000
(c) Credit by 12,000
(d) Credit by 20,000

Question. 27
Vinod and Yuvraj were partners in a firm sharing profits in 3:2 ratio. From 1st March, 2021 they decided to
change it to 3:1. For this purpose the goodwill of the firm was valued at Rs.1,20,000.
Journal entry for the above transaction will be:
() Yuvraj's Capital A/c Dr 20,000 and Vinod's Capital A/c Cr. 20,000
(6) Yuvraj's Capital A/e Dr 18,000 and Vinod's Capital A/c Cr. 18,000
(c) Vinod's Capital A/c Dr.20,000 and Yuvraj's Capital A/c Cr 20,000
() Vinod's Capital A/c Dr.18,000 and Yuvraj's Capital A/c Cr 18,000

Question. 28

x, Y and Z are sharing profits and losses in the ratio of 5:3:2. They have decided to share future profits in the ratio
of 2:3:5. At the time of reconstitution of partnership firm there
Investment Fluctuation Reserve Rs.4,000 and
was
Short term Investment Rs.20,000 (Market value Rs.19,000). How much amount of reserve is to be
credited to Z?
(a) 1,500 (b) 900 (c) 600 (a) 1,0000
 VINESH Target Ultimat nate ountanc

3.6
Question. 29

profits
in the
ratio of 2:3:
:3:5. On this
share
decided to
They Account.

B and C are sharing profits in the ratio of 1:1:1. and Loss

A in Profit
debit balance of Rs.1,20,00
balance sheet of the firm showed a

40.000
B's Capital Account will be: Debit by
(b)
40.000
(a) Debit by 36.000 Credit by
(d)
() Credit by 36,000
Question. 30

from Ist January

2020 they a.
With effect gr
and losses in the ratio of 3:2. is debite
partners sharing profits HOW m u c h amount
dc at Rs.30,O00.
was valued
to share protits equally. The goodwill of the firm
* Cc
credited to X? Account by Rs.3,00o
Capital
(a) Debit X's Capital Account by Rs.2,000 (b) Debit X's
Credit X's Capital
Account by Rs.3,000
()Credit X's Capital Account by Rs.2,000 (d)
Question. 31

decided to share the future prof

and Mohan sharing profits in the ratio of 5:3:2. They
Ram, shyam partners
are
without affecting
the ratio of 2:3:5 with effect from 1st April, 2021. They
decided to record the following
in

values:
Profit& Loss A/c (Cr).. ... Rs.24,000
Advertisement Suspense A/c .. ....Rs.12,000
What is the impact of the following adjustment on Shyam's Capital Account:

(a) No Effect on Shyam's Capital Account (b) Shyam's Capital Account Debit by Rs.3,60
(c) Shyam's Capital Account Credit by Rs.3,600 (d)Shyam's Capital Account Debit by Rs.12,00

Question. 32

P, Q and R sharing profits in the ratio of 3:2:1. They decided to change their profit sharing ratio to 24
from 1st April 2021. On that date:

Liabilities Amount Assets Amoun

Debtors 60,00

Additional information:
Bad Debts Rs.6,000 were to be written off and a proviSIon of Rs.3,000 was to be made for bad and doubtful deb

What will be the Revaluation Profit/Loss?

(a) Profit Rs.6,000 b) Loss Rs.6,000
(c) Profit Rs.9,000 d) Loss Rs.9,000
 rofit-sharing Ratio Among the
Change in Profi

Existing Partne
tners 3.7
Question. 33
P, Q and R
Snarmg profits in the
ratio of 2:2:1. Thev
from 1st 2021.
April, On that date: decided to change their profit sharing ratio to
1l
Liabilities
Amount Assets Amount
Debtors 2,60,0000
Less: Provision
For Doubtful Debts
Additional information: 20,000 2,40,000
Bad Debts Rs.40,000 were to be
written off. A provision of
What will be the Revaluation 5% on Debtors to be made for bad and doubtful debts.
(a) Profit Rs.40,000
Profit/Loss?
(Loss Rs.31,000 (c) Profit Rs.31,000 (d) Loss Rs.40,000
Question. 34
X, Y and Z are
sharing profits
50%: 30% : and 20%. As
in the ratio of per new agreement
partners 5:9:6. At the time of profit will be shared by the
this change, General Reserve
sheet. They decided not to distribute
it.
Rs.60,000 appears in the balance
X's Capital Account will be:
(a) No effect at all
(c) Debited with Rs.6,000 (b) Debited with Rs.9,000
() Credited with Rs.15,000

MATCH THE FOLLOWINGSS

Question. 35
Match the followings:
A, B and C are partners in afirm sharing Profits and loss in the
and losses in the ratio
ratio of 3:2:1, they decided to share
of 4:3:2 w.e.f. 01.04.2021. Workmen profits
compensation reserve on that date is 90,000
() There is no claim against Workmen Compensation |(a) A=30,000; B=20,000;
Reserve C=10,000
(i) Claim for workmen compensation is estimated at (b) Nil
30,000
(i) Claim for workmen compensation is estimated at
(c) A=45,000; B=30,000; C=15,000
7 84,000

(iv) Claim for workmen compensation is estimated at

(d) A=3,000; B=2,000; C=1,000
90,000
(a) (i)-c; (i)-a; (il)-d; iv)-b (b) ()-b; (ii)-c; (ii)-d; (iv)-a
() )-d; (i)-a; (ii)-c; (iv)b (d) (i)-c; (ii)-a; (iit)-b: (iv)-d
 VINESH Target Uitil GOuntanc
anc
3.8 Question. 36

they
decided to
to share pr
sh.

in the ratio of3:2:3,

Match the followings: loss
u
sharing
Profits and
C in a firm (Dr); c = 1500
A, B and are partners
B = 1000

and losses in the ratio of 2:5:1 w.e.f.

01.04.2021. 1500 (Dr.); =
(a) A
=

(Cr); C
8,000 (Distribute) 3000 (Cr.);B
=2000 3000
() General reserve
(6) A =

(Dr); C =
3000 (L

(i) General reserve 8,000 (Not distribute) A

1000 (Cr.);
B =

2000
off (c) 2000 (Dr); C=0
8,000 (to be
written
B =

3000
(1) Advertisement Suspense F
(d) A =3000 (Dr.);
4,000
(iv) Profit and Loss Account (Dr. Balance) (i)-c; (iüi)-d;
iv)-a
(b) )-b; (iü)-b; (iv)-d
(a) (-c: (ii)-a; (it)-d; (iv)-b (i)-a;
(d) )-c;
) - d : (iñ-a; (ii)-c; (iv)-b
Question. 37

they
decided to share D
Match the followings: ratio of 5:3:2,
Profits and loss in the on that date was 3c
a firm sharing reserve as
A, B and C are partners in Investment
fluctuation
01.04.2021.
2 n d 1osses in the ratio
of 1:1:1 w.e.f.

and the current investment isR 2,00,000 (Cr.); B=3,000 (Cr.);

(a) A-5,000
() No other information is given
C-2,000 (Cr.)
Cost and market value are same)_ B=6,000 (Dr.);
(6) A=10,000 (Dr.);
i) Investment revalued at 7 1,80,000
C=4,000 (Dr.)
(Dr.); B=3,000 (Dr.);
(c)A-5,000
(ii) Investment revalued at 7 1,60,000
C=2,000 (Dr.)
B=9,000 (Cr.);
Investment revalued at T 1,50,000 (d) A=15,000 (Cr.);
(iv) C=6,000 (Cr.)
(b) (i)-b; (ii)-c; (ii)-d; (iv)-a
(a) (-c; G)-a; (iii)-d; (iv)-b (d) ()-c; (i)-a; (ii)-b; (iv)-d
(c) )-d: (ii)-a; (ii)-c; (iv)-b
Question. 38

Match the followings:

to share p=
in a firm sharing Profits and loss in the ratio of 5:3:2, they decided
A, B andC are partners
4:3:3 w.e.f. 01.04.2021.
and losses in the ratio of
Revaluation Profit
=
10,000 (a) A=5,000 (Dr.); B=3,000 (Dr.); C=2,0
()
Revaluation Loss =
10,000 (6) A=10,000 (Dr.); B=6,000 (Dr.); C=4,000
(i)
(ii) Goodwill appeared in the book =
20,000 A=5,000 (Cr.); B=3,000 (Cr.); C=2,0
Goodwill valued
=
20,000 ()A=2,000 (Cr.); B=Nil; C=2,000 (Dr.)
(iv)
(iv)-b (b) )-b; (ii)-c; (iii)-d; (iv)-a
(a) (i)-c; (ii)-a; (ii)-d;
(iv)-b (d) )-c; ()-a; (ii)-b; (iv)-d
(c) )-d; (ii)-a; (ii)-c;
 anae in Profit-sharing Ratio Among the
Existing Partners 3.9

Question. 39
Match the followings:

) Old Ratio New Ratio

(a) Gaining Ratio
(i) New Ratio - old ratio
(b) Nil
(iit) Goodwill appeared in balance
sheet (c) Old ratio
(iv) Workmen compensation reserve
10,000;
Workmen compensation claim 10,000 (d) Sacrificing Ratio
(a) )-c; (i)-a; (iii)-d; (iv)-b
b) ()-b; (i)-c; (ii)-d; (iv)-a
(c)()-d; (ii)-a; (ii)-c; (iv)-b
) )-c: (i)-a; (i)-b; (iv)d

Question. 40
Match the followings

() Stock is overvalued by 7 10,000 (a) Revaluation Profit = 10,000

(it) Stock is
undervalued by 10,000
(b) Revaluation loss = 12,000
(iii) Unrecorded asset 12,000
(c) Revaluation loss = 10,000
(iv) Unrecorded liability =
12,000 (d) Revaluation Profit = 12,000
(a) ()-c; (i)-a; (ii)-d; (iv)-b
(b) )-b; ()-c; (ii)-d; (iv)-a
(c) ()-d; (i)-a; (ii)-c; (iv)-b
(d) )-c; ()-a; (iün-b; (iv)-d

TRUE AND FALSE

Question. 41
When old partners change their profit sharing ratio it is called dissolution or reconstitution of partnership.-
(a) True (b) False

Question. 42
When firm calculates its
a
Goodwill by using Average profit method, Super profit method or Capitalisatio
nethod, it is known as Self-Generated Goodwill.
(a) True (b) False
 3.10 VINESH Target Ultimate Accou.

Questions
cOuntancyN
Assertio & Reason Based

Question. 43
Assertion (A):
Reconstitution of a firm always lead
Reason (R): to change in profit-sharing ia
ne main purpose of Reconstitution. is to Ratio.
Choose the Correct find Sacrificing Ratio or
(a) Assertion Option from the following
and Reason both
are correct and Reason is the correct explanation of assertion
O) ASsertion and Reason both
are correct but Reason is not corrce
(c) Both Assertion and
(d) Only Assèrtion is Reason are not correct
correct
Question. 44
Assertion (A):
Change in profit sharing ratio among the existing partners leads to dissolution of partnership as
agreement comes to an end the existin
and the firm continues under newW agreelul
Reason R):
odarnership will bring change in economic/business relationship among the partners. Busin
Will continue and books of accounts of the firm
Choose the Correct not to be closed.
(a) Assertion and Reason
Option
from the following:
both are correct and Reason is the correct explanation of assertion
() Assertion and Reason
both are correct but Reason is not correct explanation or asseruOn
(c) Both Assertion and Reason are not
correct
(d) Only Assertion is correct

Question. 45
Assertion (A):
At the time of reconstitution of partnership firm, goodwill is
because consideration in
not recognized in the books of accounts of the
fi
money or money's worth is not paid for it.
Reason (R):
Goodwill can be calculated by
using average profit method, super profit method or capitalization method. Ate
that an adjustment entry is passed for
by crediting the sacrificing partner's
goodwill share, by debiting the gainer partner's capital/current account an
capital/current account.
Choose the Correct Option from the following:
(a) Assertion and Reason both are correct and Reason is the correct explanation of assertion
(b) Assertion and Reason both are correct but Reason is not correct explanation of assertion
(c) Both Assertion and Reason are not correct
(d) Only Assertion is correct

ANSWERS
1. (b) Reconstitution of Partnership 5. (a) Old Profit Sharing Ratio
2. (a) Dissolution of partnership firm. 6. (c)
Employees provident fund
3. (d) When Purchased goodwill is written off from 7. 6) Loss on
revaluation
the books 8. (d)
Self-generated goodwill is shown in the
4. (d) All of the above side of Balance Sheet
 Change in
in Pr
Profit-sharing Ratio Among the Existing Partners 3.11
9. (h) Vinod Sacrifice 1/6 and
Ashish Gain 1/6
10. (a) 1:1:1 28. (c) 600
Gain 3/20 29. (b) Debit by 40,000
11. (4) 30. (d) Credit X's Capital Account by Rs.3,000
12. (d) Debited by 60,000
31. (a) No Effect on Shyam's Capital. Account
13 (c) Decrease in the value of an 32. (d) Loss Rs.9,000
in
th debit side of Revaluation Accountasset is recorded
33. (b) Loss Rs.31,000
14. (a) Value offixed assets
15. (c) General Reserve
decreases 34. (d) Credited with Rs. 15,000
35. (a) (i)-c; (ii)-a; (ii)-d; (iv)-b
16. (a) 18,000, 18,000 and 9,000
17. (c) Debited with Rs.32,000 36. (b) (i)-b; (i)-c; (iii)-d; (iv)-a
37. (c) (i)-d; (ii)-a; (ii)-c; (iv)-b
18. (C) Credited with Rs.18,000
38. (d) )-c; (i)-a; (ii)-b; (iv)-d
19. () Debited by Rs. 12,100
39. (c) (1)-d; (i)-a; (ii)-c; (iv)-b
20, (a) GK Dr 8,000; KK Dr
32,000 and AK Cr 40. (a) ()-c; (i)-a; (iii)-d; (iv)-b
40,000 41. (a) True
21. () Avya's Capital A/c. Dr. 10,000 42. (a) True
To Kavya's
Capital A/c. 10,000
22. (b) Credited by Rs. 18,000
43. (d) Only Assertion is correct
44. (a) Assertion and Reason both are correct and
23. (d) Credited by Rs.4,000 Reason is the correct explanation of assertion
24. (c) Credited by Rs.900 45. (b) Assertion and Reason both are correct but
25. (b) 4,500; 9,000 and 9,000 Reason is not correct explanation of assertion
26. (d) Credit by 20,000
Reason: Assertion is pointing out Purchased Goodwill
27. (d) Vinod's Capital A/c Dr.18,000 and whereas Reasoning is pointing out Self-generated
Capital A/c Cr 18,000 Yuvraj's
goodwill.

Case Studies (Case Based & Source Based Questions)

(Competeney Based
Questions: Case Studies, Case Based &Source Based Questions,
Multidisciplinary,
Reasonings Based, (HOTS) Application Based, Evaluation Based & Understanding Based
Questions)
CASE STUDY 1
Parvez, Quadir and Rehman sharing profits
in the ratio of 5:3:2. To bring the equality
among the partners, on 1st
April 2021, they decided share profits equally. For this purpose, goodwill of the firm to be valued at three years
to
purchase of the average of last five years profits. The profits of last five years are as follows:

Year 31st March 31st March 31st March 31st March 31st March
2017 2018 2019 2020 2021
Profit/Loss 60,000 Profit 1,50,000 Profit 1,70,000 Profit 1,90,000 Profit| (70,000) Loss
You are required to answer the following questions
(1) Sacrifice or Gain of Quadir:
a) Sacrifice 5/30 (b) Sacrifice 1/30 (c) Gain 5/30 (d) Gain 1/30
(2) Sacrifice or Gain of Parvez:
(a)Sacrifice5/30 (b) Sacrifice 1/30 (c)Gain 5/30 (d)Gain 1/30
(3) Sacrifice or Gain of Rehman:
(a) Sacrifice 4/30 (b) Sacrifice 3/30 (c) Gain 4/10 (d) Gain 1/30
4) While making adjustment for goodwill, Rehman's Capital Account will be:
(a) Debited by Rs.10,000 (b) Debited by Rs.40,000
(c) Credited by Rs. 10,000 (d) Credited by Rs.40,000
 3.12
VINESH Target Ultimate
Accountancy-Xi
CASE STUDY 2
Three partners who started business few
years back, now making a change in their partnership deed. Raka,
and Mahesh sharing profits and losses in
theratio of 5:3:2. With effect from 1st April, 2021, they
Seem
toshare profits and losses in the ratio of 2:2:1. mutually agreed
On that date, there was a workmen's
thatGoodwill of the firm be valued at
compensation fund of Rs.90,000 in thebooks of the firm. It was
agreed
Rs.70,000. A Claim for workmen's compensation amounted to Rs.40,000.
Profit on revaluation of assets and
re-assessment ofliabilitiesamounted to Rs. 40,000.
You required to answer the following questions:
are

(1) Identify the Partner who is not

Sacrificing OR Gaining:
(a) Raka
(b) Seema
(c) Mahesh
(d) Both Seema and Mahesh
(2) Whose Capital Account will be debited for
adjustment of goodwill:
(a) Raka
(b) Seema
(c) Mahesh
(d)Both Seema and Mahesh
(3) While adjusting for Workmen
Compensation, Mahesh's Capital Account will be:
(a) Credited by Rs.40,000
b) Credited by Rs.25,000
(c) Credited by Rs.15,000
(4) While adjusting the Revaluation () Credited by Rs. 10,000
Gain, Seema's Capital Account will be:
(a) Credited by Rs.20,000
b) Credited by Rs.12,000
(c) Credited by Rs.8,000
(d) Credited by Rs. 15,000

CASE STUDY 3
A, B and C were partners
sharing profits in the ratio of 5: 4:3. Theydecided to change their
to 2:2: l w.e.f.
1st April, 2021. On that date, there was a
profit sharing ratio
balance of Rs.3,00,000
in
General Reserve and a debit balance
of Rs.4,80,000 in the Profit and
You are required to answer the LossAccount.
following questions:
(1) When they want to distribute the General
Reserve, identify the wrong
(a) They cannot distribute General Reserve due to statement
loss.
(b) A's Capital Account will be credited with
Rs.1,25,000
(c) C's Capital Account will be credited with
Rs.75,000
(d)B's Capital Account will be Credited with
Rs.1,00,000
(2) When they do not want to distribute the General
Reserve, identify the wrong statement:
(a) B's Capital
Account will be debited by 20,000
(b) A's Capital Account will be credited with
Rs.5,000
() C's Capital Account will be credited with
Rs.15,000
(d) B's Capital Account will be Credited
with Rs.20,000
CASE STUDY 4
X, Y and Zare equal
partners. On 1"April, 2021
the time of reconstitution. On that date there they
decided to change their profit
1/6 at
was a balance of General Reserve
sharing ratio. Gain of Y was
Partners decided not to distribute the General Reserve in the Balance of the firm.
but an adjustment entry was for passed the same:
Changein profit-sharing Ratio Among the Existing Partners 3.13

Capital
A/c Dr. 3,000
y's
To
X's Capital A/c 1,500
To Z's
Capital A/c
1,500
required
to answer the
following questions:
New Profit Sharing Ratio:
(a) 1:2:1
(b) 2:2:1 (c) 1:1:1
(d) 1:2:2
2) Total amount of neral Reserve was:
(a) 15,000
(b) 16,00 () 17,000 (d) 18,000

Case Study 1
ANSWERS
(1) () Gain 1/30 (2) (a) Sacrifice 5/30 (3) (c) Gain 4/10
(4) (b) Debited by Rs.40,000
Case Studyy2
(1) () Mahesh (2) (b) Seema (3) (d) Credited by Rs. 10,000
(4) () Credited by R$.8,000
Case Study 3
(1) (a) They cannot distribute General Reserve due to loss.
(2) (d) B's Capital Account will be Credited with Rs.20,000
Case Study 4
(1) () 1:2:1
(2) () 18,000