XAVIER HIGHER SECONDARY SCHOOL

STD: 12 FIRST TERM

MARKS:100
SUBJECT: ACCOUNTS DURATION:3 HRS
SECTION – A Select the appropriate alternative for each question: (1 mark each) (10)
(1) Goodwill is __________ where individual skill is important.
(a) more (b) less (c) zero (d) negative
(2) Revaluation account is also known as ________________
(a) Capital reserve account (b) Profit – loss appropriation account
(c) Profit-loss account (d) Profit-loss adjustment account
(3) When only old profit-loss sharing ratio is given, sacrificing ratio of partners = _________
(a) equal (b) new ratio
(c) old ratio (d) cannot be calculated
(4) In which ratio, profit or loss of revaluation account is distributed between the partners?
(a) sacrifice ratio (b) new profit-loss ratio
(c) old profit-loss ratio (d) gain ratio
(5) What is interest on loan of partner for partner?
(a) Expenses (b) Income (c) Assets (d) Receivable
(6) What is interest on debit balance of current account of partner for firm?
(a) Receivable (b) Reserve (c) Assets (d) Liabilities
(7) Amount realized from the sale of assets at the time of dissolution, will be given first to the____________
(a) Partners’ wife loan (b) Partners’ loan (c) Third party debts (d) Dissolution expense
(8) To which account credit balance of general reserve, Workman compensation fund, credit balance of profit-
loss account is transferred at the time of the dissolution of a firm?
(a) Realisation A/c (b) Cash A/c (c) Partners’ capital A/c (d) Partners’ loan A/c
(9) Credit balance of profit and loss appropriation account means…..
(a) Gross loss (b) Divisible loss (c) Divisible profit (d) Gross profit
(10) Goodwill depends on which aspect?
(a) On employee of business enterprise (b) On management of business enterprise
(c) On assets of business enterprise (d) On future maintainable profit
SECTION – B Answer the following question: (1 mark each) (10)
(9) What is super profit?
(10) What is sacrifice ratio? How is it calculated?
(11) Write the name of method to keep Capital Account in Partnership.
(12) Write journal of closing of Drawings account at the end of the year?
(13) Which type of asset is ‘goodwill’?
(14) What is reconstruction of partnership firm?
(15) Which is the other name known for the revaluation account?
(16) At which value assets – liabilities are shown in the balance sheet after revaluation?
(17) Why a new partner is required to give his share in goodwill?
(18) How is a new partner admitted in a firm?
(19) Who has to bear dissolution expense, at the time of dissolution of a firm?
(20) What is voluntary dissolution?
SECTION – C Answer the question in brief: (3 marks each) (33)
(21) What is meant by goodwill? Explain the factor affecting valuation of goodwill.
[OR] By using the appropriate average, determine the value of goodwill on the basis of three years purchase.

Year Profit (₹.)

2014 – 15 75,000
2015 – 16 60,000
2016 – 17 35,000
2017 – 18 20,000

(22) Sun, Moon and Star are partners in the firm sharing the profit and loss in the ratio 4:4:3. All the partners
have decided to share profit and loss in the new ratio of 3:3:1. From the given information, find the gain ratio.
(23) Sita and Gita are the partners of a partnership firm. Profit-loss sharing ratio among them is 2:1. As on 31-
3-2021, the following are the balances in the books of firm.
Profit-loss account (Debit balance) ₹. 18,000
Reserve fund ₹. 27,000
Workers’ profit-sharing fund ₹.33,000
 On the above date, Sita and Gita decided to change their profit-loss sharing ratio to 1:1. Pass journal entries
showing distribution of accumulated profit-loss in the books of firm.
(24) Pass journal entries in the case of firms’ dissolution:
(a) There is no goodwill in the books of a firm. But at the time of dissolution Rs. 35,000 realised for it.
(b) Income tax liability of the partnership firm is determined for Rs. 25,000. It is not recorded in the
books.
(c) Partner Vicky accepts to pay Rs. 30,000 for bills payable.
(25) How would you deal with the following balances disclosed in the balance sheet at the time of the
dissolution of a partnership firm.
Investment fluctuation fund
Debit balance of profit and loss A/c
Provident fund
(26) Mohit & Suraj are partners of one firm. Ratio of their capital is 5:4. Mohit gets Rs. 3,000 as monthly salary
and commission after deducting commission from net profit at 6%. If the firm gets profit of Rs. 1, 42,000 at the
end of the year than what is received by Mohit.
(27) Pankaj, Hardik, Akshit are partner sharing profit & loss equally. Their total capital is Rs. 4, 00,000. The
ratio of their capitals is 2:3:5. Firm allows interest at 6% p.a. on capitals. Pankaj has received Rs. 1, 24,800
including the interest on capital, what will be the amount received by partner Akshit including interest on
capital.
(28) Write short note on Partnership Deed.
(29) Ram, Laxman and Bharat are partners, sharing profits and losses in the ratio of 4:3:3. All the partners
have decided to share profits and losses in the new ratio of 3:2:1. From the above information, find out
Sacrificing ratio.
(30) Pass journal entries in the case of firms’ dissolution:
(a) A partner has accepted to pay loan of his smt. Rs. 40,000, which was given to the firm.
(b) A partner Vijay has accepted responsibility for dissolution procedure of the firm. A firm has decided
to pay remuneration of Rs. 12,000 for this task. A firm has paid him Rs. 6,000 for expense.
(c) On due payment of Rs. 35,000, unrecorded furniture of Rs. 20,000 given to Mahesh. The remaining
amount is paid in cash.
(31) In which circumstances court can pass the order for dissolution of a firm?
SECTION –D Answer the question in brief: (4 marks each) (12)
(32) determined the value of goodwill of Pankaj and Kaushal’s firm on the basis of capitalised super profit
method.
Capital Employed ₹9,00,000
Expected Rate of return 12%
Last five year’s profit
YEAR PROFIT
(33) Total assets of firm of 2016 – 17 1,00,000 Vinod and Ritesh is ₹ 6,00,000. In which cash is
included of ₹ 40,000. Net 2017 – 18 1,40,000 assets of the firm are ₹ 4,00,000. The proportion of
capital and general reserve 2018 – 19 1,30,000 is 4:1. The capital of Vinod is excess of capital of
Ritesh by ₹ 80,000. The 2019 – 20 1,50,000 realisation account loss is ₹ 80,000. Firm is dissolved.
Prepare dissolution account. 2020 – 21 1,80,000
(34) Determine the value of goodwill on the basis of 4 years purchase of last five
years average profit of Kantilal, Maniklal and Rasiklal’s firm from the given information: [ use appropriate
average]

Year Profit
2016 – 17 90,000
2017 – 18 1,10,000
2018 – 19 1,20,000
2019 – 20 1,30,000
2020 – 21 1,40,000

SECTION – E Answer in detail: (8 mark each) (24)

(35) Sachin and Saurav are partners sharing profit – loss in the ratio of 2:3. The balance sheet of their firm as
on 31-3-2021 was as under:
They admitted Rahul as a new partner on 1-4-2021 on following conditions:
(1) Sachin sacrificed ½ of his share and Saurav sacrificed ¼ of his share in favour of Rahul.
(2) Rahul will bring Rs. 1,20,000 as capital and his share of goodwill in cash. Sachin and Saurav will withdraw
50% of their share of goodwill.
(3) Provide depreciation on machinery @ 10%.
(4) Liability for workmen compensation is accepted at Rs.50,000.
(5) Market value of investments is Rs. 15,000.
(6) 10 % of creditors are not to be paid.
(7) Bad debt of Rs. 6000 is to be written off and provision for bad debt reserve is to be kept at 15% on debtors.
(8) Goodwill of the firm is valued at Rs. 80,000.
Prepare necessary account and the balance sheet.
Balance sheet
Liabilities Amt. Assets Amt.
Capital: Bank 14,000
Sachin 80,000 Investment 30,000
Saurav 1,00,000 1,80,000 Stock 30,000
Contingency reserve 15,000 Debtors 66,000
Investment reserve 12000 Machinery 50,000
Workmen compensation fund 40,000 Building 1,10,000
Creditors 50,000
Bad debt reserve 3,000
3,00,000 3,00,000
[OR] A and B are partners sharing profit – loss in the ratio of 2:1. The balance sheet of their firm as on 31 – 3
– 2016 was as under:
Balance sheet
Liabilities Amt. Assets Amt.
Capital: Plant – Machinery 80,000
A 80,000 Building 50,000
B 40,000 1,20,000 Stock 17,000
Reserve fund 21,000 Debtors 50,000
Creditors 75,000 -Bad debt reserve 4,000 46,000
Bills payable 10,000 Cash – Bank 33,000

2,26,000 2,26,000
They admitted C as a new partner on 1 – 4 – 2016 on following conditions:
1) A sacrificed 1/12th share and B sacrificed 1/6th share from their profit share in favour of C.
2) C will bring proportionate capital.
3) C will bring his share of goodwill in cash. Goodwill is valued at Rs. 1,80,000.
4) Fixed assets are to be depreciated at 10%.
5) All debtors are solvent.
6) Insurance premium of Rs. 3000 is to be carried forward to the next year.
Prepare necessary account and the balance sheet

(36) Chingu, Mingu and Thingu are partners sharing profit-loss equally. The balance sheet of their firm as on
31-3-2021 was as under:
Balance sheet
Liabilities Amt. Assets Amt.
Capital: Cash-Bank 1500
Chingu 9000 X Ltd.’s share 1500
Mingu 6000 Debtors 3,000
Thingu 6000 21,000 -Bad debt reserve 240 2760
General reserve 1200 Land – Building 10,000
Investment fluctuation fund 360 Stock 3,000
Creditors 46,00 Profit-loss A/c 3,000
Trademark 5400
27,160 27,160

Thingu retires on 31-3-2021 on the following terms:

(1) Goodwill of the firm is valued at Rs. 6000.
(2) Value of land-building Rs.15,000.
(3) Market value of X Ltd.’s share is Rs. 1200.
(4) All debtors are good.
(5) A provision of Rs. 2,000 for outstanding salary is to be made.
(6) Share of Thingu is gained by Chingu.
(7) Amount due to Thingu is to be paid in cash which is brought in by Chingu and Mingu in such a way as to
make their capitals in proportionate to their new profit-loss ratio.
Prepare necessary accounts and balance sheet after retirement.
(37) E, F and G are the partners sharing profit and loss in the ratio of 4:3:3. Balance sheet of their firm on 31-
3-2021 was as under:
Balance sheet
 Liabilities Amt. Assets Amt.
Capital: Goodwill 1000
L 8,000 Land-building 6,000
B 5,000 Furniture 4000
W 2,000 15000 Stock 6600
General reserve 2000 Debtors 9000
Creditors 8,000 Cash 400
Bills payable 2000
27,000 27,000
E retires on 31-3-2021. Following terms of retirement were decided in partnership agreement and among the
partners:
1) Value of goodwill is Rs. 4000.
2) Value of fixed assets is to be appreciated by 20%
3) Stock is found overvalued by 10%.
4) New profit-loss sharing ratio of F and G is decided at 4:1.
5) Amount due to E is to be paid in cash and cash balance of Rs. 1000 in the new firm is to be maintained. For
this purpose F and G brought cash in such a way as to make their capitals proportionate to their new profit
sharing ratio.
Prepare necessary accounts and balance sheet after retirement.
SECTION – E [11]
Dev and Veda had started partnership firm on 1-4-2020. Partners are entitled for 5% interest on capital. 10 %
commission is payable to Veda on profit, after deduction of commission from the profit. Partners sharing profit-
loss in the proportion of 3:2. There are several mistakes in the Trading Account and Profit-loss Account
prepared by an unexperienced accountant. You are asked to prepare revised annual accounts from the given
trading account, profit-loss account and list of assets and liabilities and other information.
Dr. Trading account and Profit And Loss account as on 31 – 3 – 2021 Cr.

The position of assets and liabilities as on 31 – 3 – 2021 was as follows:

Assets: stock ₹ 50,000, Debtors ₹ 1,00,000, Furniture ₹ 20,000, building ₹50,000 , Cash on hand ₹ 6000,
Bank balance ₹ 24,000.
Liabilities: Creditors ₹ 40,000, Bills payable ₹ 14,000, Capital of Dev ₹1,00,000, Capital of Veda ₹ 30,000
Adjustments:
Write off bad debts of ₹ 2800.
Provide 2% discount reserve on debtors.
Maintain bad debts reserve of ₹ 7200.
Provide 5% depreciation on furniture and building.