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PSA-BLOCK PAPER-1
Maximum Marks: 80 MARKS Passing Marks: 60 MARKS Time Allowed: 3.0 Hrs.
General Instructions:
1. Try and attempt questions in order of your proficiency to facilitate better time and confidence management.
2. All The Questions Have Been Thoroughly Checked for Accuracy & Relevance of Curriculum; However If By Any Chance
Printing or Descriptive Mistake Is Found Full Marks For That Question Will Be Given If Attempted Partially Or Wholly.
3. While Attempting Students Are Expected To Stick To Time Schedule As Mentioned And Carry Out The Test In A Similar
Fashion As Required To Be Done At School/Board.

Q.01 Mahi, Kavita and Sonia were partners sharing profits and losses in the ratio of 4:2:1 respectively. Surbhi was admitted for 1/7th
share in the business. Sonia retired from the firm on the same date. Mahi and Kavita decided to share future profits in the ratio
of 5:1. Calculate new profit-sharing ratio. (1)

Q.02 State any two reasons for the preparation of "Revaluation Account' on the admission of a partner. (1)

Q.03 If a fixed amount is withdrawn at the beginning of each quarter for full accounting year, for what period will the interest on
total amount withdrawn be calculated? (1)

Q.04 What is meant by unlimited liability of a partner? (1)

Q.05 Amar, Raj and Harsh were partners sharing profits in the ratio of 4:5:6. Raj retires from the firm and his capital balance after all
adjustments regarding Reserves and Revaluation was ₹77,500. It was agreed between Amar and Harsh to pay ^ 97,500 to Raj in
final settlement. On the same date Pawan was admitted for 1 /5th share. Ascertain the amount of goodwill premium brought by
Pawan. (1)

Q.06 State the need of treatment of goodwill on the admission of a new partner. (1)

Q.07 Anil and Malik are partners in a firm without any partnership agreement. Anil contributed ₹50,000 and Malik ₹65,000 as capital.
Anil has advanced a loan of ₹25,000 and claims interest @ 9% p.a. to which Malik disagreed. Anil decided to file a suit against
the firm for his claim. State whether Anish claims is valid or not. Give reason. (1)

Q.08 A, B and C decided that interest on capital will be provided to each partner @5% p.a. But after one year C wants that no
interest on capital is to be provided to any partner. State how ‘C’ can do this? (1)

Q.09 On 1st April 2014 Anjeev and Sahil became partners for supplying school uniforms to girls’ school situated in the rural areas of
Bengal. They contributed capitals of ₹5,00,000 and ₹7,00,000 respectively and agreed to share profits in the ratio of 7:3. The
partnership deed provided that interest on capital shall be allowed at 10% per annum.
Anjeev is entitled to a commission of 10% of the net profit which is after deducting interest on capital and after charging his
commission. During the year the firm earned a profit of ₹2,30,000.
Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2015. (3)

Q.10 Sony, Raja and Anu are partners in a firm sharing profits in the ratio of 2:1:1 respectively. Firm closes its accounts on 31st March
every year. Raja died on 30th September, 2015. There was a balance of ₹2,35,000 in Raja’s Capital Account in the beginning of
the year. In the event of death of any partner, the partnership deed provides for the following:
(i) Interest on capital will be calculated at the rate of 6% p.a. (4)
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(ii) The deceased partner’s shall be paid ₹24,000 for his share of goodwill.
(iii) The deceased partner’s share of General Reserve which is ₹12,000.
(iv) The deceased partner’s share of profit till the date of death will be calculated on the basis of sales.
Sales during the year 2014-15 were ₹8,00,000 and sales from 1st April, 2014 to 30th September, 2015 were ₹2,40,000.
The profit of the firm for the year ending 31st March, 2015 was ₹4,00,000.
Prepare Raja's Capital Account to be presented to his executors.

Q.11 Arif, Bishan and Shobhit are partners in a firm sharing profit in ratio 7:2:1. They decided to share profits equally in future. On
that date, they had ₹2,16,000 in Profit & Loss A/c and ₹84,000 in General Reserve. Pass journal entry if firm does not want to
close the account of Profits and Reserve. (3)

Q.12 A, B and C were partners sharing profits in the ratio of 9:6:3. On 1.4.2015 with the consent of all partners, D was admitted for
l/4th share in profits, on 1.4.2015. D was blind by birth but highly qualified and intelligent. They decided to admit him
contributing very small amount for capital and nothing for premium for goodwill. After one month, they admitted E as a partner
for 25 paise in a rupee who brought ₹1,00,000 as capital.
Journalise the above transactions and calculate new profit-sharing ratio and sacrificing ratio of partners. (4)

Q.13 Maya and Ekta are partners engaged in manufacturing low-cost paper bags and were also spreading environmental awareness
among people by distributing handout's at their outlet in which all information regarding environmental protection was printed.
They contributed ₹6,00,000 and ₹11,00,000 as capitals respectively and sharing profits in the ratio of 7:3. The partnership deed
provided that interest on capital @ 5% p.a. shall be allowed. They also decided that 1/10th of the divisible profit will be
transferred to General Reserve. The profit during the year 2014-15 was ₹6,00,000.
Prepare profit & Loss Appropriation Account for the year ended 31st March 2015. (3)

Q.14 Avi, Karan and Manav were partners in a firm sharing profits in 2:2:1 ratio. The partnership deed provided that on the death of a
partner, his executors will be entitled for the following:
(i) Interest on capital @ 12% p.a.
(ii) Salary of ₹12,000 p.a.
(iii) Share in the profit of the firm upto the date of death on the basis of previous year’s profit.
(iv) Avi had taken a loan of ₹10,000 from the firm which is to be adjusted from his capital account.
Avi died on 31.05.2015. His capital was ₹1,25,400. He had withdrawn ₹15,000 and interest on his drawings was calculated as
₹1,200. The profit of the firm for the previous year ended 31.03.2016 was ₹30,000.
Prepare Avi's capital account to be presented to his executors. (4)

Q.15 Savita, Rani and Kareena were partners in a firm sharing profits and losses in the ratio of 1:2:1. The firm was engaged in the
storage and distribution of vegetables and its godowns were located at Remote Areas. Each warehouse was being managed
individually by Savita, Rani and Kareena. Because of increase in demand at the godowns managed by Savita, she had to devote
more time. Savita demanded that her share in the profits of the firm be increased, to which other partners agreed. The new
profit-sharing ratio was agreed to be 2:1:1. For this purpose the goodwill of the firm was valued at 3 years purchase of the
average profits of last four years. The profits of the last five years were as follows:
Years Profit (₹)
I 40,00,000
II 35,00,000
III 27,50,000
IV 4,50,000
You are required to:
(i) Calculate the goodwill of the firm. (3)
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(ii) Pass necessary Journal Entry for the treatment of goodwill on change in profit sharing ratio of Savita, Rani and Kareena.

Q.16 Neera, Geeta, Lila were partners sharing profits in the ratio of 2:3:5. Geeta retires on 1.1.2011. For the purpose of settlement of
her dues, her Capital Account shows a balance of ₹3,00,000 after the necessary adjustments. She was paid ₹1,00,000
immediately on the date of retirement and the balance was transferred to her loan account. The balance due to her is to be paid
in four equal instalments together with interest @ 10% per annum. Books are closed on 31st December every year. Pass necessary
journal entries for the above transactions till the loan is finally paid off. (4)

Q.17 Following is the Balance Sheet of Priya and Sunita, who share profits and losses in the ratio of 4:1 as at 31st March, 2015:
BALANCE SHEET
as at 31.03.2015
Liabilities (₹) Assets (₹)
Sundry Creditors 13,000 Bank 35,000
Bank Overdraft 6,000 Debtors 17,000
Priya’s Sister's Loan 8,000 Less: Provision for bad debts 2,0000 15,000
Sunita's Loan 3,000 Stock 15,000
Reserve for Repairs and Renewals 13,000 Investments 25,000
Capital A/cs: Machinery 25,000
Priya 50,000 Goodwill 10,000
Sunita 40,000 Profit and Loss A/c 10,000
1,35,000 1,35,000
The firm was dissolved on the above date and the following arrangements were decided upon:
(i) Priya agreed to pay her sister’s Loan
(ii) Debtors of ₹5,000 proved insolvent and nothing realised from them.
(iii) Other assets realised - Investments 50% less; and Goodwill at 60%.
(iv) One of the creditors for ₹5,000 was paid only ₹3,000 in final settlement.
(v) Machinery sold at 20% Profit on Book value.
(vi) Sunita took over of Stock at ₹4,000 (being 20% less than the book value). Balance stock realised 50%.
(vii) Realisation expenses amounted to ₹2,000 paid by Priya.
Prepare Realisation Account. (6)

Q.18 Veer and Jeevan were partners whose firm was dissolved on 31st March 2015. Fill in the blank spaces in the following ledger
accounts:
Dr. REALISATION ACCOUNT Cr.
Particulars (₹) Particulars (₹)
To Plant A/c 1,32,000 By Provision on for doubtful debts A/c 4,400
To Vehicles A/c 33,660 By Creditors A/c 88,000
To Patents A/c 4,400 By Veer's Brother Loan A/c 44,000
To Accrued Income A/c 37,400 By Reserve for Depredation A/c 8,800
To Trade Receivables Ale 41,140 By Bank Ale (Accrued Income) 26,400
To Veer's Capital Ale 44,000 By Jeevan's Capital A/c (Vehicles) 29,700
(Veer’s Brother Loan) By Bank A/c (Plant) 1,67,200
To Bank A/c (Creditors) — By Bank A/c (Trade Receivables) —
To Bank A/c (Expenses) —
To Profit transferred to:
Veer's Capital A/c —
Jeevan's Capital A/c — —
— —
Dr. PARTNERS’ CAPITAL ACCOUNTS Cr. (6)
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Particulars Veer Jeevan Particulars Veer Jeevan
(₹) (₹) (₹) (₹)
To Advertisement Suspense A/c 5,280 3,520 By — —
To Realisation A/c (Vehicles) 13,500 By General Reserve A/c 2,640 1,760
To Bank A/c 1,03,840 24,200 By Realisation A/c (Veer's Brothers Loan) —
By______ — —
— — — —
Dr. BANK ACCOUNT Cr.
Particulars (₹) Particulars (₹)
To Balance b/d 6,600 By Realisation A/c (Creditors) 79,200
To Realisation A/c (Accrued Income) 26,400 By Realisation A/c (Expenses) 5,500
To Realisation A/c (Plant) 1,67,200 By______ —
To Realisation A/c (Trade Receivables) — By______ —
By Jeevan's Loan a/c 27,060
2,39,800 2,39,800

Q.19 Charu and Rohit were partners in a firm sharing profits in 5:3 ratio. They admitted Bhoomi as a new partner for l/3rd share in
the profits. Bhoomi was to contribute ₹20,000 as her capital. The Balance Sheet of Charu and Rohit on 1.4.2015, on the date of
Bhoomi’s admission was as follows:
BALANCE-SHEET
as at 1st April 2015
Liabilities (₹) Assets (₹)
Creditors 36,000 Vehicles 25,000
Capitals: Furniture 30,000
Cham: 49,000 Computers 15,000
Rohit: 35,000 84,000 Debtors 20,000
Profit & Loss A/c 8,000 Less: Provision for bad debts 1,500 18,500
Bank 39,500
1,28,000 1,28,000
Other terms agreed upon were:
(i) Goodwill of the firm was valued at ₹12,000.
(ii) Vehicles were found undervalued by ₹10,000 and furniture was found over valued by ₹5,000.
(iii) The provision for doubtful debts was found to be in excess by ₹400.
(iv) Creditors ₹1,000 are not traceable.
(v) The capitals of the partners be adjusted on the basis of Bhoomi's contribution of capital in the firm.
(vi) Surplus if any will be transferred to current account and deficiency will be brought through cheque.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new firm. (8)

Q.20 Pawan, Kirti and Naman were partners in a firm sharing profits in the ratio of 2:1:1. On 1st April, 2015 their Balance Sheet was as
follows:
BALANCE SHEET
as at 1st April, 2015
Liabilities (₹) Assets (₹)
Capitals: Computers 2,00,000
Pawan: 1,75,000 Plant 1,50,000
Kirti: 1,29,875 Machinery 60,000
Naman: 85,000 3,89,875 Debtors 1,00,000
Profit & Loss Ale 1,10,000 Less: Provision for bad debts 5,0000 95,000
Workmen’s Compensation Fund 90,000 Stock 1,10,125 (8)
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Naman's Loan 60,450 Cash 35,200
6,50,325 6,50,325
On the above date Naman retired.
The following were agreed upon:
(i) Goodwill of the firm was valued at ₹1,50,000.
(ii) Computers were to be appreciated by 40% and Plant was to be depreciated upto ₹1,25,000.
(iii) Machinery was to be depreciated by ₹7,500.
(iv) The liabilities for Workmen's Compensation Fund were estimated at ₹40,000.
(v) Naman's loan was adjusted in his capital account.
(vi) Capitals of Pawan and Kirti were to be adjusted in their new profit-sharing ratio by bringing in or paying cash to the
partners.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the new firm.

Q.21 Veena and Kriti were partners in a firm sharing profits in the ratio of 3:2. On 1.4.2015 their Balance Sheet was as follows:
BALANCE SHEET
as at 1.4.2015
Liabilities (₹) Assets (₹)
Trade Payables 4,74,000 Cash at Bank 15,000
General Reserve 50,000 Debtors 25,000
Workmen Compensation Fund 9,000 Investments 20,000
Investment Fluctuation Fund 2,000 Plant 1,50,000
Provision for bad debts 1000 Land and Building 3,90,000
Capitals:
Veena 40,000
Kriti 20,000 60,000
6,00,000 6,00,000
On the above date Neena was admitted for 1/4th share in the profits of the firm on the following terms:
(i) Neena will bring ₹25,000 for her capital and ₹5,000 for her share of goodwill premium out of her share ₹8,000.
(ii) All debtors were considered good.
(iii) The market value of investments was ₹15,000.
(iv) There was a liability of ₹5,000 for workmen compensation.
(v) Capital accounts of Veena and Kriti are to be adjusted on the basis of Neena's capital by opening current accounts.
Prepare Revaluation Account and Partners’ Capital Accounts. (8)

Q.22 Tulika, Ruchi and Saloni were partners in a firm sharing profits in the proportion and 1/6 respectively. Saloni retired on 1.4.2015.
The Balance Sheet of the firm on the date of Saloni's retirement was as follows:
BALANCE SHEET
as at 1.4.2015
Liabilities (₹) Assets (₹)
Sundry Creditors 16,000 Cash in Hand 9,600
Provident Fund 3,000 Debtors 35,000
General Reserve 15,600 Less: Provision for bad debts 1,0000 34,000
Capitals: Stock 25,000
Tuiika 40,000 Investments 10,000
Ruchi 37,000 Patents 5,000
Saloni 20,000 97,000 Machinery 48,000
1,31,600 1,31,600
It was agreed that: (8)
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(i) Goodwill of the firm will be valued at ₹30,000.
(ii) Depreciation of 10% was to be provided on machinery.
(iii) Patents were to be reduced by 20%.
(iv) Liability on account of provident Fund was brought down to ₹2,400.
(v) Saloni took over investments for ₹12,500.
(vi) Tulika and Ruchi decided to adjust their capitals in proportion of their profit-sharing ratio by opening current accounts.
Prepare Revaluation Account and Partners' Capital Accounts on Saloni’s retirement.

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