2018 Asha and Aditi are partners in a firm sharing profits and losses in the ratio of 3:2.

2. They admit Raghav as a 4

partner for 14th share in the profits of the firm. Raghav brings ₹ 6,00,000 as his capital and his share of goodwill
in cash. Goodwill of the firm is to be valued at two years’ purchase of average profits of the last four years.
The profits of the firm during the last four years are given below :
Year Profit (₹)
2013 – 14 3,50,000
2014 – 15 4,75,000
2015 – 16 6,70,000
2016 – 17 7,45,000
The following additional information is given :

i. To cover management cost an annual charge of ₹ 56,250 should be made for the purpose of valuation of
goodwill.
ii. The closing stock for the year ended 31.3.2017 was overvalued by
₹ 15,000.
Pass necessary journal entries on Raghav’s admission showing the working notes clearly.

2018 Banwari, Girdhari and Murari are partners in a firm sharing profits and losses in the ratio of 4 : 5 : 6. On
31st March, 2014, Girdhari retired. On that date the capitals of Banwari, Girdhari and Murari before the
necessary adjustments stood at ₹ 2,00,000, ₹ 1,00,000 and ₹ 50,000 respectively. On Girdhari’s retirement,
goodwill of the firm was valued at ₹ 1,14,000. Revaluation of assets and re-assessment of liabilities resulted in a
profit of ₹ 6,000. General Reserve stood in the books of the firm at ₹ 30,000.
The amount payable to Girdhari was transferred to his loan account. Banwari and Murari agreed to pay
Girdhari two yearly instalments of ₹ 75,000 each including interest @ 10% p.a. on the outstanding balance
during the first two years and the balance including interest in the third year. The firm closes its books on 31st
March every year.
Prepare Girdhari’s loan account till it is finally paid showing the working notes clearly. (4)
2020 Prem, Kumar and Aarti were partners sharing profits in the ratio of 5 : 3 : 2. Their Balance Sheet as at 31st March, 2019
was as under:

Balance Sheet of Prem, Kumar and Aarti as at 31st March, 2019

 Amount Amount
Liabilities Assets
₹ ₹
Capitals:   Building 1,50,000
Prem 30000   Plant and Machinery 15,000
Kumar 20000   Investments 10,000
Aarti 20000 70,000Debtors 10,000
General Reserve 8,000Stock 5,000
Investment
2,000Cash 25,000
Fluctuation Reserve
Sundry Creditors 10,000   
  90,000  90,000
On the above date, Kumar retired. The terms of retirement were:

i. Kumar sold his share of goodwill to Prem for ₹ 8,000 and to Aarti for ₹ 4,000
ii. Stock was found to be undervalued by ₹ 1,000 and building by ₹ 7,000
iii. Investments were sold for ₹ 11,000.
iv. There was an unrecorded creditor of ₹ 7,000.
v. An amount of ₹ 30,000 was paid to Kumar in cash which was contributed by Prem and Aarti in the ratio of 2: 1.
The balance amount of Kumar was settled by accepting a Bill of Exchange in favour of Kumar.

Prepare the Revaluation Account, Capital Accounts of partners and the Balance Sheet of the reconstituted firm.
Badal and Bijli were partners in a firm sharing profits in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2019
was as follows:

Balance Sheet of Badal and Bijli as at 31st March, 2019

Amount Amount
Liabilities   Assets
₹ ₹
Capitals:   Building 1,50,000
 
Badal 1,50,000   Investments 73,000
Bijli 90,000 2,40,000 Stock 43,000
Badal’s Current A/c   12,000 Debtors 20,000
Investment Fluctuation Reserve    24,000 Cash 22,000
Bills Payable   8,000 Bijli’s Current A/c 2,000
Creditors   26,000    
    3,10,000   3,10,000
Raina was admitted on the above date as a new partner for 16th share in
the profits of the firm. The terms of the agreement were as follows:

i. Raina will bring ₹ 40,000 as her capital and capitals of Badal and Bijli will be adjusted on the basis of Raina's
capital by opening current accounts.
ii. Raina will bring her share of goodwill premium for ₹ 12,000 in cash.
iii. The building was overvalued by ₹ 15,000 and stock by ₹ 3,000.
iv. A provision of 10 % was to be created on debtors for bad debts.

Prepare the Revaluation Account and Current and Capital Accounts of Badal, Bijli and Raina.
1. A, B and C were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. C retired and his capital
balance after adjustments regarding reserves, accumulated profits/losses and his share of gain on revaluation was
₹ 2,50,000. C was paid ₹ 3,22,000 including his share of goodwill. The amount credited to C’s capital account,
on his retirement, for goodwill will be:
A. ₹ 72,000
B. ₹ 7,200
C. ₹ 24,000
D. ₹ 36,000
2. Rahul, Sahil and Jatin were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. Rahul died on
15th October, 2017. At that time, the capitals of Sahil and Jatin after all the adjustments were ₹ 3,56,000 and ₹
2,44,000 respectively. Sahil and Jatin decided to adjust their capital according to their new profit sharing ratio by
opening current accounts. Calculate the new capitals of Sahil and Jatin.

Ashish and Nimish were partners in a firm sharing profits and losses in
the ratio of 3 : 2. On 31st March, 2019 their Balance Sheet was as follows:
Balance Sheet of Ashish and Nimish as at 31st March, 2019
Amount
Liabilities   Assets   Amount ₹
₹
Capitals :   Plant and Machinery   2,90,000
  6,00,000
Ashish 3,10,000   Furniture   2,20,000
Nimish 2,90,000   Debtors 90,000  
Less provision for
General Reserve   50,000 1,000 89,000
doubtful debts
Workmen's 1,40,000
  20,000 Stock  
Compensation Fund  
Creditors   1,10,000 Cash   41,000
    7,80,000     7,80,000
On 1st April, 2019, Geeta was admitted into the partnership for 14th share in the profits on the following terms:

i. Goodwill of the firm was valued at ₹ 2,00,000.

ii. Geeta brought ₹ 3,00,000 as her capital and her share of goodwill premium in cash.
iii. Bad debts amounted to ₹ 2,000. Create a provision for doubtful debts @ 5 % on debtors.
iv. Furniture was found undervalued by ₹ 65,400 .
v. Stock was taken over by Nimish for ₹ 1,30,000.
vi. The liability against workmen's compensation fund was determined at ₹ 30,000.
vii. After the above adjustments, the capitals of Ashish and Nimish were to be adjusted taking Geeta's capital as the
base. Excess or shortage was to be adjusted by opening current accounts.
Prepare Revaluation Account, Partners’ Capital Accounts and the
Balance Sheet of the firm after Geeta’s admission.
Radha, Manas and Arnav were partners in a firm sharing profits and losses in the ratio of 3 : 1 : 1. Their Balance
Sheet as at 31st March, 2019 was as follows:
Balance Sheet of Radha, Manas and Arnav as at 31st March, 2019

Amount Amount
Liabilities   Assets  
₹ ₹
Capitals:     FurnituRe   4,60,000
Radha 4,00,000   Investments   2,00,000
Manas 3,00,000   Stock   2,40,000
Arnav 2,00,000 9,00,000 Debtors 2,20,000  
Investment Less provision for
  1,10,000 10,000 2,10,000
Fluctuation Fund doubtful debts
 Creditors   2,50,000 Cash   1,50,000
    12,60,000     12,60,000
viii. Manas retired on 1st April, 2019. It was agreed that:
i. Stock was to be appreciated by 20 %
ii. Provision for doubtful debts was to be increased to ₹ 15,000.
iii. Value of furniture was to be reduced by ₹ 3,000.
iv. Market value of investments was ₹ 1,90,000.
v. Goodwill of the firm was valued at ₹ 2,00,000 and Manas's share was adjusted in the accounts of Radha
and Arnav.
vi. Manas was paid ₹ 68,000 in cash and the balance was transferred to his loan account.
vii. Capitals of Radha and Arnav were to be in proportion to their new profit sharing ratio. Surplus/deficit, if
any, in their capital accounts was to be adjusted through current accounts.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted
firm

2016 L, M and N were partners in a firm sharing profit in the ratio of 3 : 2 : 1. Their Balance Sheet on 31.3.2015 was as
follows:

Balance Sheet of L, M and N as on 31.3.2015

 
 Amount Amount
Liabilities Assets
(Rs) (Rs)

Creditors 1,68,000 Bank 34,000

General Reserve 42,000 Debtors 46,000
Capitals:   Stock 2,20,000
L 1,20,000   Investments 60,000
M 80,000   Furniture 20,000
N 40,000 2,40,000 Machinery 70,000
  4,50,000   4,50,000
On the above date O was admitted as a new partner and it was decided that:
(i) The new profit sharing ratio between L, M, N and O will be 2 : 2 : 1 : 1.
(ii) Goodwill of the firm was valued at Rs 1,80,000 and O brought his share of goodwill premium in cash.
(iii) The market value of investments was Rs 36,000.
(iv) Machinery will be reduced to Rs 58,000.
(v) A creditor of Rs 6,000 was not likely to claim the amount and hence to be written-off.
(vi) O will bring proportionate capital so as to give him 1/6th share in the profits of the firm.
Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the New Firm.
Or
J, H and K were partners in a firm sharing profits in the ratio of 5:3:2. On 31-3-2015 their Balance Sheet was as
follows:

Balance Sheet of J, H and K

as on 31.3.2015

 
       

Liabilities Amount Assets Amount

(Rs) (Rs)
        
Creditors 42,000 Land and Building 2,24,000
Investment- 20,000 Motor Vans 40,000
Fluctuation Fund   Investments 38,000
Profit and Loss 80,000 Machinery 24,000
Account   Stock 30,000
Capitals:   Debtors 80,000  
J 1,00,000   Less: Provision 6,000 74,000
H 80,000      
K 40,000 2,20,000 Cash 32,000
  3,62,000   3,62,000
On the above data H retires and J and K agreed to continue the business on the following terms:
(i) Goodwill of the firm was valued at Rs 1,02,000.
(ii) There was a claim of Rs 8,000 for workmen’s compensation.
(iii) Provision for bad debts was to be reduced by Rs 2,000.
(iv) H will be paid Rs 14,000 in cash and the balance will be transferred in his loan account which will be paid in
four equal yearly installments together with interest @ 10% p.a.
(v) The new profit sharing ratio between J and K will be 3:2 and their capitals will be in their new profit sharing
ratio. The capital adjustments will be done by opening current accounts.
Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of the new firm.

2017 A and Z are partners in a firm sharing profits in the ratio of 7:3. Their Balance Sheet as on 31.3.2016 was as
foreig follows was as follows: 
n

Balance Sheet of A and Z

as on 31.3.2016
Amount Amount
Liabilities Assets
(Rs) (Rs)
Sundry Creditors 60,000 Cash 36,000
Provision for Bad Debts6,000 Debtors 54,000
Outstanding Wages 9,000 Stock 60,000
General Reserve 15,000 Furniture 1,20,000
    Plant & Machinery120,000
Capitals:      
A 1,20,000      
Z 1,80,000 3,00,000   
  3,90,000  3,90,000
       
On the above date B was admitted for 14th share in the profits on the following terms:
(i) B will bring Rs 90,000 as his capital and Rs 30,000 as his share of goodwill premium, half of which will be
withdrawn by A and Z.
(ii) Debtors Rs 4,500 will be written off and a provision of 5% will be created on debtors for bad and doubtful
debts.
(iii) Outstanding wages will be paid off.
(iv) Stock will be depreciated by 10%, furniture by Rs 1,500 and Machinery by 8%.
(v) Investments of 7,500 not shown in the Balance Sheet will be reccorded.
(vi) A creditor of Rs 6,300 not recorded in the books was to be taken into account.
Pass necessary journal entries for the above transactions in the books of the firm on B’s admission.

OR

N, S and G were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 5. On 31.3.2016 their Balance
Sheet was as under:

Balance Sheet of N, S and G

as on 31.3.2016
Amount Amount
Liabilities Assets
(Rs) (Rs)
Creditors 1,65,000 Cash 1,20,000
 General Reserve90,000 Debtors 1,35,000 
Capitals:   Less Provision15,000 1,20,000
N 2,25,000   Stock 1,50,000
S 3,75,000   Machinery 4,50,000
G 4,50,000 10,50,000Patents 90,000
    Building 3,00,000
    Profit & Loss Account 75,000
  13,05,000  13,05,000
       
G retired on the above date and it was agreed that:
(i) Debtors of Rs 6,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful
debts will be maintained.
(ii) Patents will be completely written off and stock, machinery and building will be depreciated by 5%.
(iii) An unrecorded creditor of Rs 30,000 will be taken into account.
(iv) N and S will share the future profits in the ratio of 2 : 3 ratio.
(v) Goodwill of the firm on G’s retirement was valued at Rs 90,000.
Pass necessary journal entries for the above transactions in the books of the firm on G’s retirement. 

2017 The Balance Sheet of Madhu and Vidhi who are sharing profits in the ratio of 2 : 3 as at 31 st March, 2016 is given
comp below : (8)

Liabilities Amount (₹) Assets Amount (₹)

Madhu’s Capital 5,20,000 Land & Building 3,00,000
Vidhi’s Capital 3,00,000 Machinery 2,80,000
General Reserve 30,000 Stock 80,000
Debtors 3,00,000
Bills payable 1,50,000 2,90,000
Less : Provision 10,000
    Bank 50,000
  10,00,000   10,00,000
Madhu and Vidhi decided to admit Gayatri as a new partner from 1  April, 2016 and their new profit sharing
st

ratio will be 2 : 3 : 5. Gayatri brought ₹ 4,00,000 as her capital and her share of goodwill premium in cash.
 a. Goodwill of the firm was valued at ₹ 3,00,000.
b. Land and Building was found undervalued by ₹ 26,000.
c. Provision for doubtful debts was to be made equal to 5% of the debtors.
d. There was a claim of ₹ 6,000 on account of workmen compensation.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm.

OR

Ativ, Meha and Nupur were partners sharing profits and losses in the ratio of 5 : 3 : 2. On 31-3-2016, their
Balance Sheet was as under :

Liabilities Amount (₹) Assets Amount (₹)

Trade creditors 26,500 Bank 25,000
Employees’ Provident Fund 23,500 Debtors 30,000
Ativ’s capital 1,00,000 Stock 55,000
Meha’s capital 50,000 Fixed assets 1,20,000
Nupur’s capital 40,000 Advertisement expenditure 10,000
  2,40,000   2,40,000
Ativ retired on 1-4-2016. For this purpose, the following adjustments were agreed upon :
(a) Goodwill of the firm was to be valued at 2 years’ purchase of the average profits of 3 completed years
preceding the date of retirement. The profits for previous years were : 2013-14 ₹ 55,000; 2014-15 ₹
65,000; 2015-16 ₹ 60,000.
(b) Fixed assets were to be increased by ₹ 25,000.
(c) Stock was overvalued by ₹ 5,000.
(d) ₹ 20,000 were immediately paid to Ativ and the balance was transferred to his loan account.
Prepare Revaluation account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm.

ayant, Kartik and Leena were partners in a firm sharing profits and losses in the ratio of 5 : 2 : 3. Kartik died and
Jayant and Leena decided to continue the business. Their gaining ratio was 2 : 3.
Calculate the new profit sharing ratio of Jayant and Leena
Chander and Damini were partners in a firm sharing profits and losses equally. On 31 st March, 2017 their
Balance Sheet was as follows :
Balance Sheet of Chander and Damini as on 31.3.2017
Liabilities Amount ₹ Assets Amount ₹
Sundry Creditors 1,04,000 Cash at Bank 30,000
Capitals   Bills Receivable 45,000
Chander 2,50,000   Debtors 75,000
Damini 2,16,000 4,66,000 Furniture 1,10,000
    Land and Building 3,10,000
  5,70,000   5,70,000
On 1.4.2017, they admitted Elina as a new partner for 1/3  share in the profits on the following conditions :
rd

i. Elina will bring ₹ 3,00,000 as her capital and ₹ 50,000 as her share of goodwill premium, half of which
will be withdrawn by Chander and Damini.
ii. Debtors to the extent of ₹ 5,000 were unrecorded.
iii. Furniture will be reduced by 10% and 5% provision for bad and doubtful debts will be created on bills
receivables and debtors.
iv. Value of land and building will be appreciated by 20%.
v. There being a claim against the firm for damages, a liability to the extent of ₹ 8,000 will be created for the
same.
Prepare Revaluation Account and Partners’ Capital Accounts,

 Kavi, Ravi, Kumar and Guru were partners in a firm sharing profits in the ratio of 3 : 2: 2: 1. On. 1.2.2017, Guru
retired and the new profit sharing ratio decided between Kavi, Ravi and Kumar was 3: 1: 1. On Guru's
retirement the goodwill of the firm was valued at Rs 3,60,000. Showing your working notes clearly, pass necessary
journal entry in the books of the firm for the treatment of goodwill on Guru's retirement.
.Madhu and Neha were partners in a firm sharing profits and losses in the ratio of 3 : 5. Their fixed capitals were
Rs 4,00,000 and Rs 6,00,000 respectively. On 1.1.2016, Tina was admitted as a new partner for 14th share in the
profits. Tina acquired her share of profit from Neha. Tina brought Rs 4,00,000 as her capital which was to be
kept fixed like the capitals of Madhu and Neha. Calculate the goodwill of the firm on Tina's admission and the
new profit sharing ratio of Madhu, Neha and Tina. Also, pass necessary journal entry for the treatment of
goodwill on Tina's admisson considering that Tina did not bring her share of goodwill premium in cash. 
6

C and D are partners in a firm sharing profits in the ratio of 4 : 1. On 31.3.2016, their
Balance Sheet was as follows:

Balance Sheet of C and D

as on 31.3.2016
Amount Amount
Liabilities Assets
(Rs) (Rs)
Sundry Creditors 40,000 Cash 24,000
Provision for Bad Debts4,000 Debtors 36,000
Outstanding Salary 6,000 Stock 40,000
General Reserve 10,000 Furniture 80,000
    Plant & Machinery80,000
Capitals:      
C 1,20,000      
D 80,000 2,00,000   
  2,60,000  2,60,000
       
On the above date, E was admitted for 14th share in the profits on the following terms:

(i) E will bring Rs 1,00,000 as his capital and Rs 20,000 for his share of goodwill premium,
half of which will be withdrawn by C and D.
(ii) Debtors Rs 2,000 will be written off as bad debts and a provision of 4% will be created
on debtors for bad and doubtful debts.
(iii) Stock will be reduced by Rs 2,000, furniture will be depreciated by 4,000 and 10%,
depreciation will be charged on plant and machinery.
(iv) Investments Rs 7,000 not shown in the Balance Sheet will be taken into account.
(v) There was an an outstanding repairs bill of Rs 2,300 which will be recorded in the books.
Pass necessary journal entries for the above transactions in the books of the firm on E’s
admission.

OR

Sameer, Yasmin and Saloni were partners in a firm sharing profits and losses in the ratio of
4 : 3 : 3. On 31.3.2016, their Balance Sheet was as follows:

Balance Sheet of Sameer, Yasmin and Saloni

as on 31.3.2016
Amount Amount
Liabilities Assets
(Rs) (Rs)
Creditors 1,10,000 Cash 80,000
General Reserve 60,000 Debtors 90,000  
Capitals:   Less: Provision 10,000 80,000
Sameer 3,00,000   Stock 1,00,000
Yasmin 2,50,000   Machinery 3,00,000
Saloni 1,50,000 7,00,000 Building 2,00,000
    Patents 60,000
    Profit & Loss A/c 50,000
  8,70,000   8,70,000
       
On the above date, Sameer retired and it agreed that:
(i) Debtors of Rs 4,000 will be written off as bad debts and a provision of 5% on debtors for
bad and doubtful debts will be maintained.
(ii) An unrecorded creditor of Rs 20,000 will be recorded.
(iii) Patents will be completely written off and 5% depreciation will be charged on stock,
machinery and building.
(iv) Yasmin and Saloni will share the future profits in the ratio of 3 : 2.
(v) Goodwill of the firm on Sameer’s retirement was valued at Rs 5,40,000.
Pass necessary journal entries for the above transactions in the books of the firm on
 Sameer’s retirement.

S X, Y and Z are partners sharing profits in the ratio of 3 : 2 : 1. Y retires and X and Z decide to
P share the future profits in the ratio of 3 : 2. Goodwill of the firm is valued at ₹ 1,50,000. Fill in
1 the missing figures in the following Journal entries:

JOURNAL

Date Particulars   L.F

  X's Capital A/c Dr.  
  Y's Capital A/c Dr.  
  Z's Capital A/c Dr.  
  To Goodwill A/c    
  (Being the existing goodwill written off)    
  X's Capital A/c Dr.  
  Z's Capital A/c Dr.  
  To Y's Capital A/c    
(Being Y's share of goodwill adjusted by debiting gaining partners
 
X and Z in their gaining ratio)
The Balance Sheet of Ram, Shyam, and Hari as at 31.3.2003 stood as follows:
Balance Sheet as at 31.3.2003

Liabilities Amt(Rs.) Assets Amt(Rs.)

Creditors 24,400 Cash 1,00,000
Bills Payable 90,000 Debtors 30000  
General Reserve 24,000 Less: Provision1600 28,400
Investment Fluctuation
2,000 Stock 4,000
Reserve
Profit and Loss
3,000 Computers 9,000
Account
Ram's Capital 51,000 Building 1,00,000
Shyam's Capital 40,000 Investments 30,000
Hari's Capital  40,000 Goodwill 3,000
  2,74,400   2,74,400
Hari retired on 1.4.2003 and the following adjustments were agreed upon:

a. The building is appreciated by Rs 10,000.

b. Investments are valued 10% less than the book value.
c. All Debtors were good.
d. Stock be reduced to 93%.
e. Goodwill is valued at one year’s purchase of the average profit of the past three years. It
was decided not to show goodwill in the balance sheet of the reconstituted firm.
f. Hari shall be paid Rs 13,440 immediately and the balance in four equal yearly
instillments together with interest @ 10% p.a.
g. New ratio of Ram and Shyam would be 2:1.

1. A and B are partners sharing profits in the ratio of 4 : 3. Their Balance Sheet as at 31st
March 2019 stood as :

Balance Sheet

Liabilities ₹ Assets
Sundry Creditors   28,000 Cash 20,000
Reserve   42,000 Sundry Debtors 1,20,000
Capitals A/cs:     Stock 1,40,000
A's Capital 2,40,000   Fixed Assets 1,50,000
B's Capital 1,20,000 3,60,000    
Total   4,30,000   4,30,000
They decided that with effect from 1st April 2019, they will share profits and losses in the
ratio of 2 : 1. For this purpose they decided that:

i. Fixed assets are to be depreciated by 10%.

ii. A Provision for Doubtful Debts of 6% be made on Sundry Debtors.
 iii. Stock be valued at ₹1,90,000.
iv. An amount of ₹ 3,700 included in Creditors is not likely to be claimed.

Partners decided to record the revised values in the books. However, they do not want to
disturb the Reserves. You are required to pass the Journal entries, prepare the Capital
Accounts of Partners and the revised Balance Sheet.

2. X, Y and Z were in partnership sharing profits in the ratio of 3:2:1. On 1 st April, 2015
the Balance Sheet of the firm stood as follows:

Liabilities   ₹ Assets
Provision for Doubtful Debts   1,300 Cash at Bank
Sundry Creditors   15,000 Debtors
Capitals:     Stock
X 78,750   Machinery
Y 70,000   Land and Building
Z 61,250 2,10,000  
    2,26,300  
3. Z retires on the above date and the new profit sharing ratio between X and Y will be 5 : 4.
Following terms were agreed :

Land and Buildings be reduced by 10%.

Out of the insurance premium paid during the year ₹ 5,000 be carried forward as unexpired.

i. There is no need of any provision for doubtful debts.

ii. Goodwill of the firm be valued at ₹ 54,000.
iii. X and Y decided that their capitals will be adjusted in their new profit sharing
ratio, by bringing in or paying cash to the partners. Z’s a/c will be transferred to
his loan a/c.
a. Pass necessary journal entries; prepare the capital accounts and the new
balance sheet.
b. Z is paid ₹ 9,300 on the date of retirement and the remaining amount in
 three equal instalments together with interest at the rate of 10% p.a. on
the outstanding balance. Show Z’s loan a/c for 3 years.

A, B and C were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. C retired and
his capital balance after adjustments regarding reserves, accumulated profits/losses and his share
of gain on revaluation was ₹ 2,50,000. C was paid ₹ 3,22,000 including his share of goodwill.
The amount credited to C’s capital account, on his retirement, for goodwill will be:

A. ₹ 72,000
B. ₹ 7,200
C. ₹ 24,000
D. ₹ 36,000

Mohan, Vinay and Nitya were partners in a firm sharing profits and losses in the proportion
of 12, 13 and 16 respectively. On 31st March, 2018, their Balance Sheet was as follows: (8)

Balance Sheet of Mohan, Vinay and Nitya as at 31st March, 2018

Amount
Liabilities   Assets   Amount (Rs.)
(Rs.)
Creditors   48,000 Cash at Bank   31,000
Employee's Provident
  1,70,000 Bills Receivable   54,000
Fund
Contingency Reserve   30,000 Book Debts 63,000  
Less : Provision for doubtful
Capitals :     2,000 61,000
debts
Mohan 1,20,000   Plant and Machinery   1,20,000
Vinay 1,00,000   Land and Building   2,92,000
Nitya 90,000 3,10,000      
    5,58,000     5,58,000
Mohan retired on the above date and it was agreed that:
 i. Plant and machinery will be depreciated by 5%.
ii. An old computer previously written off was sold for Rs.4,000.
iii. Bad debts amounting to Rs.3,000 will be written off and a provision of 5% on
debtors for bad and doubtful debts will be maintained.
iv. Goodwill of the firm was valued at Rs.1,80,000 and Mohan’s share of the same
was credited in his account by debiting Vinay’s and Nitya’s accounts.
v. The capital of the new firm was to be fixed at Rs.90,000 and necessary
adjustments were to be made by bringing in or paying off cash as the case may
be.
vi. Vinay and Nitya will share future profits in the ratio of 3: 2.

Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the
reconstituted firm.

OR

Leena and Rohit are partners in a firm sharing profits in the ratio of 3 : 2. On 31st March,
2018, their Balance Sheet was as follows :

Balance Sheet of Leena and Rohit as at 31st March, 2018

Liabilities   Amount (Rs.) Assets   Amount (Rs.)

Sundry Creditors   80,000 Cash   42,000
Bills Payable   38,000 Debtors 1,32,000 
Less: Provision for doubtful
General Reserve   50,000 2000  
debts
Capitals :     Stock   1,30,000
Leena 1,60,000   Plant and Machinery   1,50,000
Rohit 1,40,000        
    3,00,000      
    4,68,000     4,68,000
2. On the above date Manoj was admitted as a new partner for 1/5th share in the profits of
the firm on the following terms:
 3. Manoj brought proportionate capital. He also brought his share of goodwill premium of
Rs.80,000 in cash.
4. 10% of the general reserve was to be transferred to provision for doubtful debts
5. 10% of the general reserve was to be transferred to provision for doubtful debts
6. Stock was overvalued by Rs.16,000

The capital of the new firm was to be fixed at Rs.90,000 and necessary adjustments were to be
made by bringing in or paying off cash as the case may be.

Leena, Rohit and Manoj will share future profits in the ratio of 5 : 3 : 2.

Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the
reconstituted firm.