Time 1.

5 hours 40 marks

S.no. Marks
1. At the time of retirement of a partner, profit (gain) on revaluation will be credited to the 1
Capital Accounts of
a) Retiring partner
b) All partner in their old profit-sharing ratio
c) The remaining partners in their old profit-sharing ratio
d) The remaining partners in their new profit-sharing ratio
2. Amla, Bimla and Kavita were partners sharing profits and losses in the ratio of 4:3:1. 1
Bimla retires and gives her share of profit to Amla for 3,600 and to Kavita for 3,000. The
gaining ratio of Amla and Kavita will be.
a) 4:5
b) 2:1
c) 6:5
d) 4:1
3. A, B and C were partners in a firm sharing profits and losses in the ratio of 5:3:2. C 1
retired and his capital balance after adjustments regarding reserves, accumulated
profit/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
4. A, B and C are partners. C expired on 18th December, 2019 and as per the agreement 1
surviving partners A and B directed the accountant to prepare financial statements as
on 18th December, 2019 and accordingly the share of profit of C (deceased partner) was
calculated as 12,00,000. Which account will be debited to transfer C’s share of profit?
a) Profit & Loss Suspense Account
b) Profit & Loss Appropriation Account
c) Profit & Loss Account
d) None of these
5. X, Y and Z were partners sharing profits in the ratio of 2:2:1. Y died on 30th June, 2023 1
and profit for the accounting year ended 31st March, 2023 was 3,60,000. If profit share
of deceased partner is to be calculated based on previous year’s profit amount of profit
credited to Y’s Capital Account will be
a) 72,000
b) 36,000
c) 1,44,000
d) 2,80,000
6. Lisa, Monika and Nisha are partners in a firm, sharing profits in the ratio of 2:2:1. Their 1
Capital Accounts stood as 50,000; 50,000 and 25,000 respectively. Monika died, and
balance in the reserve on that date was 15,000. If goodwill of the firm is 30,000 and
profit on revaluation is 7,050 what amount will be transferred to Monika’s Executor’s
Account?
a) 50,820
b) 70,820
c) 8,820
d) 60,820
7. On the basis of the following data, how much final payment will be made to a partner 1
on firm’s dissolution? Credit balance of Capital Account of the partner was 50,000.
Share of loss on realization amounted to 10,000. Firms liability taken over by him was
for 8,000.
a) 32,000
b) 48,000
c) 40,000
d) 52,000
8. At the time of dissolution for a firm Creditors are 70,000; Firm’s Capital is 1,20,000; Cash 1
balance is 10,000. Other assets realized 1,50,000. Gain/Loss in the Realisation Account
will be
a) 30,000 Gain
b) 40,000 Gain
c) 40,000 Loss
d) 30,000 Loss
9. On dissolution if a partner pays firm’s liability which of the following account is debited? 1
a) Profit & Loss Account
b) Realisation Account
c) Partner’s Capital Account
d) Cash/Bak Account
10. A firms is dissolved, Param a partner is to carry out dissolution for which he will get 1
5,000 including expenses. Realisation expenses were 2,500. Realisation Account will be
debited by
a) 5,000
b) 2,500
c) 7,500
d) None of these
11. Surender, Ramesh, Naresh and Mohan are partners in a firm sharing profits in the ratio 3
2:1:2:1. On the retirement of Naresh, goodwill was valued at ₹72,000. Surender, Ramesh
and Mohan decided to share future profits equally. Pass the adjustment entry for
goodwill without opening Goodwill Account. Show the workings.
12. Ajay, Bhawna and Shreya were partners sharing profits in the ratio of 2:2:1. On 1 st July, 3
2022 Shreya died. The books of accounts are closed on 31st March every year. Sales for
the year 2021-22 ₹5,00,000 and that from 1st April to 30th June were ₹1,40,000. Rate of
profit during the past three years had been 10% on sales. Since Shreya’s legal
representative was her only son, who is differently abled, it was decided that the profit
for the purpose of setting Shreya’s account is to be calculated as 20% on sales.
 Calculate Shreya’s share of profits till the date of her death and pass necessary journal
entry for the same.
13. Ravi, Shankar and Madhur were partners in a firm sharing profits in the ratio of 7:2:1. 4
On 31st March, 2018 the firm was dissolved, after transferring sundry assets (other than
cash in hand and cash at bank) and third-party liabilities in the Realisation Account the
following transactions took place:
a) Debtors amounting to ₹1,40,000 were handed over to a debt collection agency which
charged 5% commission. The remaining debtors were ₹47,000, out of which debtors of
₹17,000 could not be recovered because the same became insolvent
b) Creditors amounting to ₹5,000 were paid ₹3,500 in full settlement of their claim and
balance creditors were handed over stock of ₹90,000 in full settlement of their claim of
₹95,000.
c) A bill receivable for ₹2,000 discounted with the bank was dishonoured by its acceptor
and the same hand to be met by the firm.
d) Profit on realization amounted to ₹6,000.
Pass necessary journal entries for the above transactions in the books of Ravi, Shankar
and Madhur.
14. Simar, Raja and Rita were partners in a firm sharing profits and losses in the ratio of 4
2:2:1. The firm was dissolved on 31st March, 2019. After the transfer of assets (other
than cash) and external liabilities to the Realisation Account, the following transactions
took place:
a) A debtor whose debt of ₹90,000 had been written off as bad, paid ₹88,000 in full
settlement.
b) Creditors to whom ₹1,21,000 were due to be paid accepted stock at ₹71,000 and the
balance was paid to them by a cheque
c) Raja had given a loan to the firm of ₹18,000. He was paid ₹17,000 in full settlement of
his loan.
d) Investment were ₹53,000 out of which investments of ₹43,000 were taken by Simar
at ₹52,000 and the balance of the investments were sold for ₹12,000.
Pass the necessary journal entries for the above transactions in the books of the firm.
15. Pradeep and Rajesh were partners in a firm sharing profits and losses in the ratio of 3:2. 4
They decided to dissolve their partnership firm on 31st March, 2018. Pradeep was
deputed to realise the assets and to pay off the liabilities. He was paid ₹1,000 as
commission for his services. The financial position of the firm on 31st March, 2018 was
as follows:
Balance Sheet as at 31st March, 2018
Liabilities Amount Assets Amount
Creditors 80,000 Building 1,20,000
Mrs. Pradeep’s loan 40,000 Investment 30,600
Rajesh loan 24,000 Debtors 34,000
Investment Fluctuation fund 8,000 Less PFDD 4,000 30,000
Capital A/c Bills receivables 37,400
Pradeep 42,000 Bank 6,000
Rajesh 42,000 84,000 Profit and loss A/c 8,000
Goodwill 4,000
2,36,000 2,36,000
Following terms and conditions were agreed upon:
 a) Pradeep agreed to pay his wife’s loan
b) Half of the debtors realized ₹12,000 and remaining debtors were used to pay 25% of
the creditors.
c) Investment sold to Rajesh for ₹27,000
d) Building realized ₹1,52,000
e) Remaining creditors were to be paid after two months, they were paid immediately at
10% p.a. discount.
f) Bill receivables were settled at a loss of ₹1,400
g) Realisation expenses amounted to ₹2,500.
Prepare Realisation Account.
16. Radha, Manas and Arnav were partners in a firm sharing profits and losses in the ratio of 6
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
Liabilities Amount Assets Amount
Capital A/c 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 Fluctuation fund 1,10,000 Less PFDD 10,000 2,10,000
Creditors 2,50,000 Cash 1,50,000
2,36,000 2,36,000
st
Manas retired on 1 April, 2019. It was agreed that:
a) Stock was to be appreciated by 20%
b) Provision for Doubtful Debts was to be increased to ₹15,000
c) Value of furniture was to be reduced by ₹3,000
d) Market value of investment was ₹1,90,000
e) Goodwill of the firm was valued at ₹2,00,000 and Mana’s share was adjusted in the
accounts of Radha and Arnav.
f) Manas was paid ₹68,000 in cash and the balance was transferred to his loan account.
g) Capital of Radha and Arnav were to be in proportion to their new profit sharing ratio.
Surplus/deficit if any in their capital account was to be adjusted through current
accounts.
Prepare Revaluation Account and Partner’s Capital Account.
17. A, B and C were partners in a firm sharing profits and losses in the ratio of 3:2:1. C died 6
on 30th June,2016. After all the necessary adjustments, his capital account showed a
credit balance of ₹70,600. C’s executor was paid ₹10,600 on 1st July, 2016 and the
balance in three equal yearly instalments starting from 30th June, 2017 with interest
@10% p.a. on the unpaid amount. The firm closes its books on 31st March every year.
Prepare C’s Executor’s Account till the amount is finally paid.