Read the following hypothetical situation, Answer Question No. 8,9 and 10.

Shiv and Mohan are two partners sharing profits and losses in the ratio of 3 :2. On 31st March, 2024,
their Capital Accounts stood at 55,000 and ? 45,000 after distribution of net profit of ? 15,000 and due
consideration of drawings of the partners for 6,000 and R 4,000 respectively. After closing the book,
the following discrepancies were noticed:

(0) An item in the inventory was valued at 12,800 but had a realisable value of ?8,300.
(i) 2,400 paid for insurance premium for the year ending on 30th June, 2024 had been debited to

Profit & Loss Account.

(ii) Interest on Capital at 5% on partners'capital asat the beginning of the year and interest on drawings
of partnersat 8% p.a. were left out of consideration.

8. Balance of opening capital on 1st April, 2023:

Shiv Mohan Shiv Mohan

(a) 40,000 35,000. (b) 46,000 39,000.

(c) 52,000 43,000. (d) 64,000 51,000.

9. Correctprofit is

(a) 15,500. (b) 11,100.

(c) 10,500. (d) None of these.

10. Divisible profit is

(a) 6,350. (b) ? 6,750.

(c)7,100. (d) ?1,15,000.

11. Lalan and Balan were partners in a firm sharing profits in the ratio of 3:2.Their fixed capitals on 1st April, 2023
were: Lalan 10,00,000and Balan 20,00,000. They agreed to allow interest on capital @ 129% per annum and

to charge on drawings @
159% per annum. The firm earned profit, before allabove adjustments, of *3,00,0
for theyear ended 31stMarch, 2024. Drawings of Lalan and Balan during the year were 30,000 and 50,000 ?
respectively. Showing your calculations, clearly prepare Profit & Loss Appropriation A/cof Lalan and Balan.
The interest on capital will be allowed even if the firm incurs a loss.

12. Hari and Kunal werepartners in a firm sharing profits in the ratio of 5:3. Their fixed capitals on 31st
March.
2023 were: Hari ?60,000 and Kunal 80,000. They agreed to allow interest on capital @ 12% p.a. The profit
of
thefirm for the year ended 31st March, 2024 beforeallowing interest on capital was 12,600.
Pass necessary
Journal entries for theabove transactions in thebooks of Hari and
Kunal.Also show your working clearly.

13. The partnersof a firm distributed the profits for the year ended 31st March, 2024, 4,50,000 in the ratio of
3:2:1without providing for the following adjustments:
(0) Xand Y were entitled to a salary of 7,500 p.a.

(i) Y was entitled to a commission of ? 22,500.

(ii) Yand Z had guaranteeda minimum profit of 1,75,000p.a. to X.
(iv) Profit was tobe shared in the ratio of 3:3:2.
Pass necessaryJournal entry for theabove adjustment in the books of the firm, Show your working clearly.
 8. Find the capitalised value of business from the following information:

Annual Profit =8,00,000;Normal Rate of Return = 20%

Assets (incudingcash) 62,00,000; Cash 2,00,000; Outside liabilities = 10,00,000.

(a) 40,00,000 (b) 1,60,00,000

(c) 52,00,000 (d) 45,000

9.Average Profit 4,40,000, Capital Employed 8,00,000; Normal Rate of Return 159%. Management Cost

during this period is estimated to be 2,00,000.

Calculate the value of goodwillon the basis of two years' purchase of Super Profit.

10. A firm earns profit of 2,50,000, The Normal Rate of Return in a similar type of business is 10%.The value
of goodwill are
of total asset (excluding goodwill) and total outsiders' liabilities as on the date of valuation
27,50,000 and 7,00,000 respectively.

Calculatethe value of goodwill by adopting Capitalisation of Super Profit Method.

11. Ajit and Baljit were sharing profits in the ratio of 3 :2.They admit Chaman into the partnership for 1/6th
was 18,000. The
of future profits, Goodwill, valued at 4 tirnes the average super profit of the firm,
share
firms
The normal earning capacity of such is

firmhad assets worth ? 15,00,000 and liabilities 2 12,00,000.

by the frm.
to be 10%, Find the Ayeraqe Business Profit/Actual Business Profit earned
expected
 ratio of 5:3:2 decide to share future
7. X, Y and Z who are presently sharing profits and losses in the
1,80.000
& losses equally with effect from 1st April,
2024. Goodwill of the firm is valued at

profits
the books at 30,000.
Goodwill already exists in

of Goodwill.
Pass the necessary Journal entries for the adjustment
losses in the ratio 5:3:2.They decide
8. Sonu, Sumit and Sahil are partners in a firm sharing profits and
of

to share profits and losses in the ratio of 2:5:3with effect from 1st April, 2024. Land (having book value

of 1,00,000) was found undervalued by 5,00,000. The stock (having book value of 4,00,000) was

found overvalued by 3,00,000.

Pass the necessary adjustment entry without affecting the existing figures.
 Read the following hypothetical situation and answerQ. 5and Q. 6.
Amol and Ameet are partners sharing profits and losses in the ratio of 2: Theyadmit Atul for 1/4th share. For
1.

the purpose of admission of Atul, goodwill of the firm is to be valued on the basis of 2 years' purchase
of Average Super Profit of last four years. The normal rate of return in their business is 12% on capital

employed.

Balance Sheet of the firm gives following details:

•Fixed Assets 2,10,000

• Current Assets140,000
• Current
Profits of

2021

1,10,000
Liabilities

last

()
4 years
35,000.

ending on 31st March, are:

2022 ()

1,00,000
2023

98,000
) 2024 ()
1,24,000

on Atul's admission was

5. Value of goodwill of the
firm
(b) 1,05,200.
(a) 70,200. (d) 1,08,000.
(c) 140,400.
6. Atul brings 60% of his share of goodwill. The account to be debited to record his compensation wl he

(a) Premium for Goodwill A/c 21,060. (b) Atuls Current A/c? 14,040.

(c) Both (a) and (b). (d) Premium for Goodwill Ac 35,100.

7. On the date of Shiv's admission, an extract of the Balance Sheet of Ram and Mohan sharing profts &.
losses in the ratio of 3 : 2 was as under:

Liabilities Assets

General Reserve 50,000|nvestment (Market Value 1,90,000) 2,00,000

ContingenciesReserve 4,500 Advertisement Expenditure 10,000

Profit & Loss A/c 30,000 (Deferred Revenue)

InvestmentFluctuation Reserve 15,000

Workmen Compensation Reserve 12,000

Employees'Provident Fund 25,000

New PartnerShiv was admitted for 1/4th share of profit. A claim on account of Worknen's Compensation
is 1,500.

Pass the necessary Journal entries.

8. Kavi and Ravi were partners in a firm sharing profits in the ratio of 5:3.On 31st March, 2024,they
admitted Chhavi as a partner for 1/5th share in the profit. On Chhavi's admission, the Balance Sheetof
the firm was as follows:

Liabilities Assets

Kavi's Capital 1,50,000 Land and Building 1,50,000

Ravi's Capital 90,000 Machinery 45,000

Creditors 20,000 Stock 27,000

Workmen Compensation Reserve 32,000 Debtors 47,000

Less: Provision for Doubtful Debts 1,200 45,800

Cash at Bank 4,200

Profit & Loss 20,000

2,92,000 2,92,000

On Chhavi'sadmission, it was agreed that:

(0) Chhaviwill bring 40,000 as her capital and 16,000 for her share of goodwill premium, half of

which was withdrawn by Kavi and Ravi.

(ii) A provision of 2.5% for doubtful debts was to be created.

(ii) Included in the sundry creditors was an item of 2,500 which was not to be paid.
(iv) A provision was to be made for an outstanding bill for electricity 3,325.
(v) The newprofit-sharing ratio will be 5 :3:2.
Aftertheabove adjustments,the capitals of oldpartnerswere to be adjusted on the basis of new partners
capital. Actual cash was to be brought in or to
be paid off as the case may be.
Prepare Revaluation Account, Capital Accounts of the partners and Balance Sheet of the New Firm.