ACCOUNTS FIRST TERM REVISION TEST 2013

GRADE : 12

Max.marks: 80
Time allowed:3 hours
1. Give four items which may appear on the credit side of the partners Current Accounts?
(1)
2. What is partnership deed?
(1)
3. How will the location affect goodwill of the firm?
(1)
4. Give the journal entry for treatment of Profit and Loss Account Debit balance at the time
of Admission of a partner.
(1)
5. What is the objective of preparing Revaluation Account at the time of admission of a
Partner?
(1)
6. Distinguish between sacrificing ratio and gaining ratio?
(1)
7. What is hidden goodwill in the case of retirement?
(1)
8. Give journal entry for recording the profit of a deceased partner?
(1)
9. How will you calculate share in the profit of a deceased partner according to turnover
basis?
(1)
10.State the name of accounts which are not transferred to realization A/c? (any 4)
(1)
11.P,Q and R are partners sharing profits and losses in the ratio of 3:1:1. On 1.1.2007, they
decided to share
Profits and losses equally in future profits. The goodwill of the firm is valued at ` 30,000.
Give necessary
Journal entry.
(3)
12.A,B and C were partners sharing profits and losses in the ratio of 3:2:1 respectively. With
effect from 1.4.2007
They decided to share future profits equally. For this purpose the following assets and
liabilities were revalued as under:
Particulars
old values(`)
revised values(`)
Furniture
14,000
25,000
Buildings
4,20,000
4,64,000
Sundry creditors
31,870
32,700
Give adjusting entry because of the above changes assuming that the assets and liabilities
will continue to appear in their old values in the revised books.
(3)
13.Anju and Manju are partners sharing profits in the ratio of 5:3. Sanjay, the new partner
gets 1/5th which he takes equally from Anju and Manju. Calculate new profit sharing ratio.
(3)
14. Sonu and Vibhu are partners sharing profits in the ratio of 2:1. They admit Vikas as a
partner for th share. His share of goodwill is ` 18,000. Give journal entry if he is unable
to bring his share of goodwill in cash. (3)

15.P,Q and R are partners in a firm. Their capital accounts stood at ` 30,000, ` 15,000 and `
15,000 respectively on 1.1.2010. as per the provisions of the deed:
(i)
R was to be allowed a remuneration of ` 3,000 p.a.
(ii)
Interest at 5% p.a. was to be provided on capital.
(iii)
Profits were to be divided in the ratio of 2:2:1.
Ignoring the above terms, the net profit of ` 18,000 for the year ended 2010 was
divided among the three partners equally. Pass adjustment entry to rectify the
error. Show the workings clearly.
(4)
16.A, B and C were in partnership sharing profits as 4:2:1 respectively. It was provided that in
no case Cs share in profits should be less than ` 7,500.
The profit for the year 1991 amount to ` 31,500. Prepare profit and loss appropriation A/c
(4)

17.From the following information calculate value of goodwill by :

(i)
Capitalization method
(ii)
2 years purchase of Super profit
Total capital of the firm ` 16,00,000
Reasonable rate of return 10%
Profit for the year ` 2,00,000
(4)

18.Ajay,Vijay and Sanjay are partners in the ratio of 5:4:3. Vijay retires. After making all
adjustments relating to
Revaluation, goodwill and accumulated profits, etc. the capital account of Ajay showed a
credit balance of `2,00,000 and that of Sanjay is ` 1,00,000. It was decided to adjust the
capitals of Ajay and Sanjay in their profit sharing ratio. You are required to calculate the
new capital of the partners and record necessary entry for surplus/deficit.
(4)
19.A, B and C are partners in a firm. A retires on 1.1. 2010. On the date of retirement, `
80,000 is due to him in all. It is agreed to pay him this amount in 4 equal annual
installments plus interest @ 10% p.a.
Prepare As Loan A/c till it is finally closed.
(4)
20.Ashok and Ramu are partners respectively sharing profits in the ratio of 3:2. Their capitals
on 1.1. 2006 were ` 80,000 and ` 60,000 respectively. They admitted vijat into the
partnership on that date giving him 1/5 th share in the future profits which he acquired
equally from Ashok and Ramu. Vijay is to bring ` 60,000 as his share of capital.P/L A/c
shows a credit balance of ` 20,000. Find the new profit sharing ratio and goodwill of the
firm. Goodwill appears in the balance sheet at ` 5,000.
Record necessary journal entries on Vijays admission from the above mentioned
transactions.
(4)

OR
Here you can expect a value based question.
21.A, B and C are partners sharing profits and losses in the ratio of 4:3:1. B retires, selling his
share of profits
To A and C for ` 8,100; ` 3,600 paid by A and ` 4,500 paid by C. The profits for the year
after Bs retirement
Were ` 10,500.
You are required
(i)
to give the necessary journal entries to record the transfer of Bs share to A and C;
(ii)
To calculate the new profit sharing ratio and distribute the profits between A and C.
A and C bring necessary cash.
(6)
(hint: illustration 8 in retirement chapter)
22.A,B and C were partners in a firm sharing profits in the ratio of 5:3:2. On 31.3.2005, their
B/S was:
liabilities
`
Assets
`
Creditors
7,000
Building
20,000
Reserve
10,000
Machinery
30,000
Capital A/cs:
Stock
10,000
A
Patents
6,000
30,000
Debtors
8,000
B
70,000
cash
13,000
25,000
C
15,000
87,000
87,000
B died on 1.10, 2005. It was agreed between his executors and the remaining partners
that:
(i)
Goodwill be valued at 2 years purchase of the average profit of the previous 5
years, which were 2001:`15,000; 2002: ` 13,000; 2003: ` 12,000; 2004: ` 15,000
and 2005:` 20,000.
(ii)
Patents be valued at ` 8,000; machinery at ` 28,000; and building at ` 30,000.
(iii)
Profit for the year 2005-2006 be taken as having accrued at the same rate as the
previous year.
(iv)
Interest on capital be provided @ 10% p.a.
(v)
A sum of ` 4,250 was to be paid to his executors immediately.
Prepare Bs capital A/c and his executors account at the time of his death.
(6)
23.Journalise the following transactions of the firm at the time of dissolution. Harry and Jim
shared profits in the ratio of 3:2.
(i)
There was a debit balance of ` 7,500 in the profit and loss A/c.
(ii)
Machinery of the book value of ` 20,000 was taken over by Harry at a discount of
10%. He also took over land and building valued at ` 5,00,000 for ` 6,00,000.
(iii)
Jim agreed to pay creditors amounting to ` 34,000; he also paid ` 4,000.
(iv)
Loss on dissolution was ` 9,000.
(v)
Deferred Advertisement Expenditure Account appeared in the books at ` 28,000.
(vi)
An unrecorded computer realized ` 7,000.
(6)

24. On 31.12.2009, the Balance sheet of A and B, who are partners in a firm sharing profits in
the ratio of 3:2 was:
Liabilities
Capital A/cs:
A
B
General reserve
Workmens compensation
Fund
creditors

`
10,000
8,000
15,000
5,000
12,000

Assets
Plant and machinery
Land and building
Debtors
12,000
Less provision
1,000
Stock
cash

`
10,000
8,000
11,000
12,000
9,000

50,000
50,000
They agreed to admit C into partnership for 1/5 th share of its profits on the following
terms:
(i)
(ii)
(iii)
(iv)
(v)
(vi)

Provision for doubtful debts would be increased by ` 2,000.

The value of land and building would be increase to ` 18,000.
The value of stock would be increased by ` 4,000.
The liability against workmens compensation fund is determined at ` 2,000.
C brought in as his share of goodwill ` 10,000 in cash.
C would bring further cash as would make his capital equal to 20% of the total
capital of the new firm,
after the above revaluation and adjustments are carried out.
Prepare the revaluation A/c, partners capital A/cs and the B/S of the firm after Cs
admission. (8)

25. Following is the balance sheet of X and Y, who share profits and losses in the ratio of 4:1,
as at 31.3.2009.
liabilities
Sundry creditors
Bank o/d
Xs brothers loan
Ys loan
Investment fluctuation
fund
Capital A/cs:
X
Y

`
8,000
6,000
8,000
3,000
5,000
50,000
40,000

Assets
Bank
Debtors
17,000
Less provision
Stock
Investments
Building
Goodwill
Profit and loss A/c

`
20,000
2,000

15,000
15,000
25,000
25,000
10,000
10,000

1,20,000
1,20,000
The firm was dissolved on the above date and the following arrangements were decided
upon:
(i)
(ii)
(iii)
(iv)
(v)
(vi)

X agreed to pay off his brothers loan.

Debtors of ` 5,000 proved bad.
Other assets realized --- investments 20% less; and goodwill at 60%.
One of the creditors for ` 5,000 was paid only ` 3,000. Building was auctioned for `
30,000 and the auctioneers commission amounted to ` 1,000.
Y took over part of stock at ` 4,000 (being 20 % less than the book value). Balance
stock realized 50%.
Realization expenses amounted to ` 2,000.
Prepare realization A/c, partners capital A/cs and Bank A/c.
(8)
***********************************