Accountancy Paper
Paper- 4 MM- 20
1. Annual profit shown by a business is Rs.20,000. Normal rate of return 10%. Total assets of the business
firm Rs.2,40,000 and liabilities Rs.80,000. Value of Goodwill will be: (1)
a. Rs.40,000 b. Rs.30,000
c. Rs.20,000 d. No Goodwill of Business
2. AK, BK and CK are sharing profits in the ratio of 2:1:1. They have decided to share future profits in the
ratio of 3:2:1. Find out the gainer partner. (1)
a. Both AK is the gainer partner and CK is the gainer partner
b. CK is the gainer partner
c. BK is the gainer partner
d. AK is the gainer partner
3. A and B are sharing profits and losses equally. With effect from 1st April, 2019, they agree to share profits
in the ratio of 4 : 3. Calculate the individual partner's gain or sacrifice due to the change iinn ratio. (1)
4. X,Y and Z share profits as 5 : 3 : 2. They decide to share their future profits as 4 : 3 : 3 with effect from
April 1, 2019,. On this date the following revaluations have taken place:
Book Value (Rs.) Revised Value (Rs.)
Investments 22,000
,000 25,000
Plant and Machinery 25,000 20,000
Land and Building 40,000 50,000
Outstanding Expenses 5,600 6,000
Sundry Debtors 60,000 50,000
Trade Creditors 70,000 60,000
Pass necessary adjustment entry to be made
made because of the above changes in the values of assets and liabilities.
However old values will continue in the books. (3)
5. Ram, Shyam and Hari were in partnership sharing profits in the ratio of 3 : 2 : 1. The Balance Sheet as at
31.3.2013 was as follows :
BALANCE SHEET
as at 31.3.2013
On 1.4.2013 partners decided to share profits equally. For this purpose it was further agreed that.
a. Goodwill of the firm should be valued at Rs 30,000.
b. Furniture and Machinery is to be revalued at Rs 25,000 and Rs 35,000 respectively.
c. Value of Stock is to be reduced by Rs 4,000.
You are required to give necessary journal entries to give effect to the above arrangement and prepare
Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the firm after reconstitution. (6)
6. X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. They decide to share future
profits and losses in the ratio of 2 : 3 : 5 with effect from 1st April 2019. Following items appear in the
balance sheet as at 31st March 2019.
General Reserve Rs. 75,000 Advertisement suspense A/c(Dr.) 50,000 50,00
Workmen compensation reserve 12,000 Profit and loss Account(Cr.) 37,500 37,50
Pass the necessary journal entries. (2)
7. The profits for the last five years of a firm were as follows –
2013-14 ₹ 1,92,000;(Including Abnormal Gain ₹ 15,000 on profit on the sale of fixed assets)
2014-15 ₹ 95,000; (After debiting Loss of stock by fire ₹75,000)
2015-16 ₹ 1,23,000;(Including interest on Non-trade Investment ₹ 10,000)
2016-17 ₹ 1,30,000. ( Closing Stock overvalued by 10,000 at the end of the financial year 2017)
Calculate the value of goodwill of the firm on the basis of 2 years purchase of average profit for the last four
years. (3)
8. Goodwill is valued at ₹3,00,000 on the basis of 4 years' purchase of super profit.
Average profit = ₹1,90,000
Capital employed = ₹10,00,000
Find the Rate of Return. (3)
