Grade : 12

Subject: Accountancy

Question Bank
1. Niti and Aditi were partners in a firm sharing profits and losses in the ratio of 2:3. They 3
admitted John into partnership for 1/4th share in the profits of the firm, which he acquired
equally from Niti and Aditi. John brought Rs. 5,00,000 as his capital and Rs. 1,00,000 as
premium for goodwill. One-fourth of the goodwill was withdrawn by the old partners. Pass
necessary journal entries for the above transactions in the books of the firm. Also calculate
new profit-sharing ratios.

2. A and B are partners sharing profits in the ratio of 3:2. They admit C into the partnership with 3
1/4th share in future profits. The new profit-sharing ratio is 5:4:3. C brings into the business
Rs. 50,000 for his capital but could not bring any amount for goodwill. The firm's goodwill
on C's admission was valued at Rs. 48,000. Pass journal entries

3. A and B are equal partners with fixed capitals of Rs. 90,000 and Rs. 60,000 respectively. 3
They admit C as a partner with 1/4th share in the profit of the firm. C brings Rs. 16,000 to
acquire his right to share profits of the business and Rs. 80,000 to acquire the right to share
the firm's assets. Give Journal Entries at the time of C's admission.

4. A, B and C are partners sharing profits and losses in the ratio of 9:6:5. D is admitted as a new 3
partner for 1/4th share. B sacrifices 1/20th from his share in favour of D and the rest of the
sacrifice was made by A and C in the ratio of 3:1. Calculate sacrificing ratio and new profit-
sharing ratio.

5. X and Y are partners in a firm sharing profits in the ratio of 5:3. On March 1st 2021, they 4
admitted Z as a new partner. The new profit-sharing ratio will be 4:3:2. Z brought in Rs.
1,00,000 in cash as his share of capital but could not bring any amount for goodwill in cash.
The firm's goodwill on Z's admission was valued at Rs. 1,80,000. X and Y decided that Z can
bring his share of premium for goodwill later or it can be adjusted against his share of profits.
At the time of Z's admission goodwill existed in the books of the firm at Rs. 2,40,000. You
are required to pass necessary journal entries in the books of the firm on Z’s admission.

6. Leeta and Meeta were partners in a firm sharing profits and losses in the ratio of 5:3. On 1st 4
April, 2024 they admitted Omi as a new partner. On the date of Omi's admission, the balance
sheet of Leeta and Meeta showed a balance of Rs. 1,60,000 in General reserve and Rs.
2,40,000 (Cr.) in Profit and Loss Account. Record necessary journal entries for the treatment
of these items on Omi's admission. The new profit-sharing ratio between Leeta, Meeta and
Omi was 5:3:2.

7. A and B are partners in a firm. They admit C as a partner with 1/4th share in the profits of the 4
firm. C brings Rs. 2,00,000 as his share of capital. The value of the total assets of the firm is
Rs. 5,40,000 and outside liabilities are valued at Rs. 1,00,000 on that date. Give the necessary
entry to record goodwill at the time of C’s admission. Also show your working notes.
8. A and B were partners sharing profit and losses in the ratio of 3:2. Their Balance Sheet as at
31st December 2023 was: 4

On 1st January 2024, they agreed to admit C into partnership on the following terms:
(a) C will bring Rs. 80,000 as capital and Rs. 20,000 for his share of goodwill in cash.
(b) The value of Furniture would be increased to Rs. 68,000.
(c) The value of stock would be decreased by Rs. 4,000.
(d) Machinery is to be appreciated by 10%.
(e) There is a liability of Rs. 5,000 included in creditors, that is not likely to arise.
Pass the necessary Journal Entries.

9. Given below is the Balance Sheet of A and B, who are carrying on partnership business as at 6
31st March, 2024. A and B share profits and losses in the ratio of 2:1.

C is admitted as a partner on the date of the Balance Sheet on the following terms:
(a) C will bring in Rs. 1,00,000 as his capital and Rs. 60,000 as his share of goodwill for
1/4th share in profits.
(b) Plant is to be appreciated to Rs. 1,20,000 and the value of Building is to be appreciated by
10%
(c) Stock is found overvalued by Rs. 4,000.
(d) General Reserve will continue to appear in the books of the reconstituted firm at its
original value.
(e) A provision for doubtful debts is to be created at 5% of debtors.
(f) Creditors were unrecorded to the extent of Rs. 1,000. Prepare Revaluation Account,
Partners Capital Accounts and the Balance Sheet of the constituted firm after admission of the
new partners.
10. X and Y are partners sharing profits and losses in the ratio of 3:2. Their Balance Sheet on 31 6
March, 2024 stood as under:

On 1 April, 2024, they admitted Z for 1/4th share in profits on following terms:
(a) Z brings in capital proportionate to his share after all adjustments and Rs. 5,000 for
goodwill out of his share of Rs. 14,000.
(b) Furniture is to be reduced by Rs. 3,000.
(c) Investments are valued at Rs. 36,000.
(d) Half of the plant and machinery is taken over by X and Y in their profit-sharing ratio.
(e) New profit-sharing ratio is agreed at 3:3:2.
(f) Capitals of X and Y will be adjusted in their profit-sharing ratio by bringing in or paying
off cash.
Prepare Revaluation Account and Capital Accounts after Z's admission.

11. Charu and Harsha were partners in a firm sharing profits in the ratio of 3:2. On 01.04.2024, 6
their Balance Sheet was as follows:

On the above date, Vaishali was admitted for 1/4th share in the profits of the firm on the
following terms:
(a) Vaishali will bring Rs. 20,000 for her capital and Rs. 4,000 for her share of goodwill
premium.
(b) All debtors were considered good. (c) The market value of investments was Rs. 15,000.
(d) There was a liability of Rs. 6,000 for workmen compensation. (e) Capital accounts of
Charu and Harsha are to be adjusted based on Vaishali's capital by opening current accounts.
Prepare Revaluation Account and Partners' Capital Accounts.
12. A,B and C sharing profits and losses in the ratio of 5:3:2.They decide to share the profits and 6
losses in the ratio of 2:3:5 with effect 1st April ,2023.They also decide to record the effect of
the following without affecting their book values, by passing an adjustment entry. Book
values Rs. General Reserve 1,50,000 Contingency Reserve 25,000 Profit and loss A/c (Cr)
75,000 Advertisement Suspense a/c (Dr) 1,00,000. Show your workings clearly. Aman, Prabu
and Vinay are in partnership sharing profits in the ratio of 4 : 3 : 1. Prabu takes retirement on
30th June 2019. The firm’s profits for various year were : 2014 (profit Rs.3,24,444), 2015
(profit Rs.80,000), 2016 (profit Rs.10,000), 2017 (loss Rs.10,000), 2018 (profit Rs.40,000)
and 2019 (profit Rs.50,000). Aman and Vinay decided to share future profits in the ratio of 3 :
2. Goodwill is to be Valued based on 2 years Rs.’ purchase of average profit of 4 completed
year immediately preceding the year of retirement of a partner. Pass the journal entry to
record Prabu’s share of goodwill.

13. X ,Y and Z are partners in a firm sharing profits and losses in the ratio of 5:3:2. Their fixed 3
capital were Rs. 3,00,000.Rs. 2,00,000 and Rs. 1,00,000 respectively. For the year ended 31st
march ,2023, interest on capital was credited to them @10% p.a instead of 8% p.a. Pass
necessary adjustment journal entry. Show your working notes clearly. Average profit of the
firm is Rs. 1,50,000 .Total tangible assets in the firm are Rs. 14,00,000 and outside the
liabilities are Rs. 4,00,000.In the same type of business, the normal rate of return is 10% of
the capital employed. Calculate the value of goodwill by capitalising of super profit method.

14. A,B And C were partners. their fixed capitals were Rs. 60,000 , Rs. 40,000 and Rs. 20,000 3
respectively. Their profit-sharing ratio was 2:2:1. According to the Partnership Deed they
were entitled to interest on capital @5%p.a. In addition, B was also entitled to draw a salary
of Rs. 1,500 per month. C was entitled to a commission of 5% on the profits after charging
interest on capital, but before charging the salary payable to B. The net profits for the year
were Rs. 80,000 were distributed in the ratio of their capitals without providing for any of the
above adjustments. Showing your workings clearly, pass the necessary adjustment entry.

15. Atul and Mithun are partners sharing profits in the ratio 3:2. Balances as on 1st April 2023 4
were as follows: Capital Accounts ( Fixed): Atul- Rs. 5,00,000 and Mithun- Rs. 6,00,000
Loan Accounts: Atul- Rs. 3,00,000 (Cr.) and Mithun- Rs. 2,00,000 (Dr.) It was agreed to
allow and charge interest @8%p.a. Partnership deed provided to allow interest on capital
@10% p.a. Interest on Drawings was charged Rs. 5000 each. Profit before giving effect to
above was Rs. 2,28,000 for the year ended 31st March 2024. Prepare Profit and Loss
Appropriation Account.

16. A and B are partners in a firm. They admit C as a partner with 1/4th share in the profits of the 4
firm. C brings Rs. 2,00,000 as his share of capital. The value of the total assets of the firm is
Rs. 5,40,000 and outside liabilities are valued at Rs. 1,00,000 on that date. Give the necessary
entry to record goodwill at the time of C’s admission. Also show your working notes.

17. Wahid and Shaheed are equal partners. Their capitals are Rs.40,000 and Rs.80,000 4
respectively. After the accounts for the year are prepared, it is discovered that interest at 10%
p.a. as provided in the partnership agreement has not been credited in the capitol accounts
before distribution of profits. It is decided to make an adjusting entry at the beginning of the
next year. Give the necessary Journal Entry.
18. Ram, Mohan and Sohan were partners sharing profit in the ratio of 2:1:1.Ram withdrew 3
Rs.3,000 every month and Mohan withdrew Rs.4,000 every month. Interest on drawings @
6%p.a was charged whereas the partnership deed was silent about interest on drawings.
Showing your working clearly, pass the adjustment entry.
19. A firm earned net profits during the last five years 1- Rs.7,000: 11 - 6,500: 111-Rs.8,000; IV- 3
Rs.7,500; V- Rs.6,000 The capital investment of the firm is Rs.40.000. A fair return on capital
in the market is 12%. Find out the value of goodwill of the business, if it is based on 3 years
purchase of average super profits of the past five years.

20. The books of Ram and Bharat showed that the capital employed on 31.12.2002 was Rs. 5, 3
00,000 and the profit for the last 5 years: 2002 Rs.40,000; 2003 Rs.50,000: 2004 Rs.55,000;
2005Rs. 70,000 and 2006Rs. 85,000. Calculate the value goodwill based on 3 years purchase
of the average super profits of the last 5 years assuming that the normal rate of return is 10%.
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