MARKING SCHEME

First Term Examination 2023-24

Accountancy (055)
Class XII

1. Revaluation of assets at the time of reconstitution is necessary because their present value may
be different from their:
a) Market Value.
b) Net Value.
c) Cost of Asset
d) Book Value

Ans d) Book Value

2. A, B and C are partners, their partnership deed provides for interest on drawings at 8% p.a . B
withdrew a fixed amount in the middle of every month and his interest on drawings amounted to
₹4,800 at the end of the year. What was the amount of his monthly drawings?
a) ₹10,000.
b) ₹5,000.
c) ₹1,20,000.
d) ₹48,000.

Ans a) ₹10,000
3. At the time of reconstitution of a partnership firm, recording of an unrecorded liability will lead
to:
a) Gain to the existing partners
b) Loss to the existing partners
c) Neither gain nor loss to the existing partners
d) None of the above .
Ans b) Loss to the existing partners

4. Which of the following is true regarding Salary to a partner when the firm maintains fluctuating
capital accounts?
a) Debit Partner’s Loan A/c and Credit P & L Appropriation A/c.
b) Debit P & L A/c and Credit Partner’s Capital A/c.
c) Debit P & L Appropriation A/c and Credit Partner’s Current A/c.
d) Debit P & L Appropriation A/c and Credit Partner’s Capital A/c.
Ans d) Debit P & L Appropriation A/c and Credit Partner’s Capital A/c.

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5. Kalki and Kumud were partners sharing profits and losses in the ratio of 5:3. On 1st April,2021
they admitted Kaushtubh as a new partner and a new ratio was decided as 3:2:1. Goodwill of the firm
was valued as ₹3,60,000. Kaushtubh couldn’t bring any amount for goodwill. Amount of goodwill
share to be credited to Kalki and Kumud Account’s will be: -
a) ₹ 37,500 and ₹22,500 respectively
b) ₹ 30,000 and ₹30,000 respectively
c) ₹ 36,000 and ₹24,000 respectively
d) ₹ 45,000 and ₹15,000 respectively
Ans c) ₹ 45,000 and ₹15,000 respectively
6. Given below are two statements, one labeled as Assertion (A) and the other labeled as Reason
(R)
Assertion (A): Transfer to reserves is shown in P & L Appropriation A/c.
Reason (R): Reserves are charge against the profits.
In the context of the above statements, which one of the following is correct?
a) (A) is correct, but (R) is wrong.
b) Both (A) and (R) are correct.
c) (A) is wrong, but (R) is correct.
d) Both (A) and (R) are wrong.
Ans a) (A) is correct, but (R) is wrong.

7. Ashok and Sudha were partners in a firm sharing profits and losses in the ratio of 3 : 1. They
admitted Bani as a new partner. Ashok sacrificed 1/4 th of his share and Sudha sacrificed 1/4 th of her
share in favor of Bani. Bani's share in the profits of the firm will be:
a) 5/8
b) 1/8
c) 1/4
d) 7/16
Ans c) 1/4

8. If average capital employed in a firm is ₹8,00,000, average of actual profits is ₹1,80,000 and
normal rate of return is 10%, then value of goodwill as per capitalization of average profits is:
a) ₹10,00,000
b) ₹18,00,000
c) ₹80,00,000
d) ₹78,20,000

Ans a) ₹10,00,000

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9. The profits for the previous three years are given below: 2018-2019 ₹23,000 (including an
abnormal gain of ₹8,000) 2019-2020 ₹40,000 (after charging an abnormal loss of ₹12,000) 2020-
2021 ₹38,000 (after writing off bad debts amounting to ₹6,000) The amount of goodwill at two years
purchase of the average profits of the last three years will be ___________.
a) ₹65,000
b) ₹70,000
c) ₹ 68,000
d) ₹35,000 [1]
Ans b) ₹70,000

10. Revaluation A/c is :

a) Real account
b) Asset account
c) Personal account
d) Nominal account [1]
Ans d) Nominal account

11. Interest on partner’s drawings will be credited to :

a) Profit and Loss Account
b) Profit and Loss Appropriation Account
c) Partner’s Capital Accounts
d) None of the Above
Ans b) Profit and Loss Appropriation Account

12. The reconstitution of a firm may be-

a) In case of change in profit and loss sharing ratio among the existing partners
b) In case of admission of a new partners
c) Retirement or death of an existing partners
d) In case of all of the above conditions
Ans d) In case of all of the above conditions

13. Goodwill is a …………………..

a) Current asset
b) fictitious asset
c) intangible asset
d) none of the above

Ans c) intangible asset

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 14. X Y and Z are partners sharing profits and losses in the ratio 5 : 3 : 2. They decide to share the
future profits in the ratio 3 : 2 : 1. Workmen compensation reserve appearing in the balance sheet on
the date if no information is available for the same will be :
a) Distributed to the partners in old profit sharing ratio
b) Distributed to the partners in new profit sharing ratio
c) Distributed to the partners in capital ratio
d) Carried forward to new balance sheet without any adjustment

Ans a) Distributed to the partners in old profit sharing ratio

15. On the admission of a new partner :

a) Old firm is dissolved
b) Old partnership is dissolved
c) Both old partnership and firm are dissolved
d) Neither partnership nor firm is
Ans b) Old partnership is dissolved

Read the following hypothetical situation and answer the questions number 16 and 17 on the
basis of information given:
Anu , Charu and Divya are partners sharing profits and losses in the ratio of 2:1:2 . Their
capitals were ₹5,00,000 , ₹3,00,000 and ₹2,00,000 respectively . Anu Personally guaranteed
that in any year , Divya share of profit after interest on capital to all partners @ 5% p.a would not
be less than ₹75,000 . The profit for the year ending 31st March ,2022 amounted to₹ 2,00,000.
16. Divya’s amount of guarantee is short by the following amount :
a) ₹75,000
b) ₹5,000
c) ₹15,000
d) ₹20,000
Ans c) ₹15,000

17. The final amount of profit distributed among the partners after adjustment of gurantee
will be :
a) Anu ₹50,000 , Charu₹ 25,000, Divya ₹75,000
b) Anu ₹55000 , Charu ₹30,000, Divya₹ 65,000
c) Anu ₹57,000 , Charu ₹28,000, Divya ₹65,000
d) Anu ₹45,000 , Charu ₹30,000, Divya ₹ 75,000

Ans d) Anu ₹45,000 , Charu ₹30,000, Divya ₹ 75,000

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18. A, B and C were partners sharing profits and losses in the ratio of 7 : 3 : 2. From 1st
January, 2019 they decided to share profits and losses in the ratio of 8:4:3. Goodwill is
₹1,20,000. In Adjustment entry for goodwill:
a) Cr. A by₹ 6,000; Dr. B by₹ 2,000; Dr. C by ₹4,000
b) Dr. A by ₹6,000; Cr. B by₹ 2,000; Cr. C by₹ 4000
c) Cr. A by ₹6,000; Dr. B by₹ 4,000; Dr. C by ₹2,000
d) Dr. A by ₹6,000; Cr. B by₹ 4,000; Cr. C by ₹2,000

Ans c) Cr. A by ₹6,000; Dr. B by₹ 4,000; Dr. C by ₹2,000

19. A and B were partners in a firm sharing profit or loss in the ratio of 3 : 1. With effect
from Jan. 1, 2019 they agreed to share profit or loss in the ratio of 2 : 1. Due to change in
Profit & Loss sharing ratio , B’s gain or sacrifice will be :
a) Gain 1/12
b) Sacrifice 1/12
c) Gain 1/3
d) Sacrifice 1/3

Ans a) Gain 1/12

20. Yash and Manan are partners sharing profits in the ratio of2:1. They admit Kushagra into
partnership for 25% share of profit. Kushagra acquired the share from old partners in the
ratio of 3:2. The new profit sharing ratio will be:
a) 14:31:15
b) 3:2:1
c) 31:14:15
d) 2:3:1
Ans c) 31:14:15
21. Arun & Barun are partners sharing profits in the ratio of 3:2 . Their capital were ₹50,000
& ₹30,000 respectively. Partnership deed provided for Interest on capital @6%p.a Arun &
Barun and quarterly salary of ₹1,000 to Barun . Arun had given loan of ₹ 1,00,000 on 1st
October ,2021 to the firm without any agreement about interest . For the year 2021-22 , the
profits earned ₹26,800 .
Prepare Profit & loss appropriation A/c of the firm for the year ended 31st March, 2022. [3]
Profit & loss appropriation A/c of the firm for the year ended 31st March, 2022.

Particulars Amount ₹ Particulars Amt ₹

To Int on capital By Net profit 23,800 )1/2
Arun capital 3,000 ( 26,800 – 3000)
Barun capital 1,800(1)
To Barun salary 4,000 1/2
( 1000 x4)
To Profit distributed 15,000 1/2
Arun capital 9,000
Barun Capital 6,000

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 23,800 23,800
Int on loan
1,00,000x6/100 x6/12
=3,000 1/2

OR

Banwari and Purohit are partners sharing profits and losses in the ratio of 5:3. They
contributed capital of ₹ 6,00,000 and ₹ 4,00,000 respectively. As per the partnership deed,
the partners are to be allowed an interest on their capitals @ 6% p.a. Net profit (before
providing for interest on capitals) for the year ended 31st March 2020 was ₹ 42,000.
Show distribution of profits
Profit & Loss appropriation A/c for the year ended 31st March,2020

Particulars Amt Particulars Amt ₹

By Net profit 42,000
To Int on capital
Banwari capital 25,200
Purohit capital 16,800

42,000 42,000

Int on capital Banwari Rs

36,000
Purohit Rs 24,000 Ratio 3:2

22. Average profit earned by a firm is ₹ 75,000 which includes undervaluation of stock of
₹ 5,000 on average basis. The capital invested in the business is ₹ 7,00,000 and the normal
rate of return is 7% p.a .Calculate the amount of goodwill on the basis of 5 times the super
profit . [3]

Average profit 75,000 + Stock 5,000 80,000

Normal profit = capital employed X Normal rate
/100
7,00,000 x7/100 = 49,000
Super profit = Average profit – Normal profit
80,000 -49,000 = 31,000
Goodwill = 31,000 x5 = 1,55,000

23. A, B and C are partners sharing profits in the ratio 1:2:3. On 1.4.2016 they decided to

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 share profits equally. On that date there was credit balance of ₹ 1,20,000 in their Profit
and loss Account and balance of ₹ 1,80,000 as Reserve Account, Advertising suspense ₹
60,000.Instead of closing the Reserve Account and Profit and Loss Account, Advertising
suspense . Pass necessary Journal entry ( Show your working )

Sacrifice share = old share – New share

A = 1/6 – 1/3 = 1/6 - 2/6 = 1/6 (G)
B = 2/6 – 1/3 = 2/6 – 2/6 = 0
C = 3/6 – 1/3 = 3/6 – 2/6 = 1/6 (s)
Adjustment of net effect of P & L , Reserve and
advertisement suspense
P&L A/c 1,20,000
Reserve 1,80,000
Less Advertisement suspense 60,000
2,40,000
A capital A/c …dr 40,000
To C capital A/c 40,000
( Being ………………………………)
[3]

24. A and B are partners sharing profits and losses in the ratio of 5 : 3. On 1st April, 2019,
C is admitted to the partnership for 1/4th share of profits. For this purpose, goodwill is to be
valued at two years' purchase of last three years' profits (after allowing partners' remuneration).
Profits to be weighted 1 : 2 : 3, the greatest weight being given to last year. Net profit before
partners' remuneration were: 2016-17 : ₹ 2,00,000; 2017-18 : ₹ 2,30,000; 2018-19 : ₹ 2,50,000.
The remuneration of the partners is estimated to be ₹ 90,000 p.a. Calculate amount of goodwill.

Year ended Profit Weight Weighted profit

2016-17 2,00,000 - 90,000 = 1,10,000 1 1,10,000
2017 -18 2,30,000 – 90,000 = 1,40,000 2 2,80,000
2018-19 2,50,000 -90,000 = 1,60,000 3 4,80,000
6 8,70,000

Weighted Average profit = total

weighted profits / Total of weights
8,70,000/6 = 1,45,000
Weighted Average profit X Number
Goodwill = of years purchases
1,45,000 x 2 = 2,90,000

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25. Bhavya & Sakshi are partners in a firm , sharing profit and losses in the ratio of 3:2 . On
st
31 March,2018 their Balance sheet was as under :

Liabilities Amt ₹ Assets Amt ₹

Sundry creditors 13,800 Furniture 16,000
General Reserve 23,400 Land & Building 56,000
Investment Fluctuation 20,000 Investment 30,000
Fund Trade Receivable 18,500
Bhavya capital 50,000 Cash in hand 26,700
Sakshi capital 40,000
1,47,20
0 1,47,200

The Partners have decided to change their profit sharing ratio 1:1 with immediate effect. For the
purpose , they decided that :
a) Investment is valued at ₹20,000
b) General reserve is not distributed between the partners
c) You are required to pass Journal entries and show your workings .[3]

Journal entries in the books Bhavya & Sakshi

Date Particulars l.f

31st March IFR A/C ……………DR 20,000
To Investment 10,000
To Bhavya capital 6,000
To sakshi capital 4,000
( Being ……………. )

Sakshi capital A/c ..dr 2400

To bhavya capital A/c 2400
(24,000x1/10)
( Being adjustment of
goodwill )

(23,400x1/10
) Sakshi capital A/c .. dr 2,340
To bhavya capital A/c 2,340
( Being adjustment of
reserve )
Sacrificeshare Old share – new share
1/10
B 3/5 – 1/2 = 6-5/10
S 2/5 -1/2 = 4/10 – 5/10 1/10(g)

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26. Anu and Shweta are partners in a firm. They admit Anuj as a new partner with 1/5th
share in the profits of the firm. Anuj bring ₹5, 00, 000 as his share of capital. The value of the
total assets of the firm was ₹15, 00,000 and outside liabilities were valued at ₹5,00,000 on that
date. Give necessary Journal entries to record goodwill at the time of Anuj admission. Also
show your workings clearly assuming that the new partner does not bring goodwill in cash. [3]

Total capital of the new firm = ₹5,00,000 x5/1 = 25,00,000

Capital of Anu and Shweta = ₹15,00,000 -5,00,000 = 10,00,000
Total capital of the new firm = ₹10,00,000 + ₹5,00,000 =
15,00,000
Goodwill = ₹25,00,000 – ₹15,00,000 = ₹10,00,000
Anuj share of goodwill = ₹10,00,000 x1/5 = ₹2,00,000
₹ ₹
Cash A/c …dr 5,00,000
To Anuj capital A/c 5,00,000

Anuj current A/c …dr 2,00,000

To Anu capital A/c 1,00,000
To Swetha capital A/c 1,00,000
( being ……………….. )

27. A, B, C are partners in a firm. On 1.4. 2018 their capital stood at ₹50,000, ₹ 25,000, and
₹ 25,000 respectively. As per the provision of the partnership deed;
a) C is entitle for a salary of ₹ 5,000 p.a
b) Partners were entitled to interest on capital at 5% p.a.
c) Profits were to be shared in the ratio of partners’ capital.
The net profit for the year 2007-08 of ₹ 33,000 divided equally without providing the above
adjustment. Pass adjusting entry. Statement showing adjustment . [4]
A cap B cap C cap firm
Particulars
dr₹ cr₹ dr cr dr cr dr cr
Profit 11,000 11,000 11,000 33,000
Salary 5000 5,000
Int on cap 2500 1250 1250 5000
Profit 2:1:1 11,500 5750 5750 23,000
11,000 14,000 11,000 7,000 11,000 12,000 33,000 33,000
3000 cr 4000dr 1000cr

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 ₹ ₹
Particulars L.f Dr Cr
B cap A/c …dr 4,000
To A cap 3,000
To c cap 1,000
( being ……………… )

28. X, Y and Z share profits as 5 : 3 : 2 . They decide to share their future profits as 4 : 3 : 3
with effect from 1st April, 2018. On this date the following revaluations have taken place
Book Value (₹ ) Revised Value (₹ )
Investments 22,000 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 because of the above changes in the values of assets
and liabilities . However, old values will continue in the books . [4]
Journal
Debit Credit
Date Particulars L.F. Amount Amount
(₹) (₹)
2019
April Z’s Capital Dr.
1 760
A/c
To X’s 760
Capital A/c
(Adjustment of revaluation
profit made)

Working Notes:

WN 1 Calculation of Net Profit or Loss on Revaluation

Amount
Particulars
(₹)
Increase in Investment 3,000
(Cr.)
Decrease in Plant and (5,000)
Machinery (Dr.)
Increase in Land and Building 10,000
(Cr.)
Increase in Outstanding (400) (Dr.)
Expenses

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 Decrease in Sunday Debtors (10,000)
(Dr.)
Decrease in Trade Creditors 10,000
(Cr.)
Profit on Revaluation 7,600
(Cr.)

WN 2 Calculation of Sacrificing (or Gaining) Ratio

Old Ratio (X, Y and Z) = 5 : 3 : 2

New Ratio (X, Y and Z) = 4 : 3 : 3

Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio

WN 3 Adjustment of Revaluation Profit

29. Rita and Tina are partners in the ratio of 3:2. Sunita joins the firm. Rita surrenders
th
1/10 from her share and Tina surrenders 1/10 from her share in favor of Sunita. Sunita brings
₹ 20,000 as capital and ₹3,000 as premium out of his share of ₹4,500 . Give necessary journal
entries & Calculate new profit sharing ratio. [4]
Date Dr Amt Cr Amt
Particulars L.f ₹
Cash A/c …dr 23,000
To Sunita’s capital A/c 20,000
To Premium for goodwill A/c (1) 3,000
( capital & goodwill bought in
cash )
Premium for goodwill A/c …dr (2) 3,000
Sunita current A/c …dr 1,500

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 To Rita Capital a/c 2250
To Tina’s capital a/c 2250
New ratio
Old share – surrender share (1)
R = 3/5 -1/10 = 6-1/10 =5/10
T = 2/5 – 1/10 = 4-1/10 = 3/10
5:3:2
OR
Amit & Sumit are Partners sharing profits in the ratio 2:1 . Anjali is admitted for 1/3 rd share which
she acquires equally from Amit & Sumit . Anjali brings ₹2,00,000 as capital & ₹60,000 as his
share of premium for Goodwill . 60% of premium for goodwill was withdrawn by the partners .
Goodwill
appearing in the books amounting ₹90,000.
Pass necessary journal entries.

₹ ₹
Amit capital A/c …dr 60,000
Sumit capital A/c ..dr 30,000
(1
To Goodwill A/c ) 90,000
( Being goodwill written off
2:1
(1
Cash A/c …dr ) 2,60,000
To Anjali capital A/c 2,00,000
To premium for goodwill A/c 60,000
( Being ………………… )

(1
Premium for goodwill A/..dr ) 60,000
To Amit capital A/c 30,000
To Sumit capital A/c 30,000
( Being ………………. )

(1
Amit capital A/c …dr ) 18,000
Sumit capital A/c …dr 18,000
To cash A/c 36,000
( 60,000 x60/100)
( Being Goodwill withdrawn
in cash )

30. Anita, Binita and Disha are partners in a firm. On 1 st April 2019, the balance in their
capital accounts stood at ₹ 3, 00,000, ₹ 6, 00, 000 and ₹ 4, 00,000 respectively. They shared profits
in proportion of 7:3:2 respectively. Partners are entitled to interest on capital @ 5% p.a. and salary

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to Binita ₹ 50,000 p.a. and commission of ₹ 3,000 per quarter to Disha as per the provision of
partnership deed. Binita’s share of profit (excluding interest on capital) is guaranteed at not less
than ₹ 1, 70,000. Disha’s share of profit (including interest on capital but excluding salary) is
guaranteed at not less than ₹ 1,80,000 p.a. Any deficiency arising on the account shall be met by
Anita. The profits of the firm for the year ended 31st March 2020 amounted to ₹ 9, 50,000.
Prepare Profit & Loss appropriation Account for the year ended 31st March, 2020. [6]

Profit & Loss appropriation Account for the year ended 31st March, 2020.
Particulars Amount Particulars Amount
Int on capital By Net profit (1/2) 9,50,000
Ainta Capital 18,000
Binita Capital (1/2) 36,000
Disha capital 24,000

To salary
Binita capital(1/2 50,000

To Commission(1/2) 12,000
Disha capital

To divisible profit (3)

Anita 4,72,500 – 21,000 4,51,500
Deficiency in Disha share of
profit
Binita 2,02,500 2,02,500
Disha 1,35,000 + 21,000 =
1,56,000 + deficiency in profit 1,80,000
share by Anita 21,000 9,50,000

9,50,000

OR
A, B and C are partners in a firm sharing profits and losses in the ratio of 2:2:1. Their fixed
capitals were ₹ 5, 00,000 ₹ 4, 00,000 and ₹ 3, 00,000 respectively. For the year ending March,
31st 2019 the profit of the firm was ₹ 6, 00,000. It was subsequently discovered that following
transactions were omitted:
 Interest on capital @ 10%p.a.
 Salary to A ₹60,000.
 Commission to B ₹ 20,000.
 C had been guaranteed a minimum profit of ₹ 1,20,000.
Pass necessary Adjusting Journal entry ( Show your working clearly )

Particulars A current (₹) B current(₹) C current(₹) Firm ₹

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 Dr Cr Dr cr dr cr dr cr
Profit ( 2:2:1) 2,40,000 2,40,000 1,20,000 6,00,000
Interest on capital 50,000 40,000 30,000 1,20,000
Salary 60,000 60,000
Commission 20,000 20,000

Correct Profit
(2:2:1) Cr 1,40,000 1,40,000 1,20,000 4,00,000
Net effect 2,40,000 2,50,000 2,40,000 2,00,000 1,20,000 1,50,000 4,00,000 4,00,000
10,000(cr 40,000
) (dr) 30,000(cr)
Working Note
Corrected profit 4,00,000

A share of profit 1,60,000

Less C share of …. 20,000

B share of profit 1,60,000

Less c’s share of deficiency 20,000
C share of profit 80,000
Add deficiency borne by A 20,000
Add deficiency borne by B 20,000
B ‘s current A/c… 40,00
dr 0
To A Current A/c 10,000
To C Current A/c 30,000
( Being ….)

31. Raman and Rohit were partners in a firm sharing profits and losses in the ratio of 2:1.
On 31st March, 2018, their Balance Sheet was as follows:

Liabilities Amt ₹ Assets Amt ₹

Capital : Plant and Machinery 1,75,000
Raman : 1,40,000 Furniture and Fixtures 65,000
Rohit: 1,00,000 2,40,000 Stock 47,000
Workmen Compensation 40,000 Debtors 1,10,000 1,03,000
Fund Less : P.D.D 7,000
Creditors 1,60,000 Bank Balance 50,000

4,40,000 4,40,000

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 On the above date, Saloni was admitted 1/3rd share in the partnership firm. It was agreed that:
(i) Plant and machinery will be reduced by ₹35,000 and furniture and fixtures will be
reduced to ₹58,500.
(ii) Bad debts amounted to ₹3,000.Provision for bad and doubtful debts will be 5% on
debtors
(iii) A claim for ₹ 16,000 for workmen’s compensation was admitted.
(iv) A liability of ₹2,500 included in creditors is not likely to arise.
(v) Saloni will bring ₹ 42,000 as her share of goodwill premium and capital of ₹ 50,000.
Prepare Revaluation Account, Partners’ Capital Accounts and show the working
clearly.

Revaluation A/c (4)

Particulars Amt ₹ Particulars Amt ₹
By creditors (1/2) 2500
To Plant A/c(1/2) 35,000 By Loss on revaluation (2:1) 40,350
To Furniture (1) 6,500 Raman capital 26,900 (1)
To P.D.D (1) 1350 Rohit capital 13,450
42,850 42,850

Capital A/c (4)

Saloni
Particulars Raman ₹ Rohit ₹ ₹ Particulars Raman ₹ Rohit ₹ Saloni ₹
To Loss on revaluation
A/c (1/2) 26,900 13,450 By Balance b/d (1/2) 1,40,000 1,00,000
By Bank A/c (1/2) 50,000
BY premium for
To Balance c/d 1,57,100 1,08,550 50,000 goodwill (1.5) 28,000 14,000
By W.C.R (1) 16,000 8,000
1,96,000 1,28,000 50,000 1,84,000 1,22,000 50,000

32. Dina , Sheena and Nisha are partners sharing profits and losses in the ratio of 3:2:1. With
effect from 1st April, 2022 they agree to share profits equally. For this purpose, goodwill is to
be valued at two year’s purchase of the average profit of last four years which were as follows:
a) Year ending on 31st March, 2019 ₹ 50,000 (Profit) ( Including abnormal loss ₹10,000)
b) Year ending on 31st March, 2020 ₹ 1,20,000 (Profit) ( Including Gain on sale of fixed
assets 20,000)
c) Year ending on 31st March, 2021 ₹ 1,80,000 (Profit)
d) Year ending on 31st March, 2022 ₹ 70,000 (Loss)
On 1st April, 2021 a Motor Bike costing ₹ 60,000 was purchased and debited to traveling
expenses account, on which depreciation is to be charged @ 25% p. a by Straight Line Method.
The firm also paid an annual insurance premium of ₹ 20,000 which had already been charged to
Profit and Loss Account for all the years. Journalize the transaction along with the working note

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 Year ended Profit Normal profit
31st March 2019 50,000 +10,000 60,000
31st March 2020 1,20,000 –20,000 1,00,000
31st March ,2021 1,80,000 1,80,000
(70,000) + 60,000
31st March,2022 – 15,000 (25,000)
3,15,000
3,15,000/4=
Average profit 78,750

S/R = Old – new ratio

Dina 3/6 – 1/3 1 /6
Sheena 2/6-1/3 0
Nisha 1/6 -1/3 1/6(G)

NishacapitalA/
c……….dr 13,125
To Dina cap A/c 13,125
( being ……………… )

33. A, B and C are partners sharing profits and losses in the ratio 3:3:2. Their balance sheet as at
st
31 March, 2003 was as follows:
Liabilities Amount(₹ Assets Amount (₹)
)
Sundry creditors 28,000 Cash at Bank 37,000
General Reserve 32,000 Sundry Debtors 44,000
Capital Account: Stock 1,20,000
A: 2,00,000 Machinery 1,59,000
B: 1,50,000 Building 2,00,000
C: 1,50,000 5,00,000
5,60,000 5,60,000

Partners decided that with effect from 1st April 2003, they would share profits and losses
in the ratio equally. It was agreed that:
a) Stock is valued at ₹1, 00,000.
b) Machinery is to be depreciated by 10%.
c) A provision for doubtful debts is to be made on debtors @ 5% p.a
d) Building to be appreciated by 20%.
e) One month Salary ₹2,000 is still outstanding .
f) Claim for compensation amounted to ₹14,500
g) Good will of the firm valued at ₹1,80,000
Pass necessary journal entries due to change in profit sharing ratio

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Date Particulars L.f Dr ₹ Cr₹
2003
31st March General Reserve A/c …dr 32,000
To A cap A/c 12,000
To B cap A/c 12,000
To C cap A/c 8,0000
( G/r distributed opsr ) (1/2)

Bldg A/c ………………..dr (1/2) 40,000

To revaluation A/c 60,000
(inc in assets credited to
revaluation a/c )
Revaluation a/c…dr (2) 54,600
To machinery A/c 15,900
To PDD A/c 2200
To O/s Salary A/c 2000
To claim for workmen
compensation A/c 14,500
To Stock 20,000

A cap A/c …dr (1) 5475

B cap A/c …dr 5475
C cap A/c …dr 5475
To revaluation A/c 14,600

A= 3/8-1/3 = 1/24 1
B = 3/8 – 1/3 = 1/24
C = 2/8 -1/3 = 2/24(G)

C capital A/c …dr 1/2 15,000

To A capital A/c 7500
To B capital A/c 7500
( adjustment of goodwill )

34. Astha & Gomati are partners sharing profits in the ratio of 3:2. Their Capitals
accounts as on 1st April, 2019 stand at ₹1,50,000 and ₹ 1,60,000 respectively.

a) Partners allowed Interest on capital @10%p.a.

b) Astha will get salary of ₹ 2000 per quarter
c) Gomati will get commission of 10% of sales .
d) Drawings of the partners during the year ended 31st March, 2012 amounted to

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 e) ₹ 20,000 and ₹ 10,000 respectively.
f) Interest is charged on drawings at the rate of 10% p.a.
g) Astha has given loan to firm as on 1st November ,2019 of ₹ 50,000.
h) The profit of the firm before above adjustments was ₹1,80,000. Sales for the year
ended are ₹ 2,00,000.
i) 10% of net profit is to be kept in Reserve Account. Current A/c balances on 1st
April, 2019 were Astha ₹ 5,000(Cr) Gomati ₹ 3,000(Dr).

Prepare profit &loss appropriation account and Partner’s Current & Capital A/c for the year
ended 31 March, 2020

Profit & Loss Appropriation A/c for the year ended 31st March 2020(3 Marks )
Particulars Amt ₹ Particulars Amt₹
By Net profit
To Interest on capital 1,80,000 1,78,750
Less Interest on Loan
Astha current A/c 15,000 1,250
Gomati current A/c 16,000 (1/2) (50,000 x 6/100x5/12)
(1/2)
To Astha salary 8,000(1/2) BY Interest on drawings
Astha current A/c 1,000
To Gomati commission 20,000(1/2) Gomati current A/c 500
( 2,00,000 x 10/100 ) (1/2)
To Reserve 17,875(1/2)
To Divisible profit (3:2) 1,03,375
Astha current A/c 62,025(1/2)
Gomati current A/c 41,350
1,80,250 1,80,250

Capital A/c (1/2)

Particulars Astha ₹ Gomati₹ Particulars Astha ₹ Gomati₹
To Balance c/d 1,50,000 1,60,000 By Balance b/d 1,50,000 1,60,000

1,50,000 1,60,000 1,50,000 1,60,000

Current A/c (2.5)

Particulars Astha ₹ Gomati ₹ Particulars Astha ₹ Gomati₹
To Balance b/d (1/4) 3,000 By Balance b/d (1/4) 5,000
By Interest on capital
To drawings (1/2) 20,000 10,000 (1/2) 15,000 16,000
To Interest on drawings
(1/2) 1,000 500 By salary(1/2) 8000

To Balance c/d (1/2) 68,950 63,850 By commission(1/2) 20,000

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 62,025
By P&L app A/c (1/4) 41,350
89,950 77,300 90,025 77,350

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