SRV BOYS & HI-TECH HR SEC SCHOOL

MODEL UNIT TEST - ACCOUNTANCY

XII MARKS:90

PART-A
Note : i)Answer all the questions. 20 x 1= 20
ii)Choose the most suitable answer

1. Which of the following statements is true?

(a) Goodwill is an intangible asset (b) Goodwill is a current asset
(c) Goodwill is a fictitious asset (d) Goodwill cannot be acquired
2. The average rate of return of similar concerns is considered as
(a) Average profit (b) Normal rate of return
(c) Expected rate of return (d) None of these
3. Which of the following is true?
(a) Super profit = Total profit / number of years
(b) Super profit = Weighted profit / number of years
(c) Super profit = Average profit – Normal profit
(d) Super profit = Average profit × Years of purchase
4. When the average profit is Rs. 25,000 and the normal profit is Rs. 15,000, super profit
(a) Rs.25,000 (b) Rs. 5,000 (c)Rs. 10,000 (d)Rs. 15,000
5. The total capitalised value of a business is Rs.1,00,000; assets are Rs.1,50,000 and
liabilities are Rs. 80,000. The value of goodwill as per the capitalisation method will
(a) Rs. 40,000 (b)Rs.70,000 (c)Rs. 1,00,000 (d) Rs. 30,000
6. On revaluation, the increase in the value of assets leads to
(a) Gain (b) Loss (c) Expense (d) None of these
7. The profit or loss on revaluation of assets and liabilities is transferred to the capital
account of
(a) The old partners (b) The new partner
(c) All the partners (d) The Sacrificing partners
8. At the time of admission, the goodwill brought by the new partner may be credited to
the capital accounts of
(a) all the partners (b) the old partners
(c) the new partner (d) the sacrificing partners
9. Select the odd one out
(a) Revaluation profit (b) Accumulated loss
(c) Goodwill brought by new partner (d) Investment fluctuation fund
10. James and Kamal are sharing profits and losses in the ratio of 5:3. They admit Sunil
as a partner giving him 1/5 share of profits. Find out the sacrificing ratio.
(a) 1:3 (b) 3:1 c) 5:3 (d) 3:5
11. A partner retires from the partnership firm on 30th June. He is liable for all
the acts of the firm up to the
(a) End of the current accounting period
(b) End of the previous accounting period
(c) Date of his retirement
(d) Date of his final settlement
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12. On retirement of a partner, general reserve is transferred to the

(a) Capital account of all the partners (b) Revaluation account
(c) Capital account of the continuing partners(d) Memorandum revaluation account
13. If the final amount due to a retiring partner is not paid immediately, it is transferred to
(a) Bank A/c (b) Retiring partner’s capital A/c
(c) Retiring partner’s loan A/c (d) Other partners’ capital A/c
14. ‘A’ was a partner in a partnership firm. He died on 31st March 2019. The final
amount due to him is Rs. 25,000 which is not paid immediately. It will be transferred
(a) A’s capital account (b) A’s current account
(c) A’s Executor account (d) A’s Executor loan account
15. X, Y and Z were partners sharing profits and losses equally. X died on 1st April 2019.
Find out the share of X in the profit of 2019 based on the profit of 2018 which showed
Rs.36,000.
(a) Rs.1,000 (b) Rs. 3,000 (c) Rs.12,000 (d)Rs.36,000
16. That part of share capital which can be called up only on the winding up of a
Company is called:
(a) Authorised capital (b) Called up capital
(c) Capital reserve (d) Reserve capital
17. At the time of forfeiture, share capital account is debited with
(a) Face value (b) Nominal value
(c) Paid up amount (d) Called up amount
18. Which of the following statement is false?
(a) Issued capital can never be more than the authorised capital
(b) In case of under subscription, issued capital will be less than the subscribed capital
(c) Reserve capital can be called at the time of winding up
(d) Paid up capital is part of called up capital
19. Supreme Ltd. forfeited 100 shares of Rs.10 each for non-payment of final call of Rs.2
per share. All these shares were re-issued at Rs. 9 per share. What amount will
Be transferred to capital reserve account?
(a) Rs.700 (b) Rs.800 (c) Rs.900 (d) Rs.1,000
20. When shares are issued for purchase of assets, the amount should be credited to
(a) Vendor’s A/c (b) Sundry assets A/c
(c) Share capital A/c (d) Bank A/c

PART-B
Note : (i) Answer any 7 questions. 7 x 2 = 14

21. Write a short note on securities premium account.

22. What is the purpose of calculating gaining ratio?
23. What is meant by revaluation of assets and liabilities?
24 What is normal rate of return?
25. The profits and losses of a firm for the last four years were as follows:
2015: Rs.15,000; 2016: Rs.17,000; 2017: Rs.6,000 (Loss); 2018: Rs.14,000
You are required to calculate the amount of goodwill on the basis of 5 years purchase of
average profits of the last 4 years.
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26. From the following information, calculate the value of goodwill based on 3 years
purchase of super profit
(i) Capital employed: Rs.2,00,000
(ii) Normal rate of return: 15%
(ii) Average profit of the business: Rs.42,000

27. Kavitha and Radha are partners of a firm sharing profits and losses in the ratio of 4:3.
They admit Deepa on 1.1.2019. On that date, their balance sheet showed debit balance of
profit and loss account being accumulated loss of Rs.70,000 on the asset side of the
balance sheet. Give the journal entry to transfer the accumulated loss on admission.

28. Prince, Dev and Sasireka are partners in a firm sharing profits and losses in the ratio of
2:4:1. Their balance sheet as on 31st March, 2019 is as follows:
Liabilities Rs. Rs. Assets Rs.

Capital accounts Buildings 40,000

Prince 30,000 Plant 50,000
Dev 50,000 Furniture 10,000
Sasireka 20,000 1,00,000 Stock 15,000
Profit and loss appropriation 10,000 Debtors 20,000
General reserve 15,000 Cash at bank 15,000
Workmen compensation fund 17,000 Sundry creditors 8,000

1,50,000 1,50,000

29. Kumar, Kesavan and Manohar are partners sharing profits and losses in the ratio of 1/2,
1/3 and 1/6 respectively. Manohar retires and his share is taken up by Kumar and Kesavan
equally. Find out the new profit sharing ratio and gaining ratio.

30. Anbu and Raju are partners, sharing profits in the ratio of 3:2. Akshai is admitted as a
partner. The new profit sharing ratio among Anbu, Raju and Akshai is 5:3:2. Find out the
sacrificing ratio.

PART-C
Note: (i) Answer any 7 questions. 7 x 3 = 21

31. Write a short note on (a) Authorised capital (b) Reserve capital
32. Distinguish between sacrificing ratio and gaining ratio.
33. What are the journal entries to be passed on revaluation of assets and liabilities?
34. State any six factors determining goodwill.
35. For the purpose of admitting a new partner, a firm has decided to value its goodwill at 3
years purchase of the average profit of the last 4 years using weighted average method.
Profits of the past 4 years and the respective weights are as follows:
Particulars 2015 2016 2017 2018
Profit (Rs.) 20,000 22,000 24,000 28,000
Weight 1 2 3 4
Compute the value of goodwill.
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36. Rajesh and Ramesh are partners sharing profits in the ratio 3:2. Raman is admitted as a
new partner and the new profit sharing ratio is decided as 5:3:2. The following
revaluations are made. Pass journal entries and prepare revaluation account.
(a) The value of building is increased by Rs.15,000.
(b) The value of the machinery is decreased by Rs. 4,000.
(c) Provision for doubtful debt is made for Rs.1,000.

37. Mahesh and Dhanush are partners sharing profits and losses in the ratio of 2:1. Arun is
admitted for 1/4 share which he acquired equally from both Mahesh and Dhanush.
Calculate the new profit sharing ratio and sacrificing ratio.

38. Prabu, Ragu and Siva are partners sharing profits and losses in the ratio of 3:2:1. Prabu
retires from partnership on 1st April 2017. The following adjustments are to be made:
(i) Increase the value of building by Rs.12,000
(ii) Reduce the value of furniture by Rs.8,500
(iii)A provision would also be made for outstanding salary for Rs.6,500.
Give journal entries and prepare revaluation account.

39. Bharath Ltd. issued 1,00,000 equity shares of Rs.10 each to the public at par. The details
of the amount payable on the shares are as follows:
On application Rs.5 per share
On allotment Rs.3 per share
On first and final call Rs.2 per share
Application money was received for 1,20,000 shares. Excess application money was
refunded immediately. Pass journal entries to record the above.
40. Rajan Ltd. purchased machinery of Rs.6,00,000 from Jagan Traders. It issued equity
shares of Rs. 10 each fully paid in satisfaction of their claim. What entries will be made if
such issue is made: (a) at par and (b) at a premium of 50%.

PART-D
Note: Answer any 7 the questions. 7 x 5 =35

41. From the following information relating to Arul enterprises, calculate the value of
goodwill on the basis of 2 years purchase of the average profits of 3 years.
(a) Profits for the years ending 31st December 2016, 2017 and 2018 were Rs.46,000,
Rs. 44,000 and Rs. 50,000 respectively.
(b) A non-recurring income of Rs.5,000 is included in the profits of the year 2016.
(c) The closing stock of the year 2017 was overvalued by Rs.10,000.

42. The following particulars are available in respect of a business carried on by a partnership
Firm:
(a) Profits earned: 2016: ` 30,000; 2017: ` 29,000 and 2018: ` 32,000.
(b) Profit of 2016 includes a non-recurring income of ` 3,000.
(c) Profit of 2017 is reduced by ` 2,000 due to stock destroyed by fire.
(d) The stock is not insured. But, it is decided to insure the stock in future. The
insurance premium is estimated at ` 5,600 per annum.
You are required to calculate the value of goodwill on the basis of 2 years purchase of
average profits of the last three years.
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43. Raghu and Sam are partners in a firm sharing profits and losses in the ratio of 3:2. Their
balance sheet as on 31st March, 2017 is as follows:
Liabilities Rs. Rs. Assets Rs. Rs.

Capital accounts: Machinery 30,000

Raghu 40,000 Furniture 10,000
Sam 30,000 70,000 Stock 10,000
Sundry creditors 30,000 Debtors 21,000
Less: Provision for
doubtful debts 1,000 20,000
Bank 30,000

1,00,000 1,00,000
Prakash is admitted on 1.4.2017 subject to the following conditions:
(a) He has to bring a capital of ` 10,000
(b) Machinery is valued at ` 24,000
(c) Furniture to be depreciated by ` 3,000
(d) Provision for doubtful debts should be increased to ` 3,000
(e) Unrecorded trade receivables of ` 1,000 would be brought into books now
Pass necessary journal entries and prepare revaluation account and capital account of
partners after admission.

44. Anand and Balu are partners in a firm sharing profits and losses in the ratio of 7:3. Their
balance sheet as on 31st March, 2018 is as follows:
Liabilities Rs. Rs. Assets Rs.

Capital accounts: Land 60,000

Anand 50,000 Stock 40,000
Balu 30,000 80,000 Debtors 20,000
Sundry creditors 20,000 Cash in hand 10,000
Profit and loss A/c 30,000

1,30,000 1,30,000
Chandru is admitted as a new partner on 1.4.2018 by introducing a capital of Rs.20,000
for 1/4 share in the future profit subject to the following adjustments:
(a) Stock to be depreciated by Rs. 3,000
(b) Provision for doubtful debts to be created for Rs. 2,000.
(c) Land was to be appreciated by Rs. 10,000
Prepare revaluation account and capital account of partners after admission.
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45. John, James and Raja are partners in a firm sharing profits and losses equally. Their
balance sheet as on 31st March, 2019 is as follows:
Liabilities Rs. Rs. Assets Rs. Rs.

Capital accounts: Office equipment 70,000

John 80,000 Machinery 1,40,000
James 60,000 Sundry debtors 52,000
Raja 1,00,000 Less: Provision for 2,000 50,000
2,40,000 doubtful debts
Sundry creditors 1,20,000 Stock 60,000
Cash at bank 40,000

3,60,000 3,60,000
Raja retired on 31st March, 2019 subject to the following conditions:
(i) Machinery is valued at Rs.1,30,000
(ii) Value of office equipment is brought down by Rs.2,000
(iii)Provision for doubtful debts should be increased to Rs.3,000
(iv)Investment of Rs.25,000 not recorded in the books is to be recorded now
Pass necessary journal entries and prepare revaluation account.

46. Charles, Muthu and Sekar are partners, sharing profits in the ratio of 3:4:2. Their balance
sheet as on 31st December, 2018 is as under:
Liabilities Rs. Rs. Assets Rs.

Capital accounts: Furniture 20,000

Charles 30,000 Stock 40,000
Muthu 40,000 Debtors 30,000
Sekar 20,000 90,000 Cash at bank 42,000
Workmen compensation 27,000
fund
Profit and loss A/c (loss) 18,000
Sundry creditors 33,000

1,50,000 1,50,000
On 1.1.2019, Charles retired from the partnership firm on the following arrangements.
(i) Stock to be appreciated by 10%
(ii) Furniture to be depreciated by 5%
(iii) To provide ` 1,000 for bad debts
(iv) There is an outstanding repairs of ` 11,000 not yet recorded
(v) The final amount due to Charles was paid by cheque
Pass journal entries & prepare revaluation account, partners’ capital account of the firm
after retirement.
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47.Shero Health Care Ltd. invited applications for 3,00,000 equity shares of Rs.10 each at a
premium of Rs.2 per share payable as follows:
Rs.3 on application
Rs.5 (including premium) on allotment
Rs.4 on first and final call
There was over subscription and applications were received for 4,00,000 shares and the
excess applications were rejected by the directors. All the money due were received. Pass
the journal entries.

48. Sudha Ltd. offered 1,00,000 shares of Rs.10 each to the public payable Rs.3 on
application, Rs.4 on share allotment and the balance when required. Applications for
1,40,000 shares were received on which the directors allotted as:
Applicants for 60,000 shares - Full
Applicants for 75,000 shares - 40,000 shares (excess money will be utilised for
allotment)
Applicants for 5,000 shares - Nil
All the money due was received. Pass journal entries upto the receipt of allotment.

49. Khan Ltd. issued 50,000 shares of Rs.10 each to the public payable Rs.4 on application,
Rs. 4 on allotment and Rs.2 on first and final call. Applications were received for 65,000
shares. The directors decided to allot 50,000 shares on pro rata basis and surplus
application money was utilised for allotment. Pass journal entries assuming that the
amounts due were received.