Topic: Term 1 (Book 1 + Share Capital) SDJ Standard: 12th CBSE

Total Time: 3 Hours Date: 07 /09/2023 Total Marks: 80

1. A Building was purchased for Rs.9,00,000 and payment was made in Rs. 100 shares at 20% premium. 1
Securities Premium Reserve A/c will be ……………….
(a) Debited by Rs.1,50,000 (b) Credited by Rs.1,50,000
(c) Debited by Rs.1,80,000 (d) Credited by Rs.1,80,000
2. On dissolution of a firm, debtors Rs. 40,000 were shown in the Balance Sheet. Out of this Rs. 5,000 became 1
bad. One debtor became insolvent and 70% were recovered from him out of Rs. 10,000. 80% was recovered
from the balance debtors. On account of this item, Realization account will be:
(a) Debited by Rs. 13,000 (b) Credited by Rs. 27,000
(c) Debited by Rs. 27,000 (d) Credited by Rs. 20,000
3. Ram, Shyam and Mohan are partners sharing Profits and Losses in the ratio of 3: 2: 1. Shyam retires. If he 1
acquires Rs. 20,000 from Ram and Rs. 12,000 from Mohan as his share of Goodwill, what will be the new profit-
sharing ratio?
4. A, Band C are partners. C expired on 18th December, 2019 and as per the agreement, surviving partners A 1
and B directed the accountant to prepare financial statements as on 18th December, 2019 and accordingly
the share of profit of C (deceased partner) was calculated as Rs.12,00,000. Which account will be debited to
transfer C's share of profit?
(a) Profit & Loss Suspense Account (b) Profit & Loss Appropriation Account
(c) Profit & Loss Account (d)None of these
5. 1. A and B are partners sharing profits in the ratio of 2 : 3. Their Balance Sheet shows Machinery at 1
₹2,00,000; Stock at ₹80,000 and Debtors at ₹1,60,000. C is admitted and new profit sharing ratio is agreed
at 6 : 9 : 5. Machinery is revalued at ₹1,40,000 and a provision is made for doubtful debts @5%. A’s share
in loss on revaluation amount to ₹20,000. Revalued value of Stock will be :
(a) ₹62,000 (b)₹1,00,000
(c) ₹60,000 (d) ₹98,000
6. In a partnership firm, partner A is entitled a monthly salary of ₹7,500. At the end of the year, firm 1
earned a profit of ₹75,000 after charging T’s salary. If the manager is entitled a commission of 10% on
the net profit after charging his commission, Manager’s commission will be:
(a) ₹7,500 (b) ₹16,500
(c) ₹8,250 (d) ₹15,000
7. T Ltd had allotted 20,000 shares to the applicants of 24,000 shares on pro rata basis. The amount payable 1
on application is Rs.2. Manoranjan applied for 450 shares. The number of shares allotted and the amount
carried forward for adjustment against allotment money due from him is:
(a) 150 shares, Rs.375 (b) 375 shares, Rs.150
2. (c) 400 shares, Rs.100 (d) 300 shares, Rs.300
8. 3. Ganga and Jamuna are partners sharing profits in the ratio of 2:1. They admit Saraswati for 1/5th share in 1
future profits. On the date of admission, Ganga’s capital was ₹ 1,02,000 and Jamuna’s capital was ₹ 73,000.
Saraswati brings ₹ 25,000 as her share of goodwill and she agrees to contribute proportionate capital of the
new firm. How much capital will be brought by Saraswati?
(a)₹ 43,750 (b)₹ 37,500 (c)₹ 50,000 (d)₹ 40,000
9. The firm paid Realization expenses of Rs.10,000 on behalf of Nihar, a partner with whom it was agreed at Rs. 1
25,000. Realization Expenses came to Rs.35,000. Realization Account will be debited by
1. (a)Rs.10,000 (b)Rs.35,000 (c)Rs.25,000 (d)Rs.70,000

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10. A, Y and Z are partners in 5:4:1. Z is guaranteed that his share of profit will not be less than ₹80,000. Any 1
deficiency will be borne by A and Y in 3:2. Firm’s profit was ₹5,60,000. How much deficiency will be
borne by Y:
(a) ₹2,14,400 (b) ₹14,400
(c) ₹2,09,600 (d) ₹9,600
11. Assertion (A): Sanjay and Mahesh entered into a partnership in the profit sharing ratio 1:2 Mahesh agree to 1
pay Sanjay if his share of profit fall short of 50,000. The profit earned was 1,77,000. Sanjay asked him to pay
27000, but Mahesh refused to pay anything.
Reason (R): Profit is guaranteed only when the minimum amount of profit is not earned by the partner
(i) Both, Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(ii) Both, Assertion (A) and Reason (R), are true but Reason (R) is not the correct explanation of Assertion (A)
(iii) If Assertion (A) is true but Reason (R) is false
(iv) If Assertion (A) is false but Reason (R) is true
12. If 10,000 shares of ₹10 each were forfeited for non-payment of final call money of ₹ 3 per share and only 7,000 1
shares were re-issued @ ₹ 11 per share as fully paid up, then what is the amount of maximum possible discount
that company can allow at the time of re-issue of the remaining 3,000 shares?
(a)Rs.28,000 (b)Rs.21,000 (c)Rs.9,000 (d)Rs.16,000
13. P and Q are partners sharing profit and losses in the ratio of 2:1 with capitals Rs. 1,00,000 and Rs. 80,000 1
respectively. The interest on capital has been provided to them @ 8% instead of 10%. In the rectifying
adjustment entry, Q will be:
(a) Debited by Rs. 400
(b) Credited by Rs. 400
(c) Debited by Rs. 1600
(d) Credited by Rs. 1600
14. Which of the following items is not recorded on the credit side of current account of partners? 1
(a) Interest on Capital (b) Salary of Partner (c) Interest on Partners Loan (d) Profit Shares of
Partner
st st st st
15. A partner draws Rs. 2,000 each on 1 April 2020, 1 July 2020, 1 October 2020 and 1 January 2021. For the 1
year ended 31st March, 2021 interest on drawings @8% per annum will be:
(a) Rs. 400 (b) Rs. 320 (c) Rs. 420 (d) Rs. 410
16. A, B and C were partners sharing P&L in the ratio 5:3:2. A died on 30th June, 2019. Entry for treatment of 3
goodwill after his death was passed as follows:
Date Particulars L.F. Debit Credit
B’s Capital A/c Dr. 1,80,000
C’s Capital A/c Dr. 1,20,000
To A’s Capital A/c 3,00,000
(Entry for goodwill treatment passed at the time
of death of partner)
A’s profit till date of death was estimated as ₹ 1,20,000, based on the average profits of past three years.
Final dues payable to A’s executors on the date of death was calculated as ₹ 8,40,000 out of which ₹
2,40,000 was paid immediately by giving him Furniture valued for the same and balance was to be paid
in three equal annual instalments starting from 30 June, 2020, together with interest rate as specified in
Section 37 of Indian Partnership Act, 1932. Pass necessary entry for profit share to be credited to A’s
Capital and also prepare A’s executors account till final settlement.
Read the following text and answer the question numbers 17 to 19 on the basis of the information given below:
Amrish and Yogesh are partners since 1st October, 2017 sharing profits in ratio of 3:2. Their capitals as on 1 April, 2020
were of Rs. 5,00,000 and Rs.3,00,000 respectively. They did not have a partnership deed but had agreed to allow
interest on capital @5% p.a. and salary to Yogesh is to be allowed of Rs. 25,000 per annum. The accountant was
preparing the annual accounts for the year and identified that during the year Interest on Capital was not allowed but
Yogesh's Salary was allowed. Profit after Yogesh's Salary was Rs. 1,49,300. Also provision was not made for Manager's
Commission5% of the net profit after charging such commission.

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17. Profit before Yogesh Salary will be 1
(a) 1,41,000 (b) 1,66,000 (c) 1,57,300 (d) 1,74,300
18. Net Profit transferred to Profit and Loss Appropriation Account is 1
(a) 1,49,300 (b) 1,82,600 (c) 1,66,000 (d) 1,74,000
19. Total Appropriation transferred to Capital account of each partner are 1
(a) Rs. 85,600 and Rs. 80,400 respectively
(b) Rs. 60,600 and Rs. 40,400 respectively
(c) Rs. 25,000 and Rs. 40,000 respectively
(d) Rs. 25,000 and Rs. 15,000 respectively
Read the following text and answer the question numbers 20 to 22 on the basis of the information given below:
Arjun and Nakul were partners in a firm sharing profits and losses in the ratio of 3: 2. On 31st March, 2021 their Balance
Sheet was as follows:
Liabilities Rs. Assets Rs.
Capital Plant & Machinery 2,90,000
Arjun 3,10,000 Furniture 2,20,000
Nakul 2,90,000 6,00,000 Debtor 92,000
General Reserve 50,000 Less: Provision for Doubtful
Workmen’s Compensation 20,000 Debts 3,000 89,000
Fund Stock 1,40,000
Creditors 1,30,000 Cash 61,000
8,00,000 8,00,000
On 1st April, 2021, Ganesh was admitted into the partnership for 1/4th share in the profit on the following term:
(i) Goodwill of the firm was valued at Rs. 2,00,000
(ii) Ganesh brought Rs. 3,00,000 as his Capital and his share of premium for goodwill in cash
(iii) Bad Debts amounted to Rs. 2,000. Create a provision for doubtful debts @ 5% on debtors.
(iv) Furniture was undervalued by Rs. 65,400
(v) Stock was taken over by Nakul for Rs. 1,30,000
(vi) The liability against workmen’s compensation fund was determined at Rs. 30,000
20. Calculate the amount of Cash Balance to be appearing in the balance sheet of the new firm? 1
21. What amount of provision for doubtful debts will be debited to Revaluation Account? 1
22. What will be the profit on Revaluation of Assets and Reassessment of Liabilities? 1
23. On 31st March, 2019, the balance in the capital accounts of Asha, Nisha and Disha after making 3
adjustments for profits and drawings were Rs.1,50,000, Rs.1,20,000 and Rs.90,000 respectively.
Subsequently, it was discovered that interest on capital and interest on drawings had been omitted.
The partners were entitled to interest on capital @ 10% p.a. Interest on drawings was also to be charged
@ 10% p.a. The drawings during the year were: Asha Rs.50,000, Nisha Rs.60,000 and Disha Rs.30,000. The
net profit for the year ending 31st March, 2019 amounted to Rs. 1,00,000. The profit-sharing ratio was 2:
2: 1. Pass the necessary adjustment entry. Also show your workings clearly.
24. Pass entries for forfeiture and re-issue in both the following cases: 3
(a) Vikram Ltd. forfeited 5,000 shares of Rahul, who had applied for 6,000 shares for non-payment of
allotment money of Rs. 5 per share and first and final call of Rs. 2 per share. Only application money of
Rs. 3 was paid by him. Out of these 3,000 shares were re-issued @ Rs. 12 per share as fully paid.
(b) Ratan Ltd. forfeited 3,000 shares of Rs. 10 each (issued at Rs. 2 premium) for non-payment of first call
of Rs. 2 per share. Final call of Rs. 3 per share was not yet made. Out of these 2,000 shares were re-issued
at Rs. 10 per share as fully paid.

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25. Journalize the following transactions in the books of the company: 4
(a) Y Ltd. forfeited 1,500 shares of Rs. 10 each (Rs. 7 called up) for non-payment of allotment money of
Rs. 4 per share including Rs. 1 as premium. Of these 1,000 shares were reissued to M at Rs. 6 per share
as Rs.7 called up.
(b) Random Ltd. took over running business of Mature Ltd. comprising of Assets of ₹ 45,00,000 and
Liabilities of ₹ 6,40,000 for a purchase consideration of ₹ 36,00,000. The amount was settled by
bank draft of ₹ 1,50,000 and balance by issuing 12% preference shares of ₹ 100 each at 15%
premium.
26. Give the necessary journal entries for the following transactions on dissolution of the firm of Anita and 4
st
Ravi on 31 March, 2016, after the various assets (other than cash) and the third-party liabilities are
transferred to Realization Account. They shared profits and losses in the ratio of 3:2.
(a) Ravi was to get remuneration of Rs. 23,000 for completing the dissolution process. He also agreed to
bear realization expenses. Realization expenses of Rs. 10,000 were paid by Ravi from the firm’s cash.
(b) Amitesh, an old customer whose account for Rs. 60,000 was written off as bad debt in the previous
year, paid 90%.
(c) Creditors of Rs. 40,000, accepted furniture valued at Rs. 38,000 in full settlement of their claim.
(d) There were 500 shares of Rs. 40 each in Vision Ltd. acquired at a cost of Rs. 22,000 and had been
written off completely from the books. These shares are now valued at Rs. 50 each and divided among
the partners in their profit-sharing ratio.
27. Altaur Ltd. was registered with an authorised Capital of Rs. 4,00,00,000 divided in 25,00,000 Equity Shares 4
of Rs. 10 each and 1,50,000, 9% Preference Shares of Rs. 100 each. The company issued 8,00,000 Equity
Shares for public subscription at 20% premium, payable Rs. 3 on application; Rs. 7 on allotment (including
premium) and balance on call. Public had applied for 10,00,000 shares. Excess Applications were sent
letters of regret.
All the dues on allotment received except on 15,000 shares held by Sanju. Another shareholder Rocky
paid his call dues along with allotment on his holding of 25,000 shares. You are required to prepare the
Balance Sheet of the company as per Schedule III of Companies Act, 2013, showing Share Capital balance
and also prepare Notes to Accounts.
OR
(a) Lilly Ltd. forfeited 100 shares of ₹10 each issued at10% premium (₹8 called up) on which a
shareholder did not pay ₹3 of allotment (including premium) and first call of ₹2. Out of these 60 shares
were reissued to Ram as fully paid for ₹8 per share and 20 shares to Suraj as fully paid up @ ₹12 per
share at different intervals of time. Prepare Share Forfeiture account.

(b) A limited company forfeited 400 shares of Mr. X who had applied for 600 shares on account of non-
payment of allotment money Rs. 3 + Rs. 2.50 (premium) and first call Rs. 2. Only Rs. 4 per share was
received with application. Out of these, 200 shares were re-issued to Mr. Y at Rs. 8 per share, Rs. 9 paid
up. Give journal entries relating to forfeiture and re-issue.
28. X, Y and Z are partners sharing profits and losses in the ratio of 3:2:1. From 31st March, 2018 they decided 4
to share profits and losses equally.
The partnership deed provides that in the event of any change in the profit-sharing ratio, the goodwill
should be valued at two years purchase of the average profits of the preceding five years. The profits and
losses for the preceding years are 2013-14 Profit Rs. 90,000; 2014-15 Profit Rs. 70,000; 2015-16 Loss Rs.
30,000; 2016-17 Profit Rs. 50,000 and 2017-18 Profit Rs. 70,000.
It was realized that the following omission was made.
A computer purchased on October 1st 2017 for Rs. 25,000 was wrongly considered as revenue
expenditure and debited to profit and loss account, on which depreciation is to be charged @20%.
Calculate value of goodwill after the above adjustments and give the necessary single adjusting entry to
record the above arrangement.

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29. A partnership firm earned net profits during the last three years as follows: 4
Years Net Profit
2007-2008 1,90,000
2008-2009 2,20,000
2009-2010 2,50,000
The capital employed in the firm throughout the above-mentioned period has been Rs. 4,00,000. Having
regard to the risk involved, 15% is considered to be a fair return on the capital. The remuneration of all
the partners during this period is estimated to be Rs. 1,00,000 per annum.
Calculate the value of goodwill on the basis of

(i) Two year's purchase of super profits earned on average basis during the above mentioned three years
(ii) by Capitalization of average profits method.

OR
Radhika, Bani and Chitra were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 1. With
effect from 1st April, 2018 they decided to share future profits and losses in the ratio of 3 : 2 : 1. On that
date their Balance Sheet showed a debit balance of Rs. 24,000 in Profit and Loss Account and a balance
of Rs. 1,44,000 in General Reserve. It was also agreed that:
(a) The goodwill of the firm be valued at Rs. 1,80,000.
(b) The Land (having book value of Rs. 3,00,000) will be valued at Rs. 4,80,000
Pass the necessary journal entries for the above changes.
30. Gautam and Yashica are partners in a firm, sharing profits and losses in 3:1 respectively. The balance sheet 6
of the firm as on 31st March 2018 was as follows:
Balance Sheet as at March 31, 2018
Liability Rs. Assets Rs.
Sundry Creditors 50,000 Furniture 60,000
Bills payable 30,000 Stock 1,40,000
Capitals Debtors 80,000
Gautam 4,00,000 Cash in hand 90,000
Yashica 1,00,000 5,00,000 Machinery 2,10,000
5,80,000 5,80,000
Asma is admitted as a partner for 3/8th share in the profits with a capital of Rs.2,10,000 and Rs.50,000
for her share of goodwill. It was decided that:
(i) New profit-sharing ratio will be 3:2:3
(ii) Machinery will depreciate by 10% and Furniture by Rs.5,000.
(iii) Stock was re-valued at Rs.2,10,000.
(iv) Provision for doubtful debts is to be created at 10% of debtors.
(v) The capitals of all the partners were to be in the new profit-sharing ratio on basis of capital of new
partner any adjustment to be done through current accounts.
Prepare Revaluation Account, Partners Capital Account.
31. Balance Sheet of Daniel, Rahim and Akash who were sharing profit in the ratio of 5:3:2 as at 31st March, 2019 6
was as follow: Balance Sheet as on 31st March, 2019
Liabilities Rs. Assets Rs.
Creditor 50,000 Cash at Bank 40,000
Employee Provident Fund 10,000 Sundry Debtors 1,00,000
Workmen Compensation Reserve 50,000 Stock 80,000
Profit and Loss A/c 85,000 Fixed assets 60,000
Capital A/cs Goodwill 50,000
Daniel 40,000
Rahim 62,000

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 Akash 33,000 1,35,000
3,30,000 3,30,000
st
Daniel retired on 1 April, 2019 on the following terms:
(i) Goodwill of the firm be valued at Rs. 80,000 and Daniel’s share of the same be adjusted to that of Rahim
and Akash who are going to share future profit in the ratio of 2:3
(ii) Fixed assets are to be reduced to Rs. 57,500
(iii) Make a provision for doubtful debts at 5% of Sundry debtors
(iv) A liability for claim included in Creditors for Rs. 10,000 is settled (paid) at Rs. 8,000
(v) Rs. 22,000 for Insurance premium was debited in profit and loss account for the year ended 31st March,
2019, out of which Rs. 10,000 related to the period after 31st March, 2019
(vi) Stock was overvalued by Rs. 10,000
(viii) The amount to be paid to Daniel is to be contributed by Rahim and Ashok in such a way that their
capitals are in their profit-sharing ratio leaving a balance of Rs. 15,000 in the Bank A/c
Prepare Revaluation A/c, Partners Capital A/c.
OR
Dinesh, Alvin and Pramod are partners in a firm sharing profits and losses in the ratio of 5:3:2. Their
Balance Sheet as at March 31, 2018 was as follows: -
Balance Sheet of Dinesh, Alvin and Pramod
As at 31st March, 2018
Liabilities Rs. Assets Rs.
Capitals: Debtors 15,000
Dinesh 30,000 Fixed Assets 67,000
Alvin 40,000 Investment 40,000
Pramod 30,000 1,00,000 Stock 25,500
Reserve 40,000 Cash in Hand 36,000
Creditors 50,000 Deferred Revenue Exp 14,000
Bills Payable 10,000 Dinesh’s Loan A/c 2,500
2,00,000 2,00,000
Dinesh died on July 1, 2018; the executors of Dinesh are entitled to:
(i) His share of goodwill. The total goodwill of the firm valued at Rs.50,000.
(ii) His share of profit up to his date of death on the basis of actual sales till date of death. Sales for the
year ended March 31, 2018 was Rs.12, 00,000 and profit for the same year was Rs.2,00,000. Sales shows
a growth trend of 20% and percentage of profit earning remains the same.
(iii) Investments were sold at par. Half of the amount due to Dinesh was paid to his executors and for
the balance, they accepted a Bills Payable.
Prepare Dinesh’s Capital account to be rendered to his executors.
32. The Balance Sheet of A, B and C sharing profits in the ratio of 3: 4: 2 stood as follows on the date of 6
dissolution:
Liabilities Rs. Assets Rs.
Creditors 40,000 Machinery 75,000
Workmen's Compensation Reserve 45,000 Computer 8,000
Investment Fluctuation Reserve 5,000 Furniture 50,000
Mrs. A's Loan 25,000 Investments 60,000
Mrs. B's Loan 20,000 Stock-in-trade 1,20,000
A's Capital A/c 2,00,000 C's Capital A/c 20,000
B's Capital A/c 1,20,000 Profit & Loss Account 90,000
Cash 10,000
Bank 22,000
4,55,000 4,55,000

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 The following information is given to you:
(1) A promised to pay Mrs. A's Loan and took stock in trade at Rs. 1,00,000.
(2) B took half the investments at Rs. 35,000 and remaining investments were realized at 120%.
(3) C took over machinery at Rs. 50,000 for cash.
(4) Rs. 60,000 had to be paid for Workmen's Compensation.
(5) Creditors amounting to Rs. 8,000 were given furniture of the book value of Rs. 20,000 in full settlement.
Remaining Creditors were paid at a discount of 10%.
(6) Remaining furniture was sold at 30% of the book value.
(7) A was allowed a remuneration of Rs. 10,000 to carry out dissolution work and he agreed to bear all
expenses of realization which amounted to Rs. 15,000 and were paid by him. Prepare Realization Account.
33. (a) Parul, Payal and Priyanka are partners. They decided to dissolve their firm. Pass necessary Journal 6
Entries for the following after various assets (other than cash and bank) and the third party liabilities have
been transferred to Realisation Account:
(i) There were total debtors of Rs. 76,000. A provision of bad and doubtful debts also stood in the books
Rs. 6,000; Rs. 12,000 debtors proved bad and rest paid the amount due.
(ii) Parul agreed to pay off her husband's loan of Rs. 7,000 at a discount of 5%.
(iii) Priyanka paid the realisation expenses of Rs. 15,000 out of her pocket and she was to get a
remuneration of Rs. 18,000 for completing the dissolution process.

(b) Purohit, Pandit and Sant were partners with fixed capitals of Rs. 3,00,000, Rs. 2,00,000 & Rs. 1,00,000
respectively. They shared profits in the ratio of their fixed capitals. Sant died on 31stMay, 2022, whereas
the firm closes its books of accounts on 31st March every year. According to their partnership deed, Sant's
representatives would be entitled to get share in the interim profits of the firm on the basis of sales. Sales
and profit for the year 2021-22 amounted to Rs.8,00,000 and Rs. 2,40,000 respectively and sales from 1st
April, 2022 to 31st May 2022 amounted to Rs.1,50,000. The rate of profit to sales remained constant
during these two years. You are required to:
(i) Calculate Sant's share in profit.
(ii) Pass journal entry to record Sant's share in profit.
34. Arti Ltd., invited applications for issuing 80,000 shares of Rs. 10 each at a premium of Rs. 4 per share. 6
The amount was payable as follows: On application Rs. 5 (including premium), on allotment Rs. 5, balance
on call. Applications were received for 1,40,000 shares.
Allotment was made as follows
(i) To applicants for 80,000 shares - 60,000 shares.
(ii) To applicants for 60,000 shares - 20,000 shares.
Rakesh who had applied for 1,200 shares under category (i) failed to pay the call money and his shares
were forfeited. Sohan has paid his entire amount at the time of allotment on his 1,000 shares. Excess
money to be adjusted on allotment and calls.
Pass Journal entries in the books of Ashok Ltd.
OR
Jain Ltd., invited applications for 50,000 shares of Rs. 10 each payable as follows: Rs. 3 on application, Rs.
4 on allotment and balance on call. Applications were received for 1,20,000 shares and shares were
allotted on pro-rata basis. The excess money received on applications was to be adjusted against
allotment only. A shareholder who applied for 6,000 shares could not pay the call money and his shares
were forfeited immediately. Later on, all the forfeited shares were re-issued to Mr. Karan at Rs. 8 per
share, Rs. 10 paid-up. Pass necessary Journal entries.

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 Answer Key

1. (b) Credited by Rs.1,50,000

2. (b)Credited by Rs. 27,000
3. New Ratio – 17:7
4. (b) Profit & Loss Appropriation Account
5. (d)Rs. 98,000
6. (d)Rs.15,000
7. (b) 375 shares, Rs.150
8. (c)₹ 50,000
9. (c)25,000
10. (d)Rs.9,600
11. (a) Both, Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
12. (b)Rs.21,000
13. (b)Credited by Rs.400
14. (c) Interest on Partners Loan
15. (a)Rs.400
16. JOURNAL
Date Particulars L.F. Dr. Cr.
(in Rs.) (in Rs.)
2019 Profit and Loss Suspense A/c 1,20,000
June 30 To A’s Capital A/c 1,20,000
(Being share of profit provided till the date of his
death)
Executors A/c
Date Particular Rs. Date Particular Rs.
2019 2019
June 30 To Bank A/c 2,40,000 June 30 By A’s Capital A/c 8,40,000
2020 2020
Mar. 31 To Balance c/d 6,27,000 Mar. 31 By Interest A/c 27,000
8,67,000 8,67,000
2020 2020
June 30 Bank A/c 2,36,000 Apr 1 Balance b/d 6,27,000
2021 June 30 Interest A/c 9,000
Mar. 31 Balance c/d 4,18,000 2021
Mar. 31 Interest A/c 18,000
6,54,000 6,54,000
2021 2021
June 30 Bank A/c 2,24,000 Apr 1 Balance b/d 4,18,000
2022 June 30 Interest A/c 6,000
Mar. 31 Balance c/d 2,09,000 2022
Mar. 31 Interest A/c 9,000
4,33,000 4,33,000
2022 2021
June 30 Bank A/c 2,12,000 Apr 1 Balance b/d 2,09,000
June 30 Interest A/c 3,000
2,12,000 2,12,000
17. (d)Rs.1,74,300
18. (c)Rs.1,66,000
19. (a)Rs. 85,600 and Rs. 80,400 respectively
20. Rs.4,11,000 (61,000 + 3,50,000)

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 21. Amount of prov to debited – Rs.3,500
22. Rs.41,900
23. Journal
DATE PARTICULARS L.F DEBIT (Rs.) CREDIT (Rs.)
2017 Nisha’s Capital A/c Dr. 2,250
Apr 1 To Asha’s Capital A/c 300
To Disha’s Capital A/c 1,900
(Omission of interest on capital and commission, now
rectified)
Working Notes:
Interest on Interest on Net Effect
Partners Profit Dr. (Rs.)
Capital (Cr.) Drawings (Dr.) Dr. (Rs.) Cr. (Rs.)
Asha 16,000 2,500 13,200 - 300
Nisha 14,000 3,000 13,200 2,200 -
Disha 10,000 1,500 6,600 - 1,900
40,000 7,000 33,000 2,200 2,200
Calculation of Interest on Capital:
Calculation of Opening capitals:
Particulars Asha Nisha Disha
Closing Capitals 1,50,000 1,20,000 90,000
Add: Drawings 50,000 60,000 30,000
Less: Profits (40,000) (40,000) (20,000)
Opening capitals 1,60,000 1,40,000 1,00,000
Interest on capital 10% p.a. 16,000 14,000 10,000

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 24.

25.

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 (b)

26. Date Particulars L.F. Debit Credit

(Rs.) (Rs.)
(a) Realisation a/c Dr. 23,000
To Ravi's Capital a/c 23,000
Ravi's Capital a/c Dr. 10,000
To Cash a/c 10,000
(b) Bank a/c Dr. 54,000
To Realisation 54,000
(c) No entry.
(d) Anita’s Capital A/c Dr. 15,000
Ravi’s Capital A/c Dr. 10,000
To Realisation A/c 25,000

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 27.

OR
(a)

(b)
Date Particulars L.F. Debit (Rs.) Credit (Rs.)
Share Capital A/c Dr. 3,600
Securities Premium Reserve A/c 1,00
To Share Allotment A/c 1,400
To Share First Call A/c 800
To Share Forfeiture A/c 2,400
(Forfeiture of 400 shares of Mr. X for noon-
payment of allotment and call money)
Bank A/c Dr. 1,600
Share Forfeiture A/c Dr. 200
To Share Capital A/c 1,800
(200 shares re-issued @ Rs. 8 each, Rs. 9
paid up)
Share Forfeiture A/c Dr. 1,000
To Capital Reserve 1,000
(Profit on re-issue of 200 forfeited shares
transferred to Capital Reserve A/c)
Working notes:
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 Excess received from X on Application = 600 – 400
= 200 x Rs. 4
= Rs. 800
Amount due from X on allotment = 400 x Rs. 5.50 = 2,200
Less: Excess received on application = 800
Amount not received from X on allotment = 1,400
28. Calculation of Average Profit
Rs.
2013-14 Profit 90,000
2014-15 Profit 70,000
2015-16 Loss (30,000)
2016-17 Profit 50,000 (Note 1)
2017-18 Profit 92,500
2,70,000
2,70,000
Average profit = 5 = Rs. 54,500
Goodwill = 54,500 x 2 = Rs. 1,09,000
Working Note 1
Rs.
2017 Profit 70,000
Add : Computer Payment wrongly debited to Profit and Loss account
will increase the profit. 25,000
Less : Depreciation (25,000 𝑥 20 𝑥 6 ) (2,500)
100 12
92,500

Sacrificing Ratio = Old Ratio - New Ratio

X = 3/6 - 1/3 = 1/6
Y = 2/6 - 1/3 = 0/6
Z = 1/6 - 1/3 = (-1/6) gain
29. Total Profits Average Profit = Rs.1,90,000 + Rs.2,20,000 + Rs.2,50,000
= Rs.6,60,000
Average Profit = 6,60,000/3 = Rs.2,20,000
Average Profit for Goodwill = Average Profit — Partner's Remuneration
= Rs.2,20,000 — Rs.1,00,000 = Rs.1,20,000
Value of Goodwill on the basis of two year's purchase of super profits :
Normal Profit = Rs.4,00,000 x —15/100 = Rs.60,000
Super Profits = Average Profits — Normal Profits
= Rs.1,20,000 — Rs.60,000 = Rs.60,000
Goodwill = Super Profit x 2
= Rs.60,000 x 2 = Rs.1,20,000
(ii) Value of Goodwill by Capitalisation of Average Profit method:
Capitalised Value of Average Profit = Average Profits x 100/Normal Rate of Return
= 1,20,000 x 100/15 = Rs. 8,00,000
Goodwill = Capitalised Value of Average Profits — Net Assets
= Rs.8,00,000 — Rs.4,00,000 = Rs.4,00,000

OR
Date Particular L.F Dr. (Rs.) Cr. (Rs.)
Radhika’s Capital A/c 8,000
Bani’s Capital A/c 12,000

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 Chitra’s Capital A/c 4,000
To Profit and Loss A/c 24,000
(Being undistributed loss transferred to Partners’
Capital Accounts)
General Reserve 1,44,000
To Radhika’s Capital A/c 48,000
To Bani’s Capital A/c 72,000
To Chitra’s Capital A/c 24,000
(Being General Reserve distributed to Partners’
Capital Accounts)
Radhika’s Capital A/c 30,000
To Bani’s Capital A/c 30,000
(Being adjustment entry made for goodwill)
Land A/c 1,80,000
To Revaluation A/c 1,80,000
(Being Land revalued)
Revaluation A/c 1,80,000
To Radhika’s Capital A/c 60,000
To Bani’s Capital A/c 90,000
To Chitra’s Capital A/c 30,000
(Being gain on Revaluation transferred to Partners’
Capital Accounts)
30. Revaluation A/c
Particulars Rs. Particulars Rs.
To machinery a/c 21,000 By Stock a/c 70,000
To Furniture a/c 5,000
To Provision for doubtful 8,000
debts a/c
To Gain on revaluation t/f to
partner’s capital a/c’s:
Gautam 27,000
Yashica’s 9,000 36,000
70,000 70,000

Partner’s Capital A/c’s

Particulars Gautam Yashica Asma Particulars Gautam Yashica Asma
To Gautam’s 2,67,000 By bal b/d 4,00,000 1,00,000
current By Revaluation 27,000 9,000
To bal c/d 2,10,000 1,40,000 2,10,000 a/c
By Bank a/c 2,10,000
By Premium for 50,000
goodwill
By Yashica’s 31,000
current a/c
4,77,000 1,40,000 2,10,000 4,77,000 1,40,000 2,10,000
Working Note: Total Capital of the firm=2,10,000 * 8/3
=5,60,000
Gautam’s capita in the firm = 5,60,000 * 3/8
=2,10,000
Yashica’s capital in the firm= 5,60,000 * 2/8
=1,40,000
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 31. Revaluation A/c
Particulars Rs. Particulars Rs.
Fixed Asset 2,500 Creditors 2,000
Provision 5,000 Prepaid insurance 10,000
Stock 10,000 Loss
Daniel 2,750
Rahim 1,650
Akash 1,100 5,500
17,500 17,500

Partner’s Capital A/c’s

Particulars Daniel Rahim Akash Particulars Daniel Rahim Akash

Daniel 8,000 32,000 Bal B/d 40,000 62,000 33,000

Goodwill 25,000 15,000 10,000 Rahim 8,000
Loss 2,750 1,650 1,100 Akash 32,000
Bank 1,19,750 WCR 25,000 15,000 10,000
Profit/ Loss 42,500 25,500 17,000
Bal c/d 79,000 1,18,500 Bank 1,150 1,01,600

1,47,500 1,03,650 1,61,600 1,47,500 1,03,650 1,61,600

Old Ratio – 5:3:2
New Ratio – 2:3
Gaining ratio will be 1:4

C/d of Rahim – 77,850

C/d of Akash – 16,900
Amount paid to Daniel after using firms balance – 1,02,750 (1,19,750 – 17,000 Firms Cash used)
Divide the total 1,97,500 of above in new ratio to get new c/d of the firm

OR

Dr. Dinesh’s Capital A/c Cr.

Particulars Amount Particulars Amount
(Rs.) (Rs.)
To Deferred Revenue By Balance b/d 30,000
Expenditure 7,000
To Dinesh’s Loan A/c 2,500 By General Reserve 20,000
To Dinesh’s Executor’s A/c 95,500 By Alwin’s Capital A/c 15,000
By Pramod’s Capital A/c 10,000
By Profit and Loss Suspense 30,000
A/c
1,05,000 1,05,000

Dr. Dinesh’s executor A/c Cr.

Particulars Amount Particulars Amount
(Rs.) (Rs.)
To Cash A/c 47,750 By Dinesh’s Capital A/c 95,500

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 To Bills Payable A/c 47,750
95,500 95,500

Working Note :-
1 5
Share of Profit = Rs. 3,60,000 × 6 × 10 = Rs. 30,000
32. Realisation Account
Particulars Rs. Particulars Rs.
To Machinery 75,000 By Creditors 40,000
To Computer 8,000 By WCR 45,000
To Furniture 50,000 By IFR 5,000
To Investment 60,000 By Mrs. A’s Loan 25,000
To Stock in Trade 1,20,000 By Mrs. B’s Loan 20,000
To A’s Cap A/c (Mrs. A Loan) 25,000 By A’s Capital A/c (Stock in trade) 1,00,000
To Bank By B’s Capital A/c (Investment) 35,000
WCC 60,000 By Bank
Creditors 28,800 Investment 36,000
Mrs. B’s Loan 20,000 1,08,800 Machinery 50,000
To A’s Cap A/c (Rem) 10,000 Furniture 9,000
Computer 8,000 1,03,000
By Capital A/cs (Loss)
A 27,933
B 37,244
C 18,622 83,800
4,56,800 4,56,800
33. (a)
Journal
Date Particulars L.F. Dr. Amount Cr. Amount
(Rs.) (Rs.)
(i) Cash A/c 64,000
To Realisation A/c 64,000
(Being amount realised from debtors)
(ii) Realisation A/c 6,650
To Parul's Capital A/c 6,650
(Being Amount paid to Parul for paying off his
husband’s loan)
(iii) Realisation A/c 4,000
To Cash A/c 4,000
(Being contingent liability discharged)

(b)
(i) Sales for the year 20121 − 22 = ₹8,00,000 Profit for the year 2021-22 = ₹2,40,000 Sales from 1st
April, 2022 to 31st May 2022 = ₹ 1,50,000
Ratio of Profit to Sales
2,40,000
= = 30%
8,00,000
Profit upto Sant's date of death
= ₹1,50,000 × 30% = ₹45,000
Sant's Share of Profit upto his date of death
1
= ₹45,000 × = ₹7,500
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 (ii)
Date Particular L.F Dr. Cr.
Profit and Loss Suspense A/c 7,500
To Sant’s Current A/c 7,500
(Being Sant’s share of profit upto his date of
death transferred to his current account)
34. In the Books of Arti Ltd.
Date Particulars L.F. Debit Credit
(Rs.) (Rs.)
Bank A/c Dr. 7,00,000
To Equity Share Application A/c 7,00,000
(Being application money received)
Equity Share Application A/c Dr. 7,00,000
To Equity Share Capital A/c 80,000
To Equity Share Allotment A/c 2,00,000
To Equity Share Call A/c 80,000
To Securities Premium Reserve A/c 3,20,000
To Bank A/c 20,000
(Being application money adjusted)
Equity Share Allotment A/c Dr. 4,00,000
To Equity Share Capital A/C 4,00,000
(Being allotment money due on 80,000 shares)
Bank A/c Dr. 2,04,000
To Calls-in-Advance A/c 4,000
To Equity Share Allotment A/c 2,00,000
(Being allotment money received)
Equity Share Call A/c Dr. 3,20,000
To Equity Share Capital A/c 3,20,000
(Being call money due)
Bank A/c Dr. 3,12,400
Calls-in-Arrear A/c Dr. 3,600
Calls-in-Advance A/c Dr. 4,000
To Equity Share Call A/c 3,20,000
(Being call money received except on 900 shares)

Equity Share Capital A/c Dr. 9,000

To Calls-in-Arrears A/c 3,600
To Share Forfeiture A/c 5,400
(Being 900 shares were forfeited)
OR
Journal entries of Jain Ltd.
Date Particulars L.F. Debit Credit
(Rs.) (Rs.)
Bank A/c Dr. 3,60,000
To Equity Share Application A/c 3,60,000
(Being application money received)
Equity Share Application A/c Dr. 3,60,000
To Equity Share Capital A/c 1,50,000
To Equity Share Allotment A/c 2,00,000
To Bank A/c 10,000
(Being application money adjusted)
Equity Share Allotment A/c Dr. 2,00,000
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 To Equity Share Capital A/c 2,00,000
(Being allotment money due on 50,000 shares)
Equity Share First and Final Call A/c Dr. 1,50,000
To Equity Share Capital A/c 1,50,000
(Bing call money due)
Bank A/c Dr. 1,42,500
Calls-in-Arrears A/c Dr. 7,500
To Equity Share First and Final Call A/c 1,50,000
(Being forfeiture of 2,500 shares)
Equity Share Capital A/c Dr. 25,000
To Calls-in-Arrears A/c 7,500
To Share Forfeiture A/c 17,500
(Being shares were forfeited)
Bank A/c Dr. 20,000
Share Forfeiture A/c Dr. 5,000
To Equity Share Capital A/c 25,000
(Being forfeited shares were re-issued)
Share Forfeiture A/c Dr. 12,500
To Capital Reserve A/c 12,500
(Being gain on re-issue transferred to capital reserve)
1,20,000
Applicants for 1,20,000 shares were allotted 50,000 shares, therefore, ratio is 50,000 = 12: 5
5
Hence, applicant has been allotted shares = 6,000 x 12
= 2,500

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