ISC (Commerce) Class 12 - CISCE Important Questions for Accounts

Rita, Nina and Mita are partners in a firm sharing profits and losses in the ratio of 3:2:1. Mita dies on 1st
April, 2017. On the date of her death, it was decided to value goodwill on the basis of two years' purchase of
weighted average profits of the firm for the last three years.
The profits of the last three years and weights assigned were :

(i) Calculate the firms goodwill on the date of Mita's death (show working formula).
(ii) Pass the necessary journal entry to credit Mita's capital account with her share of goodwise.

Annie and Bonnie are partners in a firm, sharing profits and losses equally. Their Balance Sheet as at 31st March,
2017, was as follows:

                        Balance Sheet of Annie and Bonnie
                               As at 31st March, 2017

Carl was to be taken as a partner for 1/4 share in the profits of the firm, with effect from 1st April, 2017, on the
following terms:
(a) Bad debts amounting to Rs. 1,500 to be written off.
(b) Stock to be taken over by Annie at Rs.12,000.

(c) Plant and Machinery to be valued at Rs. 50,000.
(d) Goodwill of the firm to be valued at Rs. 20,000.
(e) Carl to bring in Rs. 50,000 as his capital. He was unable to bring his share of goodwill in cash.
(f) General Reserve not to be distributed. For this, it was decided that Carl would compensate the old partners
through his current account.
You are required to:
(i) Pass journal entries on the date of Carl's admission.
(ii) Prepare the Balance Sheet of the reconstituted firm

Harish, Paresh and Mahesh were three partners as sharing profits and losses in the ratio of 5:4:1. Paresh retired on 31st March, 2017. His capital on 1st April, 2016, was Rs. 80,000. During the year 2016-17, he made drawings of Rs. 5,000. He was to be charged interest on drawings of ` 100. The partnership deed provides that on the retirement of a partner, he will be entitled to:

(i) His share of capital.

(ii) Interest on capital @ 10% per annum.

(iii) His share of profit for the year of his retirement.

(iv) His share of goodwill in the firm.

(v) His share in the profit/loss on revaluation of assets and liabilities.

Additional information:

(a) Paresh's share in the profits of the firm for the year 2016-17 was Rs. 20,000.

(b) Goodwill of the firm was valued at Rs. 24,000.

(c) The firm suffered a loss of Rs.12,000 on the revaluation of assets and liabilities.

(d) It was decided to transfer the amount due to Paresh to his loan account bearing interest @ 6% per annum. The loan was to be repaid in two equal annual instalments, the first instalment to be paid on 31st March, 2018.

You are required to prepare:

(i) Paresh's Capital Account.

(ii) Paresh's Loan Account till it is finally closed.

Parth, Angad and Leesha are partners in a firm sharing profits and losses in the ratio of 3:2:1 respectively. Angad retires and his claim, including his Capital and entitlements from the firm including his share of Goodwill of the firm, is Rs. 50,000. After this amount was determined, it was found that there was an unrecorded piece of furniture valued at Rs.12,000 which had to be recorded. Upon recording this piece of furniture, the revised amount due to Angad was determined and settled by giving him this piece of furniture and the balance in cash. You are required to give the journal entries for recording the payment to Angad in the books of the firm.

Susan, Geeta and Rashi are partners sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet as at 31st March, 2017, is as under:

Balance Sheet of Susan, Geeta and Rashi As at 31st March, 2017

The partners decided to dissolve their partnership on 31st March, 2017. The following transactions took place at the time of dissolution :

(a) Realization expenses of 2,000 were paid by Susan on behalf of the firm.

(b) Geeta took over the goodwill for her own business at  40,000.

(c) Building was taken over by Rashi at 3,00,000.

(d) Only 80% of the debtors paid their dues.

(e) Furniture was sold for  97,000.

(f) Bank Loan was settled along with interest of 5,000. You are required to prepare the Realization Account.

The capital accounts of Amar and Harsh stood at  20,000 and 30,000 respectively after the necessary
adjustments in respect of drawings and net profit for the year ended 31st March, 2017. lt was subsequently
ascertained that interest on capital @ 12% per annum was not taken into account while arriving at the
divisible profits for the year.
During the year 2016-17, Amar had withdrawn 2,000 and Harsh's drawings were ` 1,000.
The net profit for the year amounted to  15,000.
The partners shared profits and losses in the ratio of 3:2.
You are required to pass the necessary journal entries to rectify the error in accounting.

State whether the following would result in inflow, outflow or no flow of cash:
(i) Bill Receivable endorsed to Creditors.
(ii) Old vehicle written off.

Which of the following transactions is debited to Revaluation Account?

Anita and Binita are partners in a firm. Anita had taken a loan of ₹ 15,000 from the firm. How will Anita’s loan be closed in the event of dissolution of the firm?

At the time of dissolution of a partnership firm, its Balance Sheet showed the stock of ₹ 30,000 comprising easily marketable items, obsolete items and a few miscellaneous other items. These items were realized as:

• Easily Marketable Items: 65% of the total inventory in full.
• Obsolete items: 20% of the total inventory had to be discarded.
• The miscellaneous other items in the stock are at 40% of their book value.

You are required to pass the journal entry for the realisation of stock.

Naresh, Dhruv and Azeem are partners sharing profits in the ratio of 5:3:7.

Naresh retires from the firm. Dhruv and Azeem decided to share profits in the ratio of 2:3.

The adjusted capital accounts of Dhruv and Azeem at the time of Naresh’s retirement showed the balances of ₹ 33,000 and ₹ 70,500 respectively.

The total amount to be paid to Naresh is ₹ 90,500 which is paid in cash immediately by the firm, the cash being contributed by Dhruv and Azeem in such a way that their capitals become proportionate to their new profit-sharing ratio and the firm maintains a minimum cash balance of ₹ 5,000 from its existing balance of ₹ 20,000.

You are required to pass journal entries to record:

• Payment made to the retiring partner
• Cash brought in by the remaining partners to pay off the retiring partner

Ravi, Vijay and Sujay were partners sharing profits in the ratio of `1/2 : 1/3 : 1/6`.

Vijay decided to retire, his share being taken up by the remaining partners in the ratio 1 : 4.

On Vijay’s retirement, a loss of ₹ 12,000 was determined upon revaluation of assets and liabilities.

You are required to:

1. Calculate the new profit-sharing ratio of the remaining partners.
2. Pass the journal entry to write off the loss on revaluation of assets and liabilities.

Sita and Gita were partners sharing profits and losses in the ratio of 4 : 5. They dissolved their partnership on 31st March, 2021, when their Balance Sheet showed the following balances:

On the date of dissolution:

1. The firm, upon realisation of assets and settlement of liabilities, made a profit of ₹ 9,000.
2. Gita paid the realisation expenses of ₹ 2,000.
3. Gita discharged the outstanding salary of the manager of the firm of ₹ 1,000 which was unrecorded in the books.

You are required to prepare the Partners’ Capital Accounts.

Nikhil, Akhil and Amber are partners in a firm. At the time of Akhil's retirement, Amber takes over furniture of ₹ 12,000 at ₹ 10,000.

Choose the correct journal entry from the following options to record this adjustment.

On the dissolution of the firm, Partner Rex agreed to take over the responsibility of completing the dissolution work at an agreed remuneration of ₹ 1000 and to bear all realisation expenses. The actual realisation expenses amounted to ₹ 1,300 which were paid by the firm on Rex's behalf.

What amount will be debited by the firm to the Realisation Account?

A firm had given a loan to one of its partners. Give the journal entry to close this Loan Account at the time of dissolution of the partnership firm.

Pooja and Meher are partners in a firm. They admit Rati into the firm on the following terms:

1. Unrecorded Debtors of ₹ 1,000 to be brought into the books.
2. Provision for doubtful debts to be created @ 5% on Debtors.

The recorded debtors in the Balance Sheet of Pooja and Meher on the date of Rati's admission were ₹ 25,000.

What will be the net debtors to be shown in the Balance Sheet of the reconstituted firm?

Pia, Sia and Jiya are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Pia died on 31^st October, 2021. Her capital as on 1^st April, 2021, was ₹ 24,000 and her share of profit for the year 2021-22 till the date of her death, was ascertained as ₹ 2,000.

Additional Information:

1. Office Equipment of the firm, the book value of which was ₹10,000 on 1st April, 2021, was revalued on the date of Pia's death at ₹13,600.
2. The amount of ₹ 35,000 due to Pia's executor in full settlement of the claim was transferred to her executor's loan account.

You are required to prepare Pia's capital account to be rendered to her executor.

Vinay, Tarun and Arjun are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2 respectively. On Tarun's retirement from the firm on 1st April, 2022. his capital account, after all adjustments, stood at ₹ 1,14,000. The partners decided that:

1. Tarun to be paid 50% of the amount due to him immediately and the balance by accepting a Bill of Exchange (without interest) payable at the expiry of 3 months.
2. The continuing partners to re-adjust their capitals in their new profit-sharing ratio in the reconstituted firm. Any surplus/deficit in their capital accounts to the adjusted through their current accounts.

Upon re-adjustment of their capitals, Vinay's capital showed a deficit of ₹ 1,000 while Arjun's capital had a surplus of ₹ 1,000.

You are required to pass journal entries to record:

1. The closing of the retiring partner's capital account.
2. Adjustment of surplus/deficit in the capital accounts of the continuing partners.

Viraj, Harsh and Akhil are partners in a firm sharing profits and losses in the ratio of 4/9 : 1/3 : 2/9. Akhil dies on 31^st March, 2022. Viraj acquires 4/9 of Akhil's share and the balance is acquired by Harsh.

On the date of Akhil's death, it was decided to value the goodwill of the firm on the basis of two year's purchase of average super profit.

The average net profit made by the firm is ₹ 49,000 per annum.

The remuneration of the partners, considered as management cost, is estimated to be ₹ 9,000 per annum.

The total value of assets and liabilities of the firm is ₹ 2,20,000 and ₹ 80,000 respectively.
The normal rate of return in the industry is 15%.

You are required to calculate:

1. The gaining ratio of the continuing partners.
2. The value of non-purchased goodwill of the firm.