D.A.V.

NANDRAJ PUBLIC SCHOOL, BARIATU, RANCHI

PRACTICE TEST 3 (2024 -25)

CLASS: XII F.M.: 25

SUBJECT: ACCOUNTANCY TIME ALLOWED: 50 MIN.

1. A, B and C were partners sharing profits, and losses in the ratio of 2:2:1. C died on 1st July, 2023 on which
date the capitals of A, B and C after all necessary adjustments stood at ₹74,000, ₹ 63,750 and 42,250
respectively. A and B continued to carry on the business for six months without settling the accounts of C.
During the period of six months from 1 -7-2023, a profit of ₹ 20,500 is earned using the firm’s property.
State which of the two options available u/s 37 of the Indian Partnership Act, 1932 should be exercised by
executors of C and why?
2. X, Y and Z were partners sharing profits and losses equally. Y died on 1st October, 2023 and total amount
transferred to Y’s executors was ₹ 15,60,000. Y’s executors were being paid ₹ 3,60,000 immediately and
balance was to be paid in four equal quarterly instalments, together with Interest @ 6% p.a. Pass entries till
payment of first two instalments.
3. Meghna, Mehak and Mandeep were partners in a firm whose Balance Sheet as on 31st March, 2023 was as
under:
Balance Sheet
Liabilities Amount Assets Amount
Creditors 28,000 Cash 27,000
General Reserve 7,500 Debtors 20,000
Meghna 20,000 Stock 28,000
Mehak 14,500 Furniture 5,000
Mandeep 10,000

80,000 80,000

Mehak retired on this date under following terms:

(i) To reduce stock and furniture by 5% and 10% respectively.
ii) To provide for doubtful debts at 10% on debtors.
(iii) Goodwill was valued at `12,000.
(iv) Creditors of Rs.8,000 were settled at Rs.7,100.
(v) Mehak should be paid off and the entire sum payable to Mehak shall be brought in by Meghna and
Mandeep in such a way thattheir capitalsshould be in their new profit-sharing ratio and a balance of
Rs.25,000 is maintained in the cash account. Prepare Revaluation Account and partners’ capital accounts of
the new firm

4. Sunny and Bobby were partners in a firm sharing profits and losses in the ratio of 3:2, their balance sheet as
at 31st March, 2012:
Liabilities Amount Assets Amount
 Creditors 1,90,000 Bank 5,000
Bills payable 1,10,000 Fixed deposit 70,000
E.P.Fund 50,000 Stock 86,000
Mrs. Sunny loan 55,000 Investment 1,04,000
Bobby Loan 85,000 Debtors 1,77,000
Investment Fluctuation fund 30,000 Less: Provision 12,000 1,65,000
Sunny capital 2,10,000 Other fixed Assets 3,80,000
Bobby capital 1,20,000 Deffered Revenue Expenditure 35,000
Sunny’s loan 15,000

8,60,000 8,60,000

The firm was dissolved on 31st March, 2012. The assets were realized and the liabilities were paid as under:
(a) Sunny promised to pay off Mrs. Sunny’s Loan
(b) Bobby took away stock at 20% discount and 80% of the investments at 10% discount.
(c) Dharam, a debtor of Rs. 60,000 had to pay the amount due 2 months after the date of dissolution. He
was allowed a discount of 9% p.a. for making immediate payment
(d) Creditors were paid Rs.1,75,000 in full settlement of their claim.
(e) 90% of Other fixed assets realised Rs. 1,98,000 and remaining were realised at discount of 15%.
(f) Balance of investments were sold at 75% value and Fixed Deposits were realised at 110%.
(g) There was an old furniture which has been written off completely from the books, Bobby took away the
same for Rs. 41,000 against his loan and balance to 6 him was given in cash.
(h) Realisation expenses Rs. 20,000 were paid by Sunny and Bobby equally on behalf of the firm.
You are required to prepare Realisation A/c.
5. Sun and Kiran are partners sharing profits and losses equally. They decided to dissolve their firm. Assets and
Liabilities have been transferred to Realisation Account. Pass necessary Journal entries for the following:
a) All partners are agreed that the process of realisation at the time dissolution will be accomplished by Sun
for which he will be paid ₹10,000 along with the amount of expense which amounted to 2% of total value
realised from the Assets on dissolution. Some assets were sold for Cash at a cumulative Value of ₹12,00,000
and the remaining were taken over by creditors at a valuation of ₹3,00,000.
b) Deferred Advertisement Expenditure A/c appeared in the books at ₹28,000.
c) Out of the Stock of ₹1,20,000; Kiran (a partner) took over 1/3 of the stock at a discount of 25% and 50% of
remaining stock was took over by a Creditor of ₹30,000 in full settlement of his claim. Balance amount of
stock realized at ₹25,000.
d) An outstanding bill for repairs and renewal of₹3,000 was settled through an unrecorded asset which was
valued at ₹10,000. Balance being settled in Cash.
6. Sandeep, Maheep and Amandeep were partners in a firm sharing profits in the ratio of 2: 2: 1. The firm
closes its books on 31st March every year. On 30th June, 2020 Maheep died. The partnership deed provided
that on the death of a partner his executors will be entitled to the following: a) Balance in his capital account
which amounted to ₹1,15,000 and interest on capital till date of death which amounted to ₹5,000. b) His
share in the profits of the firm till the date of his death amounted to ₹20,000. c) His share in the goodwill of
the firm. The goodwill of the firm on Maheep’s death was valued at ₹ 1,50,000. d) Loan to Maheep
amounted ₹ 20,000. It was agreed that the amount will be paid to his executor in three equal yearly
instalments with interest @10% p.a. The first instalment was to be paid on 30.06.2021. Calculate the
 amount to be transferred to Maheep’s executors Account and prepare the executor’s account till it is finally
settled.
7. X and Y were partners in the profit-sharing ratio of 3: 2. Their balance sheet as at March 31, 2022 was as
follows:
Balance Sheet as at March 31, 2022

Liabilities Amount Assets Amount

Creditors 56,000 Plant and Machinery 70,000
General Reserve 14,000 Building 98,000
X’s Capital 1,19,000 Stock 21,000
Y’s Capital 1,12,000 Debtors 42,000
Less : Provision 7,000 35,000
Cash 77,000

3,01,000 3,01,000

Z was admitted for 1/6th share on the following terms:

(i) Z will bring ₹ 56,000 as his share of capital, but was not able to bring any amount to compensate the
sacrificing partners. (ii) Goodwill of the firm is valued at ₹. 84,000. (iii)Plant and Machinery were found to be
undervalued by ₹ 14,000 Building was to brought up to ₹ 1,09,000. (iv)All debtors are good. (v) Capitals of X
and Y will be adjusted on the basis of Z’s share and adjustments will be done by opening necessary current
accounts. You are required to prepare revaluation account and partners’ capital account.
8. P, Q and R were partners in a firm sharing profits in the ratio of 3:2:1 respectively. On March 31st, 2022, the
balance sheet of the firm stood as follows:
Balance Sheet

Liabilities Amount Assets Amount

Creditors 13,000 Profit and Loss A/c 1,200
Bills Payable 590 Building 23,000
P 15,000 Stock 11,690
Q 10,000 Debtors 8,000
R 10,000 Cash 4,700

48,590 48,590

Q retired on the above-mentioned date on the following terms:

(i) Buildings to be appreciated by ₹7,000 (ii) A provision for doubtful debts to be made at 5 % on debtors.
(iii)Goodwill of the firm is valued at ₹ 18,000 and adjustment to be made by raising and writing off the
goodwill. (iv)₹ 2,800 was to be paid to Q immediately and the balance in his capital account to be
transferred to his loan account carrying interest as per the agreement. (v) Remaining partner decided to
maintain equal capital balances, by opening current account.

.
9. A and B are partners in a firm sharing profit in 3:1. They admitted C as a partner for 1/4th share in future
profits. C was to bring Rs. 60,000 for his capital. The balance sheet of A and B as at 1st April 2019, the date on
which C was admitted was
Liabilities Rs. Assets Rs.
A capital 1,50,000 Land and building 1,40,000
B capital 1,80,000 Plant and machinery 1,70,000
General reserve 40,000 Stock 60,000
Creditors 70,000 Debtors 35,000
Less: provision 1,000 34,000
Investment 26,000
Cash 10,000
Rs. 4,40,000 Rs. 4,40,000
The other terms were
1. Goodwill of the firm was valued Rs. 24,000
2. land and building were valued at Rs. 1,65,000 and plant and machinery 1,60,000.
3. provision for doubtful debts was found in excess by Rs. 400.
4. A liability of Rs. 1,200 included in sundry creditors was not likely to arise.
5. The capitals of the partners be adjusted on the basis of C’s contribution of capital to the firm. Excess
or shortfall to be adjusted through current a/c. prepare Revaluation, and partners capital a/c.
10. A, B and C are partners sharing profits and losses in 3:2:1. Their Balance sheet as at 31st March, 2016 was as
follows:
B Liabilities Rs. Assets Rs.
Sundry creditors 1,20,000 Goodwill 30,000
General Reserve 60,000 Land and building 4,50,000
Capitals Machinery 1,50,000
A 4,00,000 Debtors 2,20,000
B 3,20,000 Stock 1,80,000
C 1,80,000 Cash at bank 50,000

Total 10,80,000 Total 10,80,000

retires on 1st April, 2016 and A and C agree to share future profits in the ratio of 5 :4. On this date:
(i) Goodwill of the firm was valued at Rs 1,80,000.
(ii) Land& Building was found undervalued by 50,000 and Stock is found overvalued by 30,000.
(iii) Machinery is to be decreased to Rs 50,000.
(iv) 25% of the General Reserve was to be kept as provision for doubtful debts.
(v) Motorbike valued 20,000 was unrecorded in the books of the firm.
Prepare Revaluation a/c and Partners capital a/c.