Singh, Jain, Sharma and Gupta were partners in a firm sharing profits in the ratio

of 4:3: 2:1. On 1.4.2016 their Balance Sheet was as follows:

Balance Sheet of Singh, Jain, Sharma and Gupta

as at 1.4.2016
Amount Amount
Liabilities Assets
(Rs) (Rs)
Capitals: Fixed Assets 1,60,000
Singh 50,000 Current Assets 90,000
Jain 40,000
Sharma 40,000
Gupta 40,000 1,70,000
Sundry Creditors 45,000
Workmen Compensation Reserve35,000
2,50,000 2,50,000
From the above date the partners decided to share the future profits equally. For
this purpose the goodwill of the firm was valued at Rs 60,000. Partners also
agreed that:
(i) Claims against Workmen Compensation Reserve was estimated at Rs 40,000
and depreciation of Rs 15,000 will be charged on fixed assets.
(ii) Capitals of the partners will be adjusted according to the new profit sharing
ratio for which current accounts will be opened.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of
the reconstituted firm.

Books of the Tvisha and DivyaTvisha and Divya were partners in a firm carrying on
a tiffin service in Hyderabad. Divya noticed that a lot of food is left at the end of
the day. To avoid wastage, she suggested that the same may be distributed
among the needy. Tvisha wanted it to be mixed with the food to be served the next
day.
Tvisha then gave a proposal that if her share in the profit is increased, she will not
mind free distribution of left over food. Divya happily agreed. So, they decided to
change their profit sharing ratio to 3 : 2 with immediate effect. On the date of
change in the profit-sharing ratio, the goodwill of the firm was valued at ₹ 50,000.

a. Pass the necessary adjustment entry for the treatment of goodwill.

b. State any two values highlighted in the behavior of Tvisha and Divya.

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com The total capital of the firm of Sakshi, Mehak and Megha is ₹ 1,00,000 and the
pt market rate of interest is 15%. The net profits for the last 3 years were ₹ 30,000; ₹
36,000 and ₹ 42,000. Goodwill is to be valued at 2 years purchase of the last 3
years’ super profits. Calculate the goodwill of the firm.

A, B, C and D were partners in a firm sharing profits in the ratio of 3 : 2 : 3 : 2. On

1.4.2016, their Balance Sheet was as follows:    (6)

Balance Sheet of A, B, C and D

as on 1.4.2016
Amount Amount
Liabilities Assets
(Rs) (Rs)
Capitals: Fixed Assets 8,25,000
A 2,00,000 Current Assets3,00,000
B 2,50,000
C 2,50,000
D 3,10,000 10,10,000
Sundry Creditors 90,000
Workmen Compensation Reserve25,000
11,25,000 11,25,000
From the above date partners decided to share the future profits in the ratio of 4 :
3 : 2 : 1. For this purpose the goodwill of the firm was valued at Rs 2,70,000. It was
also considered that:
(i) The claims against Workmen Compensation Reserve has been estimated at Rs
30,000 and fixed assets will be depreciated by Rs 25,000.
(ii) Adjust the capitals of the partners according to the new profit sharing ratio by
opening Current Accounts of the partners.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of
the reconstituted firm.

1. Divya purchased Jyoti's business with effect from 1st April, 2019. Profits
shown by Jyoti's business for the last three financial years were:

2016-17 ₹ 1,00,000 (including an abnormal gain of ₹ 12,500)

2017-18 ₹ 1,25,000 (after charging an abnormal loss of ₹ 25,000)
2018-19 ₹ 1,12,500 (excluding ₹ 12,500 as insurance premium on the firm's property- now to be insure
2. Calculate the value of the firm's goodwill on the basis of three year's
purchase of the average profit of the last three years.

1. X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2.

They decide to share future profits and losses in the ratio of 2 : 3 : 5 with
effect from 1st April, 2019. Following items appear in the Balance Sheet as
 at 31st March, 2019:

₹
General Reserve 75,000 Advertisement Suspense A/c (Dr.)
Workmen Compensation Reserve 12,500 Profit and Loss Account (Cr.)
Anil, Manvi and Payal are partners sharing profits and losses in the ratio 5 : 3 : 2.
Their Balance Sheet as at 31st March, 2019 stood as follows:
Liabilities ₹ Assets
Capital A/cs: Land and Building
Anil 3,50,000 Machinery
Manvi 2,50,000 Stock
Payal 3,00,000 9,00,000 Bills Receivable
General Reserve 20,000 Sundry Debtors
Workmen Compensation Reserve 30,000 Cash in Hand
Sundry Creditors 50,000 Cash at Bank
10,00,000
They decided to share profits and losses in the ratio of 2 : 2 : 1 w.e.f 1st April, 2019.
They agreed that:

i. Land and Building be appreciated by 10%.

ii. Machinery be reduced by 15%.
iii. Stock be increased to ₹1,00,000.
iv. A Provision for Doubtful Debts be created @ 5% on Sundry Debtors.
v. A Creditor of ₹5,000 is not to claim the dues.
vi. A claim on account of Workmen Compensation is estimated at ₹10,000.
vii. An expense of ₹2,000 was paid by the firm for getting the value of Land and
Building certified from a Chartered Engineer.

The profit for the year 2000-01 and 2001-02 were Rs 9,000 and Rs 6,000
respectively. Prepare Revaluation Account, Partners’ Capital Accounts,
Hari’s Loan Account (till it is paid off) and Balance Sheet as at 1.4.2003
(figure may be rounded off to nearest one rupee.)

SP 3 1. S, T, U and V were partners in a firm sharing profits in the ratio of 4 : 3 : 2 : 1.

On 1st April, 2019 their balance sheet was as follows

Balance Sheet
as at 1st April, 2019

Liabilities Amount (₹)

Sundry Creditors 80,000 Fixed Assets
Workmen Compensation Reserve 60,000 Current Assets
Capital A/c's
S 2,00,000
T 1,50,000
U 1,00,000
V 50,000 5,00,000
6,40,000
From the above date the partners decided to share the future profits in 3 : 1 :
2 : 4 ratio. For this purpose the goodwill of the firm was valued at ₹ 90,000.
The partners also agreed for the following

i. The claim for workmen compensation has been estimated at ₹

70,000.
ii. To adjust the capitals of the partners according to new profit sharing
ratio by opening partners’ current accounts.
Prepare revaluation account, partners’ capital accounts and the
balance sheet of the reconstituted firm.