Model Paper-6 BRIGHT STAR ACADEMY

ACCOUNTANCY
CLASS XII
1 In the absence of partnership deed, interest on capital is allowed at the rate of: 1
a) 6% p.a. simple interest
b) 6% p.a. compound interest
c) 12% simple interest
d) None of the above

2 Which of the following items will be shown in Partner’s Capital A/c under Fixed Capital method? 1
a) Drawings from profits
b) Drawings from capital
c) Interest on drawings
d) All of the above.

3 R and S are partners sharing profits in the ratio of 2:1. S has advanced a loan of ₹1,00,000 to the firm on 1
1st October, 2020. The net profit earned by the firm for the year ending 31st March, 2021 is ₹ 90,000.
What amount will be credited to S’s capital account?
a) ₹60,000
b) ₹30,000
c) ₹29,000
d) ₹32,000

4 P and Q are partners sharing profits and losses in the ratio of 2:1 with capitals ₹1,00,000 and ₹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 ₹400
b) Credited by ₹400
c) Debited by ₹1600
d) Credited by ₹1600

5 Current accounts of partners are maintained under which method? 1

a) Fluctuating Capital method
b) Fixed Capital method
c) Both of the above
d) None of the above.

6 In the case of downward revaluation of an asset, Revaluation Account is ___________. 1

7 Arun and Vijay are partners in a firm sharing profits and losses in the ratio of 5:1. Balance Sheet (Extract) 1
Liabilities ` Assets `
Machinery 40,000

If value of machinery in the balance sheet is undervalued by 20%, then at what value will
machinery be shown in new balance sheet:
(a) 44,000
(b) 48,000
(c) 32,000
(d) 50,000

8 1
A and B are partners in a firm having a capital of ₹ 54,000 and ₹ 36,000 respectively. They admitted C for
1/3rd share in the profits C brought proportionate amount of capital. The Capital brought in by C would be:
a) ₹ 90,000
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Model Paper-6 BRIGHT STAR ACADEMY
ACCOUNTANCY
CLASS XII
b) ₹ 45,000
c) ₹ 5,400
d) ₹ 36,00

9 Sacrificing ratio is used to distribute………….in case admission of partner. 1

a). Reserves
b). Goodwill
c). revaluation profit
d). Balance in profit and loss account

10 The Journal entry for distributing Accumulated Profit in Retirement is _________________ 1

11 The goodwill in retirement will be distributed in ___________________Ratio 1

12 The journal entry for settling the account of Retiring Partner through taking a bank loan is 1
_______________________

13 State True or False from the following: 1

In case of death of a partner, the goodwill will be raised in old ratio and written off in the new Ratio.

14 State True or False from the following: 1

Calculation of profit of deceased partner’s share based on previous year’s sales is known as Turnover basis.

15 The Capital balance of Deceased partner is transferred to __________________a/c. 1

16 On dissolution of a partnership firm, profit or loss on realization is distributed 1

among the partners

(A) In capital ratio

(B) Equally
(C) In Profit sharing ratio
(D) None of the above

17 On dissolution of the firm, amount received from sale of unrecorded asset is 1

credited to:

(A) Partner's Capital Accounts

(B) Realization Account
(C) Profit and Loss Account
(D) Cash Account

18 Cash A/c is a :

(A) Nominal A/c

(B) Personal A/c
(C) Real A/c
(D) Real A/c as well as Personal A/c

19 At the time of firm's dissolution, Balance of General Reserve shown in the Balance Sheet is credited to: 1

(A) Realization Account

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Model Paper-6 BRIGHT STAR ACADEMY
ACCOUNTANCY
CLASS XII
(B) Partner's Capital Account
(C) Creditor's Account
(D) Profit & Loss Account

20 On dissolution of a firm, a partner paid `700 for firm's realisation expenses, which account will be debited? 1

(A) Cash Account

(B) Capital Account of the Partner
(C) Realization Account
(D) Profit & Loss A/c

21 A, B and C were Partners in a firm, sharing profits and losses in the Ratio 2:2:1. On 1st April, 2021, they have 3
decided to change the profit sharing ratio into 1:1:1. Pass an adjustment entry from the following for the
revaluation of assets and Reassessments of Liabilities.

Name of items Original Value Revised Value

Land and Building 5,00,000 8,40,000
Plant and Machinery 8,00,000 5,00,000
Creditors 4,00,000 3,60,000
Inventory 3,00,000 3,50,000
Debtors 4,50,000 4,40,000
Bills Receivable 2,00,000 1,80,000

22 Samiksha, Arshiya and Divya were partners in a firm sharing profits and losses in the ratio of 5: 3
3: 2. With effect from 1st April 2022, they agreed to share future profits and losses in the ratio
of 2: 5: 3. Their Balance Sheet showed a debit balance of ₹ 50,000 in the Profit and Loss Account
and a balance of ₹ 40,000 in the Investment Fluctuation Fund. The market value of an
investment is ₹30,000 against the book value of ₹50,000. Partners have decided, not to show
revised valued in the balance sheet and to pass an adjusting entry for it.
OR
Sohan and Mohan are partners sharing profits and losses in the ratio of 2:3 with the capitals of
₹ 5,00,000 and ₹ 6,00,000 respectively. On 1st January 2022, Sohan and Mohan granted loans
of ₹ 20,000 and ₹ 10,000 respectively to the firm. Determine the amount of loss to be borne by
each partner for the year ended 31st March 2022 if the loss before interest for the year
amounted to ₹ 2,500.

23 Nirmala, Divisha and Sara were partners in a firm sharing profits and losses in the 3:4:3. Books 3
were closed on 31st March every year. Sara died on 1 st February, 2022. As per the partnership
deed Sara's executors are entitled to her share of profit till the date of death on the basis of
Sales turnover. Sales for the year ended 31 st March 2021 was ₹ 10,00,000 and profit for the same
year was ₹ 1,20,000. Sales show a positive trend of 20% and percentage of profit earning is
reduced by 2%. Journalise the transaction along with the working notes.

24 A,B and C were partners sharing profits in the ratio of 3:2:1. C died on 30th June 2021. 3
Accounts are closed on 31st March every year. Sales for the year 2020-21 amounted
to ` 6,00,000. Sales from 1st April, 2021 to 30th June 2021 amounted to ` 2,40,000.
The profit for the year 2020-21 amounted to ` 30,000. The Reserve Fund account
showed a balance of `30,000. Pass Journal Entries for the deceased partner’s share in
the current year’s profits and Reserve Fund.

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Model Paper-6 BRIGHT STAR ACADEMY
ACCOUNTANCY
CLASS XII
25 Amay, Anmol and Rohan entered into partnership on 1st July, 2021 to share profits and losses in 3
the ratio of 3:2:1. Amay guaranteed that Rohan’s share of profit after charging interest on capital
@ 6% p.a would not be less than ₹ 36,000 p.a. Their fixed capital balances are: ₹ 2,00,000, ₹
1,00,000 and ₹ 1,00,000 respectively. Profit for the year ended 31st March, 2022 was
₹1,38,000.
Prepare Profit and Loss Appropriation A/c.

Or

Ajay, Manish and Sachin were partners sharing profits in the ratio 5:3:2. Their Capitals were ₹
6,00,000; ₹ 8,00,000 and ₹ 11,00,000 as on April 01, 2021. As per Partnership deed, Interest on
Capitals were to be provided @ 10% p.a. For the year ended March 31, 2022, Profits of ₹
2,00,000 were distributed without providing for Interest on Capitals.
Pass an adjustment entry and show the workings clearly.

26 A, B and C are partners in a firm sharing profits and losses in the ratio 2:2:1. B 3
retired.The Investment Fluctuation Fund and Investment shown in the balance sheet
as follows:

Liabilities ` Assets `
Investment Fluctuation Fund 40,000 Investments 2,00,000`

Pass Journal entries in the following cases.

(i) When investments are valued at ` 2,40,000
(ii) When investments are valued at ` 1,40,000
(iii) When investments are valued at ` 1,80,000

27 Read the following information carefully and answer the questions that follow: 4
X and Y are partners in 3:2. Their capital balances as on 1st April 2020 amounting to ₹2,00,000 each. On 1st
February, 2021, X contributed an additional capital of ₹1,00,000. Following are the terms of deed:
a) Interest on capital @ 6% per annum
b) Interest on drawings @ 8% per annum
c) Salary to X ₹1500 per month
d) Commission to Y @10% on net profit after charging interest on capital, salary and his commission.
Drawings of the partners were ₹20,000 and ₹30,000 respectively during the year.
Net profit earned by the firm was ₹2,08,000.

Choose the correct option based on the above information:

(1) What is the amount of Interest on capitals of X and Y:
a) ₹12,000 each
b) ₹12,000 to X and 13,000 to Y
c) ₹13,000 to X and ₹12,000 to Y
d) None of the above.
(2). What is the amount of interest on drawings of X and Y:
a) ₹ 1200 and ₹ 1800 respectively
b) ₹ 800 and ₹ 1200 respectively
c) ₹ 1200 and ₹ 800 respectively
d) ₹ 1600 ₹ 2400 respectively

(3) What is the amount of commission payable to Y?

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Model Paper-6 BRIGHT STAR ACADEMY
ACCOUNTANCY
CLASS XII
a) ₹ 15000
b) ₹ 16500
c) ₹ 20800
d) None of these

(4) What is X's share in the net divisible profit?

a) ₹ 124400
b) ₹ 83600
c) ₹ 91200
d) ₹ 60800

28 P,Q and R were partners sharing profits and losses in the ratio of 5:3:2 respectively. On 31st March.2021, 4
their B/S stood as under.
Liabilities ` Assets `
Accounts Payable 27,500 Adv Suspense a/c 12,500
General Reserve 15,000 Furniture 50,000
Capitals: P 75,000 Stock 15,000
Q 62,500 Plant 75,000
R 47,500 Machinery 25,000
Debtors 20,000
Cash at bank 30,000
2,27,500 2,27,500
R died on 1st August, 2021. It was agreed that:-
(a) Goodwill of the firm is valued at Rs.87,500.
(b) Manohar who owed us Rs.5,000 became insolvent and written off as Bad debts.
Stock was valued at `20,000 and Furniture at `62,500
(c) For calculating R’s share of Profit, previous year profit Rs.37,500 should be
considered.
(d) A sum of ` 10,500 is to paid immediately to the executors of R and the balance
to be paid in 3 equal half yearly installments together with interest 10%p.a.
Prepare R’s executors account till it is finally paid.

29 Pass Journal entries from the following: 4

a) Dissolution expenses were`8,000, out of the said expenses, `3,000 were to be borne by the firm
and the balance by Partner B. `8,000 are paid by the firm.

b) Dissolution expenses were`8,000. `3,000 were to be borne by the firm

and the balance by Partner B. The expenses were paid by Partner B.

c) Realization Expenses amounted to `5,000 were to be borne and paid by

partner A.

d) X, the Partner, is paid remuneration of `5,000 for dissolution of the firm. Realization expenses of
`8,000 are met by the firm.

30 A,B and C are three partners sharing profits in the ratio of 3:1:1. On 31st March, 2020, they decided to 6
dissolve their firm. On that date their balance sheet was as under:
Liabilities `. Assets `.
Creditors 12,000 Cash 6,400

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Model Paper-6 BRIGHT STAR ACADEMY
ACCOUNTANCY
CLASS XII
Loan 3,000 Debtors 48,400 46,000
Capital A/cs: Less: Provision 2,400
A 55,000
B 20,000 Stock in trade 15,600
C 14,000 89,000 Furniture 2,000
Sundry Assets 34,000
1,04,000 1,04,000
It is agreed that:
(i) A is to take over Furniture at ` 1,600 and Debtors amounting to `40,000 at ` 34,400 ; the
Creditors of ` 12,000 to be paid by him at this figure.
(ii) B is to take over all the Stock in Trade at ` 14,000 and some of the
Sundry Assets at `14,400(being 10% less than book value).
(iii) C is to take over the remaining Sundry Assets at 90% of the book value, less `200 as
discount and assume the responsibility for the discharge of the loan together with
accrued interest of ` 60 which has not been recorded in the books.
(iv) The expenses of dissolution were ` 540. The remaining debtors were sold to a debt
collecting agency for 50% of the book value.
Pass Journal entries.

31 A,B and C were partners sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet as on 31st March 6
2021 was as follows: They have decided to change the profit sharing ratio into 2:2:1 from 1st April
2022.
Liabilities ` Assets `
Sundry Creditors 10,000 Cash 12,000
Employee’s Provident Fund 5,000 Sundry Debtors 8,000
Profit and Loss Account 16,000 Stock 40,000
Workmen’s Compensation Fund 2,000 Furniture 13,000
Capitals: Patents 4,000
A 50,000 Buildings 60,000
B 35,000 Goodwill 6,000
C 25,000 1,10,000

1,43,000 1,43,000
(i) Goodwill is to be valued at two year’s purchase of the average profits of last four yea` Profits
were: 2018-19-` 20,000, 2019-20- ` 10,000 (Loss), 2020-21- ` 15,600.
(ii) 5% provision for doubtful debts to be made on debtors
(iii) Stock be appreciated by 10%.
(iv) Patents are valueless.
(v) Buildings be appreciated by 20%.
(vi) Sundry Creditors to be paid ` 2,000 more than the book value.
Prepare Revaluation Account and Capital Accounts .

32 A and B are partners sharing profits and losses in the ratio 3:2 with capitals of 6
`2,00,000 and `1,00,000 respectively. For the year ending 31st March, 2022 they
made a profit of `1,80,000 before allowing interest on capital @ 10% p.a ,interest
on drawings at 12% p.a. irrespective of the period and salary to A at `2,000 per
month. Their drawings during the year were A `44,000 and B `32,000
respectively. The current account balance of partners was A (Dr) `12,000 and B
(Cr) `16,000. Prepare Profit and loss appropriation account and Capital Account
when capitals are Fixed.

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Model Paper-6 BRIGHT STAR ACADEMY
ACCOUNTANCY
CLASS XII
33 Sahas and Vikas share profits 3: 2. Their balance sheet as on March 31, 2021 is as follows: 6
BALANCE SHEET as on March 31, 2021
Liabilities Amount Assets Amount
` `
Capitals Cash 22,000
Sahas 20,000 Debtors 20,000
Vikas 30,000 50,000 Less: provision -2,000 18,000
Employees Provident Fund 10,000 Stock 10,000
Investment fluctuation Fund 30,000 Investments 30,000
Contingency Reserve 15,000 Buildings 60,000
Workers compensation Fund 40,000 Plant 30,000
Creditors Advertisement expenditure 10,000
35,000 (deferred expenses)

1,80,000 1,80,000
They admit Kajal on the above date on the following terms:
(i) The new ratio among Sahas, Vikas and Kajal will be 7 : 3 : 2
(ii) Provision for doubtful debts to be increased by ` 500
(iii) Buildings to increase by ` 20,000 and stock by 2,000
(iv) There is a liability for worker’s compensation for ` 18,000
(v) Kajal to contribute ` 40,000 as her capital and ` 10,000 for goodwill
(vi) Market value of investments is ` 30,000.
The Capitals of the Partners are adjusted on the basis of Kala’s Capital. Surplus and deficit will be
adjusted through cash. Prepare necessary ledger accounts.

34 Ajit, Baljit and Chandu are partners shared profits as 6:3:1. Baljit wants to retire on March 31, 2022 when 6
their balance sheet was as follows:-

BALANCE SHEET AS ON MARCH 31, 2022

Liabilities Amount Assets Amount

` `
Capitals: Machinery 1,50,000
Ajit 80,000 Stock 60,000
Baljit 80,000 Cash 50,000
Chandu 80,000 2,40,000 Investments 40,000
Creditors 10,000 Debtors 70,000
General reserve 40,000 Advertisement expenditure 30,000
Profit and loss account 60,000 (deferred Revenue
Investment Fluctuation Reserve 20,000 expenditure)
Worker’s compensation Reserve
30,000

4,00,000 4,00,000
On the above date, Baljit retires and the other partners decide to share the profits equally. The
following are the adjustments due to Baljit’s retirement.
(i) There is a claim from the workers for injury for `5,000.
(ii) Investments are valued at ` 32,000.
(iii) Stock was found overvalued by 20%
(iv) Machinery depreciated at 10%.
(v) Create a Provision for bad debts @10%.
(vi) Goodwill of the firm is valued at ` 90,000.

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Model Paper-6 BRIGHT STAR ACADEMY
ACCOUNTANCY
CLASS XII
Capital of the new firm is fixed at `1,50,000 and the adjustments of excess and Deficit of capital
account is done through Current account.
Prepare Revaluation Account and Partner’s capital accounts.

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