Time 2 hours 60 marks

General Instruction:
Q.1 to 13 are carry 1 marks
Q.14 to 22 are carry 3 marks
Q.23 to 26 are carry 5 marks
Q.1) The amount due to deceased partner is transferred to the credit of
a) his current account b) remaining partners’ capital account
c) his executor’s account d) None of these
Q.2) Aman, Manish and Karan were partners sharing profits in the ratio of 4:5:3. Karan died and remaining
partners decided to share profits in the ratio of 7:8 the gaining ratio will be.
a) 8:7 b) 4:5
c) 1:1 d) 2:1
Q.3) A, B and C were partners sharing profits in the ratio of 3:2:1. B died on 30 th June, 2023. Profit share of
the deceased partner from the beginning of the financial year was to be estimated based on sales up to the
date of death and profit of the previous year. Net profit earned in the previous year was 20% of net sale.
Net sales for the period of three months ended 30th June, 2023 was 6,00,000. The profit share of B will be
a) 35,000 b) 40,000
c) 20,000 d) 60,000
Q.4) Choose the odd one:
a) Revaluation account b) Realisation of assets
c) Adjustment of goodwill d) Gaining ratio
Q.5) The partnership deed does not have a clause on rate of interest to be paid on amount due to heirs of
deceased partner. At what rate interest on the outstanding amount shall be payable?
a) At the rate at which the banks grant loan
b) At the rate of interest provided in the partnership act, 1932
c) At the rate of interest demanded by the heirs of the deceased partner
d) 8% p.a.
Q.6) Which of the following is true?
a) Revaluation account is unaffected when an unrecorded asset is taken over by the executors of a
deceased partner.
b) Revaluation account is debited with the decrease in the value of creditors on the death of a partner
c) Revaluation account is credited when an unrecorded asset is sold on the death of a partner
d) Revaluation account is unaffected when revaluation expenses are paid by a partner
Q.7) Pawan, Karman, and Harman were partners sharing profits equally. Pawan died on 31st July, 2023.
Journal entry passed for Pawan’s share of loss for the intervening period will be:
a) Pawan Capital a/c dr.
To Profit and Loss Suspense a/c
b) Pawan Capital a/c dr.
To Karman’s Capital a/c
c) Pawan’s Capital a/c dr.
To Profit and Loss a/c
d) Profit & Loss Suspense a/c dr.
To Pawan’s Capital
Q.8) A, B and C are partners sharing profit and losses in the ratio of 2:2:1. B died, at that time goodwill of
the firm was valued at 30,000. What contribution has to be made by A and C in order to pay B’s Executor?
a) 20,000 and 10,000 b) 15,000 and 15,000
c) 8,000 and 4,000 d) 6,000 and 6,000
Q.9) A, B and C are partners. C expired on 18th December, 2019 and as per the agreement, surviving
partners A and B directed the accountant to prepare financial statement as on 18 th December, 2019 and
accordingly the share of profit of C (deceased partner) was calculated as 12,00,000. Which account will be
debited to transfer C’s share of profit?
a) Profit & Loss Suspense Account b) Profit and Loss Appropriation Account
c) Profit and Loss Account d) None of these
Q.10) Loan by the deceased partner to the firm is transferred to
a) the debit of his current account b) the credit of his capital account
c) the debit of remaining partners’ capital accounts d) the credit of remaining partners’ capital account
Q.11) Om, Ram and Shanti were partners sharing profits in the ratio of ½, 2/5 and 1/10. Find the new
profit-sharing ratio of the remaining partners. If Shanti dies.
Q.12) A, B and C were partners sharing profits in the ratio of 4:3:2. A died. B and C will share profits in the
ratio of 2:1. Determine the gaining ratio.
Q.13) X, Y and Z were partners in a firm sharing profits in the ratio of 3:2:1. The firm closes its books on 31 st
March every year. Y died on 30th June, 2023. On Y’s death goodwill of the firm was valued at 60,000. Y’s
share in the profits of the firm till the date of his death was to be calculated on the basis of previous years
profits which was 1,50,000. Pass necessary journal entries for goodwill and Y’s share of profit at the time of
his death.
Q.14) P, R and S are in partnership sharing profits 4/8, 3/8 and 1/8 respectively. It is provided in the
partnership deed that on the death of any partners his share of goodwill is to be valued at one-half of the
net profit credited to his account during the last four completed years
R died on 1st April, 2023. The firm’s profits for the last four years ended 31st March were as:
2020 – 1,20,000; 2021 – 80,000; 2022 – 40,000; 2023 – 80,000
a) Determine the amount that should be credited to R in respect of his share of Goodwill.
b) Pass journal entry for adjustment of goodwill.
Q.15) Dinkar, Navita and Vani were partners sharing profits and losses in the ratio of 3:2:1. Navita died on
30th June, 2017. Her share of profit for the intervening period was based on the sales during the period,
which were 6,00,000. The rate of profit during the past four years had been 10% on sales. The firm closes
its books on 31st March every year. Calculate Navita share of profit
Q.16) Anil, Sunil and Hari were partners sharing profits equally. Sunil died on 31 st December, 2022. In terms
of the partnership deed, accounts were prepared for the period ended 31 st December, 2022 and net profit
was determined at 6,00,000. Pass the journal entry for the profit share of the partners.
Q.17) A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. On 25 th February,
2019, B died. B’s share of profit till the date of his death was calculated at 5,000. Pass the necessary journal
entry for the same in the books of the firm.
Q.18) Ram, Manu and Hari were partners in a firm. Hari died on 30th June, 2023. His share of profits from
the closure of the last accounting year till the date of death was to be calculated on the basis of the average
of three completed financial years of profits before death. Profit for the years ended 31 st March, 2021;
2022 and 2023 were 1,10,000; 1,20,000 and 1,30,000 respectively. Calculate Hari share of profit till the date
of his death and pass necessary journal entry for the same.
Q.19) X, Y and Z were partners sharing profits and losses in the ratio of 3:2:1. Y died on 30 th June 2022.
Profit from 1st April, 2022 to 30th June,2022 was 3,60,000. X and Z decided to share future profits in the
ratio of 3:2 with effect from 1st July, 2022.
Pass the necessary journal entries to record Y’s share of profit up to the date of death.
Q.20) X, Y and Z were partners in a firm. Z died on 31st May, 2022. His share of profit from the closure of the
last accounting year till the date of death was to be calculated on the basis of the average of three
completed years of profits before death. Profits for the years ended 31st March, 2020; 2021 and 2022 were
18,000; 19,000 and 17,000 respectively.
Calculate Z’s share of profit till his death and pass necessary journal entry for the same when:
a) Profit sharing ratio of remaining partners does not change and
b) Profit sharing ratio of remaining partners changes and new ratio being 3:2
Q.21) Ajay, Bhawna and Shreya were partners sharing profits in the ratio of 2:2:1. On 1st July, 2022 Shreya
died. The books of accounts are closed on 31st March every year. Sales for the year 2021-22 5,00,000 and
that from 1st April to 30th June, 2022 were 1,40,000. Rate of profit during the past three years had been
10% on sales. Since Shreya legal representative was her only son, who is differently abled, it was decided
that the profit for the purpose of settling Shreay account is to be calculated as 20% on sales.
Calculate Shreyas share of profits till the date of her death and pass necessary journal entry for the same.
Q.22) Raman, Param and Karan were partners sharing profits and losses in the ratio of 3:2:1. Param died on
31st December, 2022. Account of the firm are closed on 31st March every year. Sales for the year ended 31st
march, 2022 was 12,00,000 and sales for the nine months ended 31 st December, 2022 was 6,00,000. Loss
for the year ended 31st March, 2022 was 90,000. Calculate deceased partners’ share of profit/loss from the
beginning of the accounting year up to 31st December, 2022.
Q.23) 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 ₹1,15,000and 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.

Q.24) The balance sheet of Sadhu, Raja and Karan who were sharing profits in the ratio of 4:2:4 as at 31st March,
2023 was as follows:

Liabilities Amount Assets Amount

Bills Payable 20,000 Cash 26,000
Loan 22,000 Stock 64,000
General Reserve 10,000 Investments 85,000
Capital a/c Land and building 97,000
Sadhu 80,000 Sadhu’s loan 20,000
Raja 60,000
Karan 1,00,000 2,40,000
2,92,000 2,92,000
st
Sadhu died on 31 July, 2023. The partnership deed provided for the following on the death of a partner:
a) Goodwill of the firm be valued at two years purchase of average profits for the last three years.
b) Sadhu’s share of profit or loss till the date of his death was to be calculated on the basis of sales. Sales
for the year ended 31st March, 2023 amounted to 4,50,000 and that from 1st April to 31st July, 2023
2,70,000. The profit for the year ended 31st March, 2023 was calculated as 1,25,000.
c) Interest on capital was to be provided @5% p.a.
d) The average profits of the last three years were 55,000
Prepare Sadhu’s capital account to be rendered to his executor.
Q.25) The balance sheet of X, Y and Z as at 31st March, 2023 was:

Liabilities Amount Assets Amount

Bills payable 2,000 Cash at bank 5,800
Employees provident fund 5,000 Bills receivables 800
Workmen compensation reserve 6,000 Stock 9,000
General reserve 6,000 Sundry debtors 16,000
Loans 7,100 Furniture 2,000
Capital a/c Plant and machinery 6,500
X 22,750 Building 30,000
Y 15,250 Advertisement suspense a/c 6,000
Z 12,000 50,000
76,100 76,100
The profit-sharing ratio was 3:2:1. Z died on 31st July, 2023. The partnership deed provides that:
a) Goodwill is to be calculated on the basis of three years’ purchase of the five years’ average profit. The
profit for the years ended 31st March, were 2023 – 24,000; 2022 – 16,000; 2021 – 20,000; 2020 – 10,000;
and 2019 – 5,000.
b) The deceased partner to be given share of profits till the date on the basis of profits for the previous
year.
c) The assets have been revalued as: Stock 10,000; Debtor 15,000; Furniture 1,500; Plant and machinery
5,000; Building 35,000. A bill receivable for 600 was found worthless.
d) A sum of 12,233 was paid immediately to Z’s executors and the balance to be paid in two equal annual
instalments together with interest @10% p.a. on the amount outstanding.
Give journal entries and show the Z’s executor account till it is finally settled.
Q.26) Arun, Bhim and Nakul are partners in a firm sharing profit in the ratio of 1:1:3. Their capital account
showed the following balances on 1st April,2020:
Arun 2,00,000; Bhim 1,50,000 and Nakul 4,50,000
Firm closes its accounts every year on 31st March. Bhim died on 31st March, 2021. In the event of death of
any partner, the partnership deed provides for the following:
i) Interest on capital will be allowed to deceased partner only from the first of day of the accounting year till
the date of his death @10% p.a.
ii) The deceased partner’s share in the goodwill of the firm will be calculated on the basis of 2 years
purchase of the average profit of the last three years. The profit of the firm for the last three years ended
31st March were 2019 – 90,000; 2020 – 2,00,000 and 2021 – 1,60,000.
iii) His share of profit till the date of death: The profit of the firm for the year ended 31st March, 2021 was
1,60,000 before providing for interest on capital. Bhim Executors was paid the sum due in two equal annual
instalments with interest @10% p.a.
Prepare Bhim capital account as on 31st March, 2021 to be presented to his executor and his executors loan
account for the year ending 31st March, 2022 and 2023.