Part A

(Accounting for Partnership Firms and Companies)

1. Sonu and Monu are partners sharing (c) 20,000 debentures
profits and losses inthe ratio of 3 : 2. Tonu (d) 22,000 debentures
is admitted for 1/5th share in profits of the Or XYZ Ltd. called first call money of 3 per
firm which he gets entirely from Sonu. share on its 50,000 shares. A shareholder
Find out the new profit sharing ratio. (1)
holding 2,750 shares failed to pay the
(a) 12 : 8:5 (b) 8: 12:5 amount. How much amount will be due on
(c) 2: 2: 1 (d) 2: 2:2 first call?
2. A company 'Vansh Ltd' has purchased an (a)? 1,41,750 (b)? 1,57,000
(c) 1,50,000 (d) 1,47.750
asset costing ? 22,00,000. Vendor issued
10% debentures of ? 100 each at 10% 3. Total capital emploved in the firm is
premium as consideration against asset {4,00,000, reasonable rate of return is 15
purchased. and profit for the year is 6,00,000. The
Calculate number of debentures to be value of goodwill of the firm as per
issued. (1) capitalisation method would be
(a) 26,000debentures (a) 41.00.000 (b) 6,00,000
(b) 24,000 debentures (c) 36,00,000 (d) 21,00,000
 Samale Paper O4 OStoge Proficlency Lovel 99

of the company proposed () Both (a) and (b)

eeting that to inculeate the (d) None of the above
fsavings among ople, he wanted
seial issue of shares. His Or When partners' capital accounts are lixed,
awas aepd which one of the following items will be
by the company. written in the partner's capital account?
35,000 shares of 100 () Partner's drawings
30 on application,350 on
Ntand?
t 20 on call. (i) Additional capital introduced by the
partner in the firn
shareholderlholding 25 shares (iii) Loan taken by partner from the firm
payhis call money and Arjun
dnotshareholder (iv) Loan advanced bypartner to the firm
holding 30 shares Codes
call money with allotment. Tarun, (a) (i) and (ii)
dtheamount
due to him after four (b)(üi) and (iv)
this
Rths explaining the reason for (c) Only (ii)
did not charge any
la,the company (d) () and (ii)
trom
interest him. Calculate the amount profits in
eived by the company on allotment, () 8. P,Q and R are partners sharing to admitZ
(al17,50.000 (b) 10,50,000 the ratio of 3:2: 1. They agree
(c)17,50,600 (d) 24,50,000 into the firm. P.Oand Ragreed to give
1/3rd, l/6th and 1/9th share of their profit.(2)
ABandC are partners sharing profits and The share of profit of Z will be .....
4 4
of (a) 11/54 (b)13/54
osses in the ratio -and
10 10 (c) 1/10 (d) 12/54
retires from the firm, Aand C decided to 10 Ltd.
share future profitsand losses in the ratio 9. During the year 2022-23, Network
issued 12% debentures of ? 100cach as per
of 3:2.Calculate gaining ratio. (1)
the details given.Amachine was
(a) I:2 (b) 1:1 purchased for ?2,18,500. The vendor was
(d) 2:1
(c)3:2 paid by the issue of 1,900 debentures at a
6. Which of the following statementsofis premium of 15%, to be redeemed at par.
incorrect about essential features The entry for the payment willbe (1)

partnership? (1) (a) Machinery We Dr 2,18,500

(a) There must be an agreement To Vendor's A/e 2,18,500
(b) There must be a business (b) Vendor's We Dr 2,18,500
(c) The business must be carried on for ooad To 12% Debentures Ae 1,90,000
profits ToSecurities Premium Reserve A/e
(d) The business must be carried on by all 28,500
the partners
(c) Vendor's A/e Dr 2,18,500
Or At the time of change in profit sharing ToMachinery AWe 2,18,500
ratio, workmen compensation reserve
existing in the balance sheet against which (d) 12% Debentures We Dr 1,90,000
no liabilities exist, is transferred to capital Securities Premium
account of partners in their ...... Reserve We Dr 28,500
(a) old profit sharing ratio To Vendor's We 2,18,500
(b)new profit sharing ratio
Or
(c) sacrificing ratio
(d) gaining ratio On28th February, 2022, the first call of?2
1. Net profit is always taken after ...... in the per share became due on 25,000 cquity
shares allotted by Walmart Ltd, Raju, a
profit and loss appropriation account. (1) holder of 500 shares did not pay the first
la) interest on partner's loan
(b) manager's commission call money.

T Calls n byau hi
class is
10. Toal capital seified in capital35M5)
? 50,09,00) which is divided in 1540,
equityshares f 1)eachand The
1 pretesense shates f? 1M) cah. atd
mpanyissiued 10,(MM)equity shares
5,000 prefereneshares, The publsc
suribed for 9,009 eguity shares and
4,500 preerenceshates utof tthe isssed
shares.What will be the subocrited capitai
amount?
(a)?50,00,90
(h)? 50,00)
c)?9,00,99)
(d)? 13,50,00)
Direction luud the following hypothetical
siluation und unswer ). No, 1l und 12
X
and Yate partners in a fir. Xgets
Commistionof 10% on the nt profits befure
charginp any comimission and Ygets
commissionof 10%,on the net profits after
charying all commission.
Profit and isns Appropriation Acunt
Dr for the ycar cnded 3ist March, 2023
Particulars Arrt ( Pariaslars
To Y's CoITHSA Ac
Io Prota Iranstergs t
Ys Capitl Nc
coission
12. YscaissiOm wil be
13. Assertienm E) Miiman
ttótis arn69t wtich ust be ubscriptionis the
b fet t B6n of the isSued amont
Alternatives
(a) Prah ssertion (A)and Reason (R,are
true asd keassr R) is the correct
explanation of Assertion (A)
(b)Brsn Assertio (A)ad Keason Rare
tre, but kezssn R) is 10t the corrers
exianation of Assertion (A)
fc)Assertion (A)is true, but Rezson (R is
fake
(d)Assertún (A)is false, but Reason (R s
tre
14. Assertion (A)Partnership agreemnent in
writing ís consideredas desirabie.
Reason (R) Written partnership agreemet
serves as a evidence in the court of law. m
Alternatives
(a) Both Assertion A) and Reason (R) are
true and Reason R) is the correct
explanation of Assertion (A)
(b) Both Assertion A) and Reason Rare
true, but Reason (R) is not the corTeCt
explanation of Assertion (A)
(c)Assertion (A)is true, but Reason R is
false
(d)Asserrion (A) is false, but Reason (R iS
true
Arrd
15. Aand B are partners stharing protits 32U
is?
equally. Interest on A's drawings
and B's drawings is 72.750. 10% ot
distributable profit is transferred to
reserve fund. Profit for the vear is
?10,00,000. Amount transferred to
reserve fund will be
(b) 1.00,600
(a)?1,00,000
(d) ¿99400
(c)? 1,00,300
 101

partnersinafirm
XandYare
16profitsandlosses in the ratio of 5:7 sharing
respectively. Their balance sheet shows
creditors at ? 1,00,000. If creditors
amountingto 12,000 are to be written-off
they are not likelyto be claimed, what
as value of creditors to be
willbetthe new sheet
chown innew balance
(a)?12,000 (b) ? 1,12,000
(c)?88,000 (d) None of these
Aand |B are partners sharing profits and
or lossesas2: 1.Cis admitted l and profit
sharingratio becomes 4:3:2. Goodwill is
valued at94.,500. Cbrings required
goodwillin cash. Goodwill amount will be
creditedd1to
a)A 14,000 and B7.000
(b)A 12,000and B9.000
(c) A 21,000
(d) A R94,500
11. Dukes Ltd issued 5,000 shares of 10each
credited as fully paid to the promoters for
their services and issued 4,000 shares of
10 each credited as fully paid to the
underwriters for their underwriting
services. Journalise these transactions.
Or XYZ Industries Ltd issued 2,000,10%
debentures of 100 each, at a premium of
10per debenture payable as follows On
application 50; On allotment 60. The
debentures were fully subscribed and all
money was duly received. Record the
journal entries in the books of company.
18. Sand P are two partners in afirm sharing
profit and losses in the ratio of 3 : 2. At the
time of distributingthe net profit between
the partners, interest oncapital was
credited @18% insteadof 8% wrongly.
Partners' capitals are given on Ist April,
2021 as ?5,00,000and3,00,000
(1) respectively. Profit on 31st March, 2022 is
72,00,000. Following adjustment entry is
passed to correct this error. Fill in the
missing information in the following
adjustment entry and give working notes. (3)
JOURNAL
Amt (Cr)
Date Particulars LF Amt (Dr)
Dr
To
(Being the adjusting entry
passed)
19. A and B are partners in a firm sharing
profits and losses in the ratio of 2:3. Their
fixed capitals as on 1st April, 2018 were
73,00,000and 4,00,000 respectively. As
per partnership deed, both partners
partners are to get monthly salary of
Z12,500 each and interest on capital
(3)
@ 8% p.a. They are to be charged interest
on drawings @ 10% p.a. Drawings during
the year ended 31st March, 2019 were A
75,000 per month and B 60,000 during
the year. Firm incurred a loss of 50,000
during the year before above adjustments.
Prepare an account showing the
distribution of profit/Moss. (3)

are partners sharing profits and losses in the ratio of 5:3:2

Ahushi, Avni and Reeta
sheet was as under
respectively. On 31st March. 2023 their balance
Balance Sheet
2023
as at 31st March,
Assets Amt ()
Amt (3)
Liabilities 50,000
1,10,000 Goodwill
Sundry Creditors 2,00,000
60,000 Buildings
Reserve Fund 60,000
Patents
Capital A/cs 3,00,000
3,00,000 Machinery
Khushi 1,00,000
2,50,000 |Stock
Avni 80,000
1,50,000
7,00,000| Debtors
Reeta Cash
80,000
8,70,000
8,70,000
 oStage Profliclenc
102
Goudwil of the lirm valued at ? 2,50,000,
date
etiiesontheabove
Recond
Reeta thec necessaryjournalentries on
Reetu's retirement, aNND0ng lhat goodwil iis tobe
accounts,
thughpartner'scapital
adiusted
Or Arun and Varun werv partlers sharing prolits in 3: 2ratio. Their balance heet on |nt Ma
follows
2023wasas Balance Sheet
US at 31st March, 2023
Amt (?) Asseta
Liabilitles Amt ()
Cash
1,37,500
1,600
Sundry Debiors
Arun
75,000 2,12,500Stock
30,000
Varun 60, 000
Oedtors 37,500|Land and Bullding 1,00,000
Plant and Machinery
62,500
2,50,000| 2,50,000

They admitted Tarun as partner on the following ternms

)Tarun is to bring t 62,500 as capital.
() They will share futureprofits in 2: 2:1 ratio.
(oi) Assets and liabilities are revalued as
Land and building at 1,25,000, depreciate plant and
for doubtful debts 2,500, stock at45,000,2 2,500 be machinery (@10% per annum, provision
reserved for bills discounted.
Show memorandum revaluation account.
21. Raj, Ron and Kia were partners in a firm sharing profits and
Ist April, 2022,their balance sheet stood as under losses in the ratio of 3: 1I:1.On
Balance Sheet
as at Ist April, 2022
Liabilities Amt () Assets Amt ()
General Reserve
Profit and Loss Alc
12,500|Land and Bulding 75,000
17,500| Machinery 25,000
Machinery Replacement Fund 8,500 Machinery
Investmernts Fluctuation Reseve Replacement Fund Investments 8,500

Workmen's Compensation Reserve 10,000Furniture 5,000

11,500|Investments (Market value 14,000)
Employees Provident Fund 15,000
Creditors 15,000|Current Assets 59,000
Captal AjCs 50,000\Avertisement Expenditure 12,500
Ra (Deferred revenue)
Ron 50,000
Kia 15,000
10,000 75,000
2,00,000 2.00.000
They admitted Vij into
account of workmen' s partnership for
1/5th share of profits on the above date. A journal claim on
entries to adjust the compensation estinmated at ? 6,500 only. Give the necessary
is
accumulated profits and losses.

Ltdissued 10,000 equity shares of
Cronic
eachpavable at 2.50 on application,
(10 allotment, 2.on first call and the
Jon
balanceof R2.50
onthe final call. All the
werefully subscribed and paid
shares
ofa:shareholder having 100 shares
except
could not pay for the final call.
whojournalentries to record these
Give
transactions. (4)
PParamountLtd. issued 2,500, 9%
debentures of? 100 each at par for cash
whichare
redeemable at 10% premium
and.also raiseda loan of ? 80,000 from
Asian Bank,for which the company placed
with the bank 50,000,9% debentures as
collateralsecurity.
the bank is obliged and
As perthe
terms,
bound to immediately release the
debentures, as soon as the loan is repaid.
How will youshow the debentures in the
halance sheet of the company assuming
that the company has recorded the issue of
debentures as collateral in the books? Also
pass the journal entries. (6)
4. DEF Company Ltd offered for public
subscription 10,000 shares of 10each at
?1l per share. Money was payable as
follows
73on application, ? 4 on allotment
(including premium), 4 on first and final
call.
Applications were received for 12,000
shares and the directors made pro-rata
allotment. Akansha, an applicant for 120
call? 3
On application 2 On first
On allotment 2 On finalcall 3
10,000
Applications were received for 2, made to
was
shares andpro-rata allotment
allthe applicants.
amount due
Allthe shareholders paid the
with the following exception
allotted1,400 shares,
(i) Rajeev, who was calls.
failed to pay the allotment and shares
i,050
(i) Sanjeev, who was allotted allotment.
paid only application and
These shares were forfeited and
reissued
subsequently 1,800 shares were Shares
20%.
as fully paid at a discount of
reissued include 1,000shares of Rajeev
and 800 shares of Sanjeev.
Pass necessary journalentries.
Z5. S and T were partners from
1st April, 2021
with capitals of 1,20,000 and
80,000
respectively. They shared profits in the
ratio of3:2. They carried on business
for two years.
In the first year ended 31st March, 2022,
they earned a profit of 1,00,000 but in the
second year ended 31st March, 2023, a
loss of ? 40,000 was incurred.
As the business was no longer profitable,
they dissolved the firm on 3lst March,
2023.
Their balance sheet is as follows
Balance Sheet
as at 31st March, 2023
Assets
Liabilities Amt () Amt ()

shares, could not pay the allotment and Creditors 40,000 Sundry Assets 2,36,000

call money and Shalu,a holder of 200 Capital Alcs

shares, failed to pay the call. All these 1,24,000
shares were forfeited. 72,000 1,96,000
Out of the forfeited shares, 150 shares (the 2,36,000 2,36.000
whole of Akansha shares being included)
were issued at 8 per share. Record journal
entries for the above transactions and Sundry assets realised ? 2,00,000 and
prepare the share forfeiture account. (6) realisation expenses were 6,000.
Or Hi Youare required to prepare realisation
Hindustan Ltd. invited application for account, partner's capital account and
L40,000equity shares of? 10 each payable cash account.
as under (6)
 Proficiency Level
OStageI
104 sheet as at 31st March.

Anuj, Vishal and Shekhar

wereequal partners. Their balance
Balance Sheet 2022 w
26. March, 2022
as at 31lst Assets Amt ()
Amt )
Liabilities 10.000 Bank 10,000
Bils Payabie 20.000Stock 10,000
Sundry Creditors 15.000| Furniture and Fixtures 14,000
22,500
Genera Resenve 3,000 Sundry Detbtors
Profit and Loss Ac () Provision for Doubtful
Debts (2,500) 20,000
Captal Acs
30.000 Buildings 60,000
Anu 20,000
Vishal 66.000
16.000
Shekhar 1,14,000 1,14,000

Shekhar decided to continue the business as o

Vishal retired on 1st April, 2022. Anuj and
partners on the following terms 28,800.
(i) Goodwill of thefirm was valued at
debts to be maintained @ 10% on debtors.
(ii) The provision for bad and doubtful
66,000.
(ii) Buildings to be increased to
(iv) Furniture and fixtures to be reduced by 4,000.
was 750.
(v) Rent outstanding (not provided for as yet)
business to pay-off Vishal. For this
The partners decided to bring in sufficient cash in the
purpose, Anuj brought ? 12,250 and Shekhar? 26,250.
Prepare the necessary ledger accounts and the balance sheet. (6

Or Anita and Sanjay are partners dealing in manufacturing plastic polythenes, with profit sharing
ratio of 2: 1.Their balance sheet as at 31st March, 2022 was as under, when the government
banned the plastic polythene and therefore, they shifted to manufacturing paper bags.
Balance Sheet
as at 31st March, 2022
Liabilities Amt (3) Assets Amt ()
Bilis Payable 60,000 |Cash in Hand 20,000
Sundry Creditors 60,000Cash at Bank 80,000
Salaries Outstanding 10,000 Sundry Debtors 40,000
Profit and Loss 30,000 Stock 60,000
Captal A/cs Machinery 1,70,000
Anita 1,50,000 90.000
Goodwill
Sanjay 1.50,0003,00,000
4,60,000 4,60,000

agreed
They admitted Sonu into partnership on lst April, sharing ratio is a
as 2: 1:1. Other terms of Sonu's 2022. The new profit
admission
(i) He will bring in ?1,20,000, through cheque,were as share
as his under of capital and 30,000 as hisshareof
goodwill.
(ii) Machinery is to be appreciated by 10%. (ii)
(iv) Aprovision for doubtful debts is tobe
Stock overvalued by ? 2,000.
(v) Creditors are unrecorded to the created at 5% on debtors.
extent of capital
Prepare the revaluation account, partners' 7,000. accounts, bank account andthe balance
sheet of the new firm after the
admission.