ISC Class 12th Accountancy Chapter 3 - Reconstitution of Partnership Important Questions with Answers

Asif and Ravi are partners in a firm, sharing profits and losses in the ratio of 3 : 2. Their fixed capitals as on 1st April, 2016, were ? 6,00,000 and ? 4,00,000, respectively.

Their partnership deed provides for the following:

1. Partners are to be allowed interest on their capital @ 10% per annum.
2. They are to be charged interest on drawings @ 4% per annum.
3. Asif is entitled to a salary of ? 2,000 per month.
4. Ravi is entitled to a commission of 5% of the correct net profit of the firm before charging such commission.
5. Asif is entitled to a rent of ? 3,000 per month for the use of his premises by the firm.

The net profit of the firm for the year ended 31st March, 2017, before providing for any of the above clauses
was ? 4,00,000.

Both partners withdrew ? 5,000 at the beginning of every month for the entire year.

You are required to prepare a Profit and Loss Appropriation Account for the year ended 31^st March, 2017.

Hint: Commission 5% on ? 3,64,000 = ? 18,200.

Rita, Nina and Mita are partners in a firm sharing profits and losses in the ratio of 3:2:1. Mita dies on 1st April, 2017. On the date of her death, it was decided to value goodwill on the basis of two year’s purchase of
weighted average profits of the firm for the last three years.

The profits of the last three years and weights assigned were:

You are required to:

1. Calculate the firms goodwill on the date of Mita’s death (show working formula).
2. Pass the necessary journal entry to credit Mita’s capital account with her share of goodwise.

Anita and Binita are partners in a firm. Anita had taken a loan of ? 15,000 from the firm. How will Anita’s loan be closed in the event of dissolution of the firm?

Pooja and Meher are partners in a firm. They admit Rati into the firm on the following terms:

1. Unrecorded Debtors of ? 1,000 to be brought into the books.
2. Provision for doubtful debts to be created @ 5% on Debtors.

The recorded debtors in the Balance Sheet of Pooja and Meher on the date of Rati's admission were ? 25,000.

What will be the net debtors to be shown in the Balance Sheet of the reconstituted firm?

Mita and Sita, sharing profits in, the ratio 2 : 1, decided to dissolve their partnership firm on 31^st March, 2022, on which date their Balance Sheet was as under:

The partnership firm was dissolved on the date of the Balance Sheet subject to the following adjustments:

1. Trade creditors accepted plant and machinery at an agreed valuation of 10% less than the book value and the balance in cash in full settlement of their claims.
2. Debtors of ? 1,000 proved bad.
3. Sita took over the stock at a discount of 20%.
4. Realisation expenses of ? 1,100 were paid by the firm.

You are required to prepare the Realisation Account.

Benu and Leena are partners in a firm sharing profits and losses in the ratio of 5 : 3. They admit Deepa and Erica as two new partners.
The new profit-sharing ratio is decided to be 3 : 2 : 2 : 3.
Both the new partners introduce ? 1,00,000 each as capital.
Deepa pays ? 40,000 in cash for her share of goodwill but Erica is unable to contribute any amount for her share of goodwill.
At the time of Deepa's and Erica's admission, the firm had an Advertisement Suspense Account of ? 56,000 which is written off.

You are required to pass necessary journal entries to record the above adjustments at the time of admission of Deepa and Erica.

Choose the correct order in which a partnership firm, at the time of its dissolution, will apply the amount realised from the sale of its assets, including any amount contributed by the partners, towards the payment of:

P: Partners' loan

Q: Firm's debts

R: Balance of partners' capital

S: Surplus divided amongst the partners in their profit-sharing ratio

Assertion: A revaluation account is prepared at the time of dissolution of a partnership.

Reason: A revaluation account is prepared to determine the net gain/loss on realisation of assets and settlement of liabilities.

Which one of the following is correct?

A firm having a debtor of ? 30,000 from whom the amount was due on 30^th June, 2023, gets dissolved on 31st March, 2023. The debtor cleared his dues on the date of dissolution of the firm at a discount of 4% per annum.

Give the journal entry passed by the firm to realise the payment from the debtor.

Amay and Sujoy are partners sharing profits and losses in the ratio of 3 : 1. Their Balance Sheet as at 31st March, 2023, is given below.

On 1st April, 2023, they admit Malay as a new partner for `1/4` share in the profits on the following terms:

1. Malay is to bring his share of capital of ? 1,20,000 and to pay ? 10,000 in cash for his share of goodwill.
2. Stock worth ? 45,000 is to be taken over by Amay at ? 25,000.
3. Bills Payable of ? 20,000 to be honoured by Sujoy, for which he is not to be reimbursed.
4. The capitals of Amay and Sujoy are to be adjusted on the basis of Malay’s Capital and his share in the profits, any surplus to be readjusted through the current account and deficiency through cash.

You are required to prepare the Partners’ Capital Accounts.