Commerce (English Medium) Class 12 - CBSE Important Questions

Karam Singh and Suleman decided to start a partnership firm to manufacture low cost paper bags from the waste paper as plastic bags were creating many environmental problem. For this, they contributed capitals of Rs 2,00,000 and Rs 1,00,000 respectively on 1st April, 2012. Suleman also expressed his willingness to admit Inderjeet as a partner without capital in the firm. Inderjeet is specially abled but a very creative and intelligent friend of his. Karam Singh agreed to this. The terms of partnership were as follows:

(i) Karam Singh, Suleman and Inderjeet will share profit in the ratio of 2 : 2 : 1.
(ii) Interest on capital will be provided @6% p.a

Due to shortage of capital, Karam Singh contributed Rs 50,000 on 30th September, 2012 and Suleman contributed Rs 20,000 on 1st January 2013 as additional capital. The profit of the firm for the year ended 31st March, 2013 was Rs 2,00,300.

(a) Identify any two values which the firm wants to communicate to the society.
(b) Prepare Profit and Loss Appropriate Account of the firm for the year ending 31st March, 2013.

Ramesh and Umesh were partners in a firm sharing profits in the ratio of their capitals. On 31st March, 2013 their Balance Sheet was as follows:On the above data the firm was dissolved. 

(i) Ramesh took over 50% of stock at Rs 10,000 less than book value. The remaining stock was sold at a loss of Rs 15,000. Debtors were realised at a discount of 5%.
(ii) Furniture was taken over by Umesh for Rs 50,000 and machinery was sold for Rs 4,50,000.
(iii) Creditors were paid in full.
(iv) There was an unrecorded bill for repairs for Rs 1,60,000 which was settled at Rs 1,40,000.

Prepare Realisation Account.

Kalpana and Kanika were partners in a firm sharing profits in the ratio of 3 : 2. On 1^st April, 2013 they admitted Karuna as a new partners for 1/5th share in the profits of the firm. The Balance Sheet of Kalpana and Kanika as on 1st April, 2013, was as follows:

It was agreed that
(i) the value of Land and Building will be appreciated by 20%.
(ii) the value of plant be increased by Rs 60,000.
(iii) Karuna will bring Rs 80,000 for her share of goodwill premium.
(iv) the liabilities of Workmen's Compensation Fund were determined at Rs 60,000.
(v) Karuna will bring in cash as capital to the extent of `1/5`th share of the total capital of the new firm.

Prepare Revaluation Account, Partner's Capital Accounts and Balance Sheet of the new firm. 

For which share of Goodwill a partner is entitled at the time of his retirement?

Arun and Arora were partners in a firm sharing profits in the ratio of 5 : 3. Their fixed capitals on 1-4-2010 were: Arun Rs 60,000 and Arora Rs 80,000. They agreed to allow interest on capital @ 12% p.a. And to charge on drawings @ 15% p.a. The profit of the firm for the year ended 31-3 2011 before all above adjustments were Rs 12,600. The drawings made by Arun were Rs 2,000 and by Arora Rs 4,000 during the year. Prepare Profit and Loss Appropriation Account of Arun and Arora. Show your calculations clearly. The interest on capital will be allowed even if the firm incurs loss.  

‘B’ and ‘C’ were partners sharing profits in the ratio of 3 : 2. Their Balance Sheet as on 31-3-2011 was as follows: 

D’ was admitted to the partnership for 1/5^th share in the profits on the following terms:

(i) The new profit sharing ratio was decided as 2:2:1.

(ii) D will bring Rs 30,000 as his capital and Rs 15,000 for his share of goodwill.

(iii) Half of goodwill amount was withdrawn by the partner who sacrificed his share of profit in favour of ‘D’.

(iv) A provision of 5% for bad and doubtful debts was to be maintained.

(v) An item of Rs 500 included in Sundry Creditors was not likely to be paid.

(vi) An provision of Rs 800 was to be made for claims for damages against the firm.

After making the above adjustments the Capital Accounts of ‘B’ and ‘C’ were to be adjusted on the basis of D’s Capital. Actual cash wash to be brought in or to be paid off as the case may be.

Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of the new firm.  

G', 'E' and 'F' were partners in a firm sharing profits in the ratio of 7 : 2 : 1. The Balance Sheet of the firm as on 31^st March, 2011 was as follows: 

‘E’ died on 24^th August 2011. Partnership deed provides for the settlement of claims on the death of a partner of a partner in addition to his capital as under:

(i) The share of profit of deceased partner to be computed up to the date of death on the basis of average profits of the past three years which was Rs 80,000.

(ii) His share in profit/loss on revaluation of assets and re-assessment of liabilities which were as follows:

Land and Buildings were revalued at Rs 94,000, Machinery at Rs 38,000 and Stock at Rs 5,000. A provision of `2 1/2%` was to be created on debtors for bad and doubtful debts.

(iii) The net amount payable to 'E's executors was transferred to his Loan Account, to be paid later on.

Prepare Revaluation Account, Partner's Capital Accounts, E's Executor A/c and Balance Sheet of 'G' and 'F' who decided to continue the business keeping their capital balances in their new profit sharing ratio. Any surplus or deficit to be transferred to current accounts of the partners

How does the market situation affect the value of goodwill of a firm?

Prepare a Comparative Income Statements from the following information 

How does the nature of business affect the value of goodwill of a firm? 

Sanjay and Sameer were partners in a firm sharing profits in the ration of 2 : 3. On 31.3.2011 their Balance Sheet was as follows: 

The firm was dissolved on 1.4.2011 and the Assets and Liabilities were settled as follows:

(i) Sanjay agreed to take over land and Building at Rs 3,50,000 by paying cash;

(ii) Stock was sold for Rs 90,000.

(iii) Creditors accepted Debtors in full settlement of their claim.

Pass necessary Journal entries for dissolution of the firm.  

Why are ‘Reserve and Surplus’ distributed at the time of reconstitution of the firm?

How does the factor ‘Efficiency of Management’ affect the goodwill of a firm? 

Keith, Bina, and Veena were partners in firm sharing profits and losses equally. Their balance sheet as on 31-3-2019 was as follows: 

Veena died on 30^th June 2019. According to the partnership deed, the executors of the deceased partner were entitled to :

1. Balance in the capital account
2. Salary till the date of death @ ₹ 25,000 per annum.
3. Share of goodwill calculated on the basis of twice the average profits of the past three years.
4. Share of profit from the closure of the last accounting year till the date of death on the basis of the average of three completed years profits before death.
5. Profits for 2016-17, 2017-18 and 2018-19 were ₹ 1,20,000, ₹ 90,000 and ₹ 1,50,000 respectively.

Veena withdrew ₹ 15,000 on 1^st June 2019 for paying her daughter’s school fees. 

Prepare Veena’s capital account to be rendered to her executors.

Tripti, Atishay and Radhika were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their Balance Sheet as on 31-3-2019 was as follows:

Balance Sheet of Tripti, Atishay, and Radhika as on 31^st March, 2019. 

Tripti died on 30^th June, 2019. According to the partnership deed, the executors of the deceased partner are entitled to :
(a) Balance in partner's capital account.
(b) Salary @ ₹ 12,500 per quarter.
(c) Share of goodwill calculated on the basis of twice the average of past three years' profits and share of profits from the closure of the last accounting year till the date of death on the basis of last year's profit. Profits for 2016-17, 2017-18 and 2018-19 were ₹ 1,00,000, ₹ 1,50,000 and ₹ 2,00,000 respectively.
(d) Tripti withdrew ₹ 20,000 on 1^st May, 2019 for her personal use. Prepare Tripti's Capital Account to be rendered to her executors.

Chhavi and Neha were partners in firm sharing profits and losses equally. Chhavi withdrew a fixed amount at the beginning of each quarter. Interest on drawings is charged @ 6% p.a. At the end of the year, interest on Chhavi's drawings amounted to ₹ 900. Pass necessary journal entry for charging interest on drawings.

Answer the following question:
State any two situations when a partnership firm can be compulsorily dissolved.

Gaurav, Saurabh, and Vaibhav were partners in firm sharing profits and losses in the ratio of 2 : 2 : 1. They decided to dissolve the firm on 31^st March 2018. After transferring Sundry assets (other than cash in hand and cash at Bank) and third-party liabilities to realisation account, the assets were realized and liabilities were paid off as follows:

1. A machinery with a book value of ₹ 6,00,000 was taken over by Gaurav at 50% and stock worth ₹ 5,000 was taken over by a creditor of ₹ 9,000 in full settlement of his claim.
2. Land and building (book value ₹ 3,00,000) were sold for ₹ 4,00,000 through a broker who charged 2% commission.
3. The remaining creditors were paid ₹ 76,000 in full settlement of their claim and the remaining assets were taken over by Vaibhav for ₹ 17,000.
4. Bank loan of ₹ 3,00,000 was paid along with interest of ₹ 21,000.

Pass necessary journal entries for the above transactions in the books of the firm.

Sonu and Rajat started a partnership firm on April 1, 2017. They contributed ₹ 8,00,000 and ₹ 6,00,000 respectively as their capitals and decided to share profits and losses in the ratio of 3: 2.
The partnership deed provided that Sonu was to be paid a salary of ₹ 20,000 per month and Rajat a commission of 5% on turnover. It also provided that interest on capital be allowed at 8% p.a. Sonu withdrew ₹ 20,000 on 1^st December 2017 and Rajat withdrew ₹ 5,000 at the end of each month. Interest on drawings was charged at 6% p.a. The net profit as per Profit and Loss Account for the year ended 31^st March 2018 was ₹ 4,89,950. The turnover of the firm for the year ended 31^st March 2018 amounted to ₹ 20,00,000. Pass necessary journal entries for the above transactions in the books of Sonu and Rajat.

Suresh, Ramesh and Tushar were partners of a firm sharing profits in the ratio of 6:5:4. Ramesh retired and his capital after making adjustments on account of reserves, revaluation of assets and reassessment of liabilities stood at ₹ 2,50,400. Suresh and Tushar agreed to pay him ₹ 2,90,000 in full settlement of his claim. Pass necessary journal entry for the treatment of goodwill. Show workings clearly.