Commerce (English Medium) Class 12 - CBSE Question Bank Solutions for Accountancy

Young India Ltd. had issued  following debentures:
(a) 1,00,000, 10% fully convertible debentures of ₹ 100 each on 1st April, 2016 redeemable by conversion after 5 years.
(b) 20,000, 10% Debentures of ₹ 100 each redeemable after 4 years , 25% Debentures in Cash and 75% by conversion.
State the amount of DRR required to be created as per the Companies Act,2013.

Manav, Nath and Narayan were partners in a firm sharing profits in the ratio of 1: 2: 1. The firm closes its books on 31st March every year. On 30th September, 2015 Nath died. On that date his capital account showed a debit balance of Rs.5,000. There was a debit balance of Rs.30,000 in the profit and loss account. The goodwill of the firm was valued at Rs.3,80,000. Nath's share of profit in the year of his death was to be calculated on the basis of average profit of last 5 years, which was Rs.90,000.

Pass necessary journal entries in the books of the firm on Nath's death.

Dev, Swati and Sanskar were partners in a firm sharing profits in the ratio of 2:2:1. On 31-3-2014 their Balance Sheet was as follows:

On 30th June 2014 Dev died. According to partnership agreement Dev was entitled to interest on capital at 12% per annum. His share of profit till the date of his death was to be calculated on the basis of the average profits of last four years. The profit of the last four years was:

On 1-4-2014, Dev withdrew Rs 15,000 to pay his medical bills

Prepare Dev's account to be presented to his executors

Name the account which is opened to credit the share of profit of the deceased partner, till the time of his death to his Capital account.

Singh, Jain, Sharma and Gupta were partners in a firm sharing profits in the ratio of 4 : 3 : 2 : 1. On 1.4.2016 their Balance Sheet was as follows:  

From the above date the partners decided to share the future profits equally. For this purpose the goodwill of the firm was valued at Rs 60,000. Partners also agreed that:

(i) Claims against Workmen Compensation Reserve was estimated at Rs 40,000 and depreciation of Rs 15,000 will be charged on fixed assets.

(ii) Capitals of the partners will be adjusted according to the new profit sharing ratio for which current accounts will be opened.

Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm.

Harihar, Hemang and Harit were partners with fixed capitals of ₹3,00,000, ₹ 2,00,000 & ₹ 1,00,000 respectively. They shared profits in the ratio of their fixed capitals. Harit died on 31st May 2020, whereas the firm closes its books of accounts on 31st March every year. According to their partnership deed, Harit’s representatives would be entitled to get a share in the interim profits of the firm on the basis of sales. Sales and profit for the year 2019-20 amounted to ₹8,00,000 and ₹2,40,000 respectively and sales from 1st April 2020 to 31st May 2020 amounted to ₹ 1,50,000. The rate of profit to sales remained constant during these two years. You are required to:

1. Calculate Harit’s share in profit.
2. Pass journal entries to record Harit’s share in profit.

A, B and C were partners sharing P & L in the ratio 5:3:2. A died on 30th June, 2019. Entry for treatment of goodwill after his death was passed as follows:

A’s profit till date of death was estimated as ₹ 1,20,000, based on the average profits of past three years. Final dues payable to A’s executors on the date of death was calculated as ₹ 8,40,000 out of which ₹ 2,40,000 was paid immediately by giving him Furniture valued for the same and balance was to be paid in three equal annual installments starting from 30 June 2020, together with an interest rate as specified in Section 37 of Indian Partnership Act, 1932. Pass necessary entry for profit share to be credited to A’s Capital and also prepare A’s executor's account till final settlement.

P, Q and R were partners in a firm sharing profits and losses in the ratio of 4: 3 : 3. P died on 30th June 2021. The partnership deed provided that on the death of a partner, his share in the profits of the firm till the date of his death will be calculated on the basis of the average profits of the last five years. The profits of the last five years were:

The firm closes its books on 31st March every year.

Calculate P's share in the profits of the firm and pass necessary journal entry for the same. 

Khushi, Namita and Manvi were partners in a firm sharing profits and losses in the ratio of 5:2:3. On 30^th June, 2022, Khushi died. The partnership deed provided that on the death of a partner, her share of profit till the date of death was to be calculated on the basis of average profit of last three years less ₹ 10,000. Profits for the last three years were:

Khushi's share of profit till the date of her death was:

Ashok, Babu and Chetan were partners in a firm sharing profits in the ratio of 4:3:3. The firm closes its books on 31st March every year. On 31st December 2016, Ashok died. The partnership deed provided that on the death of a partner his executors will be entitled for the following.

1) Balance in his capital account. On 1.4.2016, there was a balance of Rs 90,000 in Ashok’s Capital Account

2) Interest on Capital @12% per annum

3) His share in the profits of the firm in the year of his death will be calculated on the basis of the rate of net profit on sales of the previous year, which was 25%. The sales of the firm till 31st December 2016 were Rs 4, 00,000.

4) His share in the goodwill of the firm. The goodwill of the firm on Ashok’s death was valued at 4,50,000. The partnership deed also provided for the following deduction from the amount payable to the executor of the deceased partner:

• His drawings in the year of his death, Ashok’s drawings till 31.12.2016 were Rs 15,000.
• Interest on drawings @12 % per annum which was calculated on Rs 1,500.

The accountant of the firm prepared Ashok’s Capital Account to be presented to the executor of Ashok but in a hurry, he left it incomplete. Ashok’s Capital Account as prepared by the firm accountant is given below.

Your are required to complete Ashok’s Capital Account.

Bora, Singh and Ibrahim were partners in a firm sharing profits in the ratio of 5: 3: 1. On 2-3-2015 their firm was dissolved. The assets were realized and the liabilities were paid off. Given below are the Realisation Account, Partners' Capital Account and Bank Account of the firm. The accountant of the firm left a few amounts unposted in these accounts. You are required to complete these accounts by posting the correct amounts.

Vikas, Gagan and Momita 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 September 2014 Momita died. According to the provisions of partnership deed the legal representatives of a deceased partner are entitled to the following in the event of his/her death:

1) Capital as per the last Balance Sheet.

2) Interest on capital at 6% p.a. till the date of her death.

3) Her share of profit to the date of death calculated on the basis of average profits of last four years.

4) Her share of goodwill to be determined on the basis of three years purchase of the average
profits of last four years. The profits of last four years were:

The balance in Momita's capital account on 31-3-2014 was Rs 60,000 and she had withdrawn Rs 10,000 till the date of her death. Interest on her drawings was Rs 300. Prepare Momita's Capital Account to be presented to her executors.

Sunny, Honey and Rupesh were partners in a firm. On 31-3-2014 their Balance Sheet was as follows :

Honey dies on 31-12-2014. The partnership deed provides that the representatives of the deceased partner shall be entitled to:

(1) Balance in the capital account of the deceased partner.
(2) Interest on capital @ 6% p.a. upto the date of his death.
(3) His share in the undistributed profits or losses as per the balance sheet.
(4) His share in the profit of the firm till the date of his death, calculated on the basis of the rate of net profit on sales of the previous year. The rate of net profit on the sale of the previous year was 20%. Sales of the firm during the year till 31-12-2014 was Rs 6,00,000.

Prepare Honey's Capital Account to be presented to his executors.

Arun, Varun and Karan were Partners in a firm sharing profits in the ratio of 4:3:3. On 31-3-2014, their Balance Sheet was as follows :

On 30.9.2014, Karan died. The partnership Deed provided for the following to the executors of the deceased partner

(a) His share in the goodwill of the firm calculated on the basis of three year's purchase of the average profits of the last four years. The profits of the last four years were Rs 1,90,000; Rs 1,70,000; Rs 1,80,000 and Rs 1,60,000 respectively.
(b) His share in the profits of the firm till the date of his death calculated on the basis of the average profits of the last four years.
(c) Interest @8% p.a. on the credit balance, if any, in his Capital Account.
(d) Interest on his loan @12% p.a.

Prepare Karan's Capital Account to be presented to his executors, assuming that his loan and interest on a loan was transferred to his Capital Account

The following is the Balance Sheet of A, B and C as on 31st March 2014

'C' died on 300 June 2014. Under the terms of Partnership Deed, the executors of the deceased partner were entitled to:

(a) The amount standing to the credit of partner's capital account.
(b) Interest on capital @ 6% per annum.
(c) A share of goodwill on the basis of twice the average of past three years profits.
(d) A share of profit from the closing of last financial year to the date of death on the basis of last year's profit. The profits of the last three years were as follows

The firm closes its books on 31st March every year. The partners shared profits in the ratio of their capitals.

Prepare C's Capital Account to be presented to his executors.

Monika, Sonika and Mansha were partners in firm sharing profits in the ratio of 2:2:1 respectively. On 31st, March 2013, their Balance Sheet as under:

Sonika died on 30th June 2013. It was agreed between her executors and the remaining partners that:

a. Goodwill of the firm be valued at 3 years' purchase of average profits for the last four years. The average profits were Rs 2,00,000

b. Interest on capital be provided at 12% p.a.

c. Her share in the profits up to the date of death will be calculated on the basis of average profits for the last four years.

Prepare Sonika's Capital Account as on 30th June 2013.

The Balance Sheet of Sudha, Rahim and Kartik who were sharing profit in the ratio of 3:3:4. On the 31st March 2012 their Balance Sheet was as follows:

Sudha died on June 30th, 2012. 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. Sudha's share of profit or loss till the date of her death was to be calculated on the basis of sales. Sales for the year ended 31st March 2012 amounted to Rs 4,00,000 and that from 1st April to 30th June 2012 to Rs 1,50,000. The profit for the year ended 31st March 2012 was Rs 1,00,000.
c. Interest on capital was to be provided @ 6% p.a.
d. The average profits of the last three years were Rs 42,000.
e. According to Sudha's will, the executors should donate her share to "Matri Chhaya - an orphanage for girls.

Prepare Sudha's Capital Account to be rendered to her executor. Also, identify the value being highlighted in the question.

The Balance Sheet of Sadhu, Raja and Karan who were sharing profit in the ratio of 4:2:4. On the 31st March 2012 their Balance Sheet was as follows:

Sadhu died on July 31st, 2012. The partnership deed provided for the following on the death of a partner:
a. Goodwill of the firm is 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 her death was to be calculated on the basis of sales. Sales for the year ended 31st March 2012 amounted to `4,50,000 and that from 1st April to 31st July 2012 to Rs 2,70,000. The profit for the year ended 31st March 2012 was Rs 1, 25,000.
c. Interest on capital was to be provided @ 5% p.a.
d. The average profits of the last three years were Rs 55,000.
e. According to Sudha's will, the executors should donate her share to "Matri Chhaya - an orphanage for girls".

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.

Sandeep, Maheep and Amandeep were partners in a firm sharing profits in the ratio of 2:2:1. The firm closes its books on 31^st March every year. On 30^th June, 2020 Maheepdied. The partnership deed provided that on the death of a partner his executors will be entitled to the following:

1. Balance in his capital account which amounted to ₹ 1,15,000 and interest on capital till date of death which amounted to ₹ 5,000.
2. His share in the profits of the firm till the date of his death amounted to ₹ 20,000.
3. His share in the goodwill of the firm. The goodwill of the firm on Maheep’s death was valued at ₹ 1,50,000.
4. 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.