Important Questions

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CBSE CLASS XII

Change in Profit Sharing Ration Among the Existing Partners

Q. 21. Raju, Shashtri and Tanka are partners in a firm, sharing profits and losses in the ratio of 5:3:2 . Their Balance Sheet as at 31st March, 2007 stood as follows:

Balance Sheet:

Liabilities Amount Assets Amount
Sundry Creditors 25,000 Cash at bank 10,000
General Reserve 20,000 Sundry Debtors 22,000
Shashtri’s Loan A/c 15,000 Less: Reserve for bad  
Capital A/c   Debtors 2000
Raju 25,000 40,000 Furniture  
Shashtri 10,000 Plant & Machinery  
Tanka 5,000 Stock  
       
       

Q. 22. The following is the balance sheet of X,Y,Z, who share profits and losses in the ratio of 2:3:1 as at 31st March , 2007:

Balance Sheet:

Liabilities Amount Assets Amount
X’s capital A/c 1,00,000 Goodwill 12,000
Y’s capital A/c 2,00,000 Land & Building 3,50,000
Z’s capital A/c 3,00,000 Investments(Market value (96,000) 1,00,000
Workmen compensation Reserve 30,000 Stock 80,000
Investment Fluctuation Reserve 10,000 Debtors 3,00,000
Creditors 5,00,000 Less: provision doubtful debts 2,90,000
    10,000 2,96,000
Cash at bank 12,000
Advertisement Suspense A/c  
  11,40,000   11,40,000

On the above date, the partners changed their profit- sharing ratio to 3:2:1 . the following issues are agreed upon :

  1. Goodwill is to be valued at 2 years purchase of average profits of last three completed years. The profits were : 2003-04- Rs. 45,000; 2004-05 – Rs. 90,000; 2005-06- Rs. 1,35,000
  2. Land & Buildings was found undervalued by Rs. 25,000 and the stock was found overvalued by Rs. 8,000.
  3. Provision for doubtful debts is to be made equal to 5% of the debtors.
  4. Claim on account of workmen compensation is Rs. 18,000. Pass the necessary Journal entries and prepare the balance Sheet of the new firm .

Paper By Mr. Rahul Kadd
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