BHATIA COMMERCE ACADEMY 1 PH: 92-68-028-460

BHATIA COMMERCE ACADEMY (EDUGEM)

Q1. A, B and C are in partnership sharing profits and losses in the ratio of 5 : 4 : 1. Two
new partners D and E are admitted. Profits are to be shared in the ratio of 3 : 4 : 2 : 2 : 1
respectively. D is to pay ₹ 30,000 for his share of goodwill but E is unable to pay for
goodwill. Both the new partners introduced ₹ 40,000 each as their capital. (6)
Pass necessary Journal entries.

Q2. Shubhi and Revanshi were partners in a firm sharing profits and losses in the ratio of
3:2. Their Balance Sheet as at 31st March, 2023 was as follows:
Balance Sheet of Shubhi and Revanshi as at 31st March, 2023
Liabilities ₹ Assets ₹
Capital Accounts : Fixed Assets 90,000
Shubhi 60,000 Stock 38,000
Revanshi 32,000 92,000 Debtors 30,000
General Reserve 30,000 Cash 52,000
Bank Loan 18,000
Creditors 70,000
2,10,000 2,10,000

On 1st April, 2023, they admitted Pari into the partnership on the following terms:
(i) Pari will bring ₹ 50,000 as her capital and ₹ 50,000 for her share of premium for
goodwill for 1/4th share in the profits of the firm
(ii) Fixed assets were depreciated @ 30%.
(iii) Stock was valued at ₹ 45,000.
(iv) Bank loan was paid off.
(v) After all adjustments capitals of Shubhi and Revanshi were to be adjusted taking
Pari's capital as the base. Actual cash was to be paid off or brought in by the old
partners as the case may be.
Prepare Revaluation Account and Partners’ Capital Accounts. (10)

Q3. On 31st March,2019 the Balance Sheet of Madan and Mohan as at 31st
March,2019
Balance Sheet of Madan and Mohan as at 31st March,2019
Liabilities ₹ Assets ₹
Creditors 28,000 Cash at Bank 10,000
General Reserve 10,000 Debtors 65,000
Employees’ Provident Fund 22,000 Less: P/D/D 5,000 60,000
Capital Accounts : Stock 33,000
Madan 60,000 Patents 57,000
Mohan 40,000 1,00,000
1,60,000 1,60,000
They decided to admit Gopal on 1st April, 2019 for 1/5th share which Gopal acquired
wholly from Mohan on the following terms:

जय श्री राम* जय श्री राम* जय श्री राम* जय श्री राम* जय श्री राम* जय श्री राम* जय श्री राम*
BHATIA COMMERCE ACADEMY 2 PH: 92-68-028-460

(i) Gopal shall bring ₹10,000 as his share of premium for Goodwill.
(ii) A debtor whose dues of ₹3,000 were written off as bad debt paid ₹2,000 in full
settlement.
(iii) A claim of ₹5,000 on account of workmen's compensation was to be provided for.
(iv) Patents were undervalued by ₹2,000. Stock in the books was valued 10% more than
its market value.
(v) Gopal was to bring in capital equal to 20% of the combined capitals of Madan and
Mohan after all adjustments.
Prepare Revaluation Account, Capital Accounts of the Partners and the Balance Sheet
of the new firm. (10)

Q.4 (average profit method when past adjustments are made). (4)
Om, Shanti and Namo are partners sharing profit and losses equally. they agreed to admit Dev
for equal share for this purpose, goodwill is to be valued at four years purchase of average
profit of last five years. Profit for the past five years was:
31st march 31st march 31st march 31st march 31st march
Year ended
2017 2018 2019 2020 2021
Profit/(loss)(₹) 30,000 70,000 1,00,000 1,40,000 (1,20,000)
On 1 April 2020, 5 cycles costing ₹20,000 were purchased and were wrongly debited to
travelling expenses. Depreciation on cycles was to be charged @25% p.a calculate value of
goodwill.

Q.5. The average net profits expected in future of a company are ₹ 3,000 per year. The
average capital employed in the business by firm is 20,000. The normal rate of return on
the capital employed in similar business is 10%. Calculate the goodwill of the firm by
Capitalisation Method of Super Profits. (4)

Q.6. The capital of the firm of Sharma and Verma is ₹ 2,00,000 and the market rate of
interest is 15%. Annual salary to partners is ₹ 12,000 each. The Profits for the last
Three years were ₹60,000, ₹ 72,000, ₹ 84,000. Goodwill is to Valued at two years
Purchase of last 3 years average super profits. Calculate the goodwill of the firm. (4)

Q.7. On April 1st, 1998 an existing firm had assets ofRs75000 including cash of Rs5000. The
partner's capital accounts showed a balance of Rs60000 and reserve constituted the rest. If the
normal rate of return is 10% and the goodwill of the firm is valued at Rs24000 at 4 years
purchase of super profits. find the average profits of the firm. (4)

Q.8. On April 1st, 1994 an existing firm had assets of ₹ 75000 including cash of ₹ 5,000. Its
creditors amounted to Rs5000 on that date. The firm had a reserve fund of Rsl0,000
while partner's capital accounts showed a balance of ₹ 60000. If the normal rate of
return is 20% and the goodwill of the firm is valued at ₹ 24,000 at 4 years purchase of
super profits find the average profits per year of the firm. (3)

जय श्री राम* जय श्री राम* जय श्री राम* जय श्री राम* जय श्री राम* जय श्री राम* जय श्री राम*