Assignment For New 12th Comers

GREENWOOD PUBLIC SCHOOL (2023-2024)
Sector-9, Gurugram
ASSIGNMENT – 2
Ch - 2: Change in Profit Sharing Ratio Among the Existing Partner & Admission of a Partner
Name: Subject: Accountancy (055)
Class: XII
A. Fill in the blanks :-

1) In the case of downward revaluation of an asset, Revaluation Account is ___________.
2) In case of upward revaluation of a liability, Revaluation Account is __________.
3) At the time of admission of a partner new profit-sharing ratio is used for sharing future ___________
4) At the time of admission, if claim of Workmen Compensation is more than the Workmen
Compensation Reserve, the amount of Workmen Compensation Reserve and the claim is transferred
to ______________________ account.
5) At the time of admission, if the book value and the market value of investment is same Investment
Fluctuation Reserve is transferred to __________ account of the old partners in their
______________ ratio.
B. Multiple choice Questions :-

6) Any change in the relationship of existing partners which results in an end of the existing agreement
and enforces making of new agreement is called:
(a) Revaluation of partnership (b) Reconstitution of partnership
(c) Realisation of partnership (d) None of the above
7) The ratio in which a partner surrenders his share in favour of a partner is known as:
(a) New profit-sharing ratio (b) Sacrificing Ratio
(c) Gaining Ratio (d) Capital Ratio
8) In case of change in profit-sharing ratio, the accumulated profits are distributed to the partners in
(a) New Ratio (b) Old Ratio
(c) Sacrificing Ratio (d) Equal Ratio
9) X, Y and Z are partners sharing profits and losses in the ratio of 5:3:2. They decide to share the future
profits in the ratio of 3:2:1. Workmen compensation reserve appearing in the balance sheet on the
date if no information is available for the same will be:
(a) Distributed among the partners in old profit sharing ratio
(b) Distributed among the partners in new profit sharing ratio
(c) Distributed among the partners in capital ratio
(d) Carried forward to new balance sheet without any adjustment
10) X and Y share profits in the ratio of 3:2. Z was admitted as a partner who sets 1/5 share. New profit-
sharing ratio, if Z acquires 3/20 from X and 1/20 from Y would be
(a) 9 : 7 : 4 (b) 8 : 8 : 4 (c) 6 : 10 : 4 (d) 10 : 6 : 4
11) A and B share profits and losses in the ratio of 3 : 1, C is admitted into partnership for 1/4 share.
The sacrificing ratio of A and B is:
(a) equal (b) 3 : 1 (c) 2 : 1 (d) 3 : 2.
12) At the time of admission of a new partner, general reserve appearing in the old balance sheet is
transferred to:
(a) All Partner’s Capital Account (b) New Partner’s Capital Account
(c) old partner’s capital account (d) none of the above
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C. Match the following & write correct answers :-
13)
COLUMN A COLUMN B
(i) Revaluation A/C is opened (a) At the time of retirement
(ii) Sacrificing ratio (b) At the time of death
(iii) Valuation of goodwill (c) At the time of Admission
(d) At the time of reconstitution of partnership firm
14)
COLUMN A COLUMN B
(i) Old ratio – New ratio (a) Gaining ratio
(ii) Goodwill (b) Fixed Assets
(iii) General reserve (c) Credit Balance
(iv) New ratio- Old ratio (d) Sacrificing Ratio
D. The following question consist of two statements, one labelled as the ‘Assertion (A) ‘and the other as
‘Reason (R)’. You are to examine these two statements carefully and select the answers using the code
given below:
(a) Both A and R are individually true and R is the correct explanation of A
(b) Both A and R are individually true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true.
15) Assertion (A): It is necessary to show the true position of the firm at the time of admission of a new
partner.
Reason (R): The gain or loss on revaluation which is transferred to all the partner’s capital account
in new profit-sharing ratio.
E. Short Answer Type Questions:-
16) Harish and Manish are partners sharing profits in the ratio of 4:1. They decided to distributed profits
equally starting 1st April 2019. Their balance sheet as on 31st March 2019 shows a balance of
advertisement suspense of ₹40,000. Pass the journal entry at the time of change in profit-sharing ratio.
17) A firm’s average profits are 1,80,000. Capital invested in the business is 5,00,000 and the normal rate
of return is 20% . Calculate the value of goodwill of the firm.
(i) On the basis of Capitalisation of Average Profit.
(ii) On the basis of Capitalisation of Super Profit
18) Anant, Gulab and Khushbu were partners in a firm sharing profits in the ratio of 5 : 3 : 2. From 1st
April, 2014, they decided to share the profits equally. For this purpose, the goodwill of the firm was
valued at ₹ 2,40,000.
Pass necessary journal entry for the treatment of goodwill on change in the profit sharing ratio of
Anant, Gulab and Khushbu.
F. Long Answer Type Questions:-
19) P, Q and R were partners in a firm sharing profits in the ratio of 1 : 1 : 2. On 31 st March, 2018, their
balance sheet showed a credit balance of ₹ 9,000 in the profit and loss account and a Workmen
Compensation Fund of ₹ 64,000. From 1st April, 2018 they decided to share profits in the ratio of
2 : 2 : 1. For this purpose it was agreed that:
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(a) Goodwill of the firm was valued at ₹ 4,00,000.
(b) A claim on account of workmen compensation of ₹ 30,000 was admitted.
Pass necessary journal entries on reconstitution of the firm
20) Ram, Shyam and Hari were in partnership sharing profits in the ratio of 3 : 2 : 1. The Balance Sheet
as at 31.3.2022 was as follows :
BALANCE SHEET:
As On 31.03.2022
Liabilities (₹) Assets (₹)
Bills Payable 20,000 Cash 40,000
Creditors 20,000 Bills Receivable 5,000
General Reserve 30,000 Debtors 15,000
Capitals Stock 50,000
Ram 50,000 Furniture 20,000
Shyam 30,000 Machinery 30,000
Hari 25,000 1,05,000 Goodwill 15,000
1,75,000 1,75,000
On 01.04.2022 partners decided to share profits equally. For this purpose, it was further agreed
that.
1. Goodwill of the firm should be valued at ₹ 30,000.
2. Furniture and Machinery is to be revalued at ₹ 25,000 and ₹ 35,000 respectively.
3. Value of Stock is to be reduced by ₹ 4,000.
You are required to give necessary journal entries to give effect to the above arrangement and
prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the firm after
reconstitution.
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GREENWOOD PUBLIC SCHOOL (2023-2024)

A. Fill in the blanks :-

B. Multiple choice Questions :-

F. Long Answer Type Questions:-

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