RKG INSTITUTE BY CA PARAG GUPTA

B - 193 ,SECTOR 52 , NOIDA

ADMISSION
Class 12 - Accountancy
Time Allowed: 1 hour and 30 minutes Maximum Marks: 40

Section A
1. X, Y and Z are partners sharing profits in the ratio of 4:3:2. They admit a new partner M in the partnership firm [1]
for 1

3
share in future profit. What will be the new ratio of all the partners?

a) 8 : 6 : 2 : 1 b) 8 : 6 : 5 : 3

c) 8 : 6 : 4 : 2 d) 8 : 6 : 4 : 9
2. Niyati and Aisha were partners in a firm sharing profit and losses in the ratio of 4 : 3. They admitted Bina as a [1]
new partner. Niyati sacrificed 1

4
th from her share and Aisha sacrificed 1

7
th from her share in favour of Bina.
Bina's share in the profits of the firm will be:

a) b)
7 10

16 49

c) 2

7
d) 11

28

3. Aditi and Bobby were partners with capitals of ₹ 30,000 each. They admitted Chetan as a new partner for 1

4
[1]
share in the profits of the firm. Chetan brought ₹ 48,000 as his capital. On Chetan's admission, the Profit and
Loss Account of the firm showed a credit balance of ₹ 24,000. Value of goodwill of the firm on Chetan's
admission will be:

a) ₹ 40,000 b) ₹ 60,000

c) ₹ 75,000 d) ₹ 30,000
4. C, D and E were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. They admitted F as a new [1]
partner for 1

4
share in the profits which was sacrificed by C, D and E in the ratio of 2 : 1 : 2. C's new share in the
profits will be:

a) 2

5
b) 3

c) d)
3 4

10 20

5. Reshma and Priyanka are partners in a firm. They admit Anjali on 1st April, 2022, for 1
share in the profits of [1]
4

the firm. Anjali acquired her share as 1

12
from Reshma and the remaining from Priyanka. The Sacrificing ratio of
the old partners will be:

a) 1 : 2 b) 1 : 1

c) 1 : 11 d) 11 : 12
6. Assertion (A): Admission of a partner does not mean dissolution of the firm but dissolution of old partnership [1]
Reason (R): Admission of a partner means reconstitution of the partnership whereby old partnership ceases to
exist and new partnership comes into existence. However, the firm continues.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the

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 explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

7. Assertion (A): Revaluation A/c is prepared at the time of admission of a partner. [1]
Reason (R): It is required to adjust the values of assets and liabilities at the time of admission of a partner, so
that the true financial position of the firm is reflected.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

Section B
8. Read the text carefully and answer the questions: [3]
Given below is the balance sheet of A and B who are partners in a firm sharing profits in the ratio of 3:2
Balance Sheet
as at 1st April, 2019

Liabilities Amt (₹) Assets Amt (₹)

Sundry Creditors 3,00,000 Land and Building 4,00,000

Profit and Loss A/c 1,00,000 Plant and Machinery 3,00,000

Capital A/C s Stock 70,000

A 4,00,000 Debtors 1,80,000

B 2,00,000 6,00,000 bank 50,000

10,00,000 10,00,000

On the same date, C is admitted as a partner on the following terms

i. A gives rd of his share, while B gives th from his share to C.
1 1

3 10

ii. Goodwill is valued at 2 years' purchase of the average profits of the last 5 years, which does not bring his
share of goodwill in cash.
(a) What was the amount of firm's goodwill?

a) ₹2,80,000 b) ₹84,000

c) ₹1,64,000 d) ₹1,40,000
(b) The given balance of profit and loss account will be debited in ________ partners' accounts in the
________ ratio.

a) old, old profit sharing b) all, new profit sharing

c) old, new profit sharing d) old, sacrificing

(c) What was the sacrificing ratio of A and B?

a) 2 : 1 b) 3 : 2

c) 3 : 10 d) 1 : 1

Question No. 9 to 11 are based on the given text. Read the text carefully and answer the questions: [3]
Rahul and Modi are two partners into firm sharing profits equally. On 1st January 2020, they decided to admit Vikas as
a new partner into the firm for 1

5
th share. Vikas brings 10,00,000 for his share to capital and premium of goodwill in

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cash. Half goodwill is withdrawn by the old partners. Goodwill of the firm is valued on the basis of one year purchase
of profits or losses of preceding last 3 years. Profits of last four years are ₹6,00,000 in 2016, ₹7,00,000 in 2017,
₹8,00,000 in 2018 and ₹15,00,000 in 2019.
9. Which of the following is a right of Vikas?

a) All of these b) Share profits of firm

c) Inspect books of accounts d) Share assets in the firm

10. What was the value of goodwill of the firm?

a) ₹9,00,000 b) ₹8,00,000

c) ₹7,00,000 d) ₹10,00,000
11. What was the amount of capital brought in by Vikas?

a) ₹22,00,000 b) ₹10,00,000

c) ₹8,00,000 d) Can't be determined

Question No. 12 to 14 are based on the given text. Read the text carefully and answer the questions: [3]
Sterling enterprises is a partnership business with Ryan, Williams and Sania as partners engaged in the production and
sales of electrical items and equipment. Their capital contributions were ₹ 50,00,000, ₹50,00,000 and ₹80,00,000
respectively with the profit-sharing ratio of 5 : 5 : 8. As they are now looking forward to expanding their business, it
was decided that they would bring insufficient cash to double their respective capitals. This was duly followed by Ryan
and Williams but due to unavoidable reasons Sania could not do so and ultimately it was agreed that to bridge the
shortfall in the required capital a new partner should be admitted who would bring in the amount that Sania could not
bring and that the new partner would get share of profits equal to half of Sania's share which would be sacrificed by
Sania only.
Consequent to this agreement Ejaz was admitted and he brought in the required capital and ₹ 30,00,000 as premium for
goodwill.
12. For which of the following purposes, Ejaz was admitted in the firm?

a) Benefitting from goodwill of person b) Efficiency of experienced person

c) Acquiring managerial skilts d) Procuring additional capital

13. What will be a new profit-sharing ratio of Ryan, Williams, Sania and Ejaz?

a) 5 : 5 : 2 : 2 b) 5 : 5 : 8 : 8

c) 1 : 1 : 1 : 1 d) 5 : 5 : 4 : 4
14. What is the amount of capital brought in by a new partner Ejaz?

a) ₹40,00,000 b) ₹80,00,000

c) ₹50,00,000 d) ₹30,00,000
Section C
15. Read the text carefully and answer the questions: [4]
Rohit and Monu are two partners into a firm sharing profits equally. On 1st January 2020, they decided to admit
Vikas as a new partner into the firm for 1

5
th share. Vikas brings ₹ 10,00,000 for his share to capital and premium
of goodwill in cash. Half goodwill is withdrew by the old partners' Goodwill of the firm is valued on the basis of

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 one year purchase of profits or losses of preceding last 3 years Profits of last four years are ₹ 6,00,000 in 2016; ₹
7,00,000 in 2017; ₹ 8,00,000 in 2018 and ₹ 15,00,000 in 2019.
(a) What was the value of the goodwill of the firm?

a) ₹ 9,00,000 b) ₹ 10,00,000

c) ₹ 8,00,000 d) ₹ 7,00,000
(b) What was the amount of capital brought in by Vikas?
i. ₹ 2,00,000
ii. ₹ 8,00,000
iii. ₹ 10,00,000
iv. ​Can’t be determined

a) Option (iii) b) Option (ii)

c) Option (i) d) Option (iv)

(c) What was the goodwill share given to Monu?

a) ₹ 4,00,000 b) Can’t be determined

c) ₹ 1,00,000 d) ₹ 2,00,000
(d) Which account is debited when the goodwill is withdrawn by partners?

a) cash/bank a/c b) goodwill a/c

c) premium for goodwill a/c d) partner’s capital a/c

Question No. 16 to 19 are based on the given text. Read the text carefully and answer the questions: [4]
Rahul and Mohit were partners in a firm sharing profits and losses in the ratio of 4:3. The following is the balance sheet
of the firm as on 31st December, 2019.
Balance Sheet
As at 31st December, 2019

Liabilities Amt (₹) Assets Amt (₹)

Sundry Creditors 20,000 Cash 14,800

Bills Payable 3,000 Debtors 20,500

Bank Overdraft 17,000 (-) Provision for Doubtful Debts (300) 20,200

Capital A/c s

Rahul 70,000 Stock 20,000

Mohit 60,000 1,30,000 Plant 40,000

Building 75,000

1,70,000 1,70,000

They agreed to admit Rohit as a partner with effect from 1st January, 2020 for th share in profits on the following
1

terms.
i. Rohit will bring to ₹ 47,183 as his capital.
ii. Building is to be appreciated by ₹ 14,000 and plant to be depreciated by ₹ 7,000.

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iii. The provision on debtors is to be raised to ₹ 1,000
iv. The goodwill of the firm has been valued to ₹ 21,000.

16. What will be the net amount of debtors in new balance sheet?

a) ₹ 20,500 b) ₹ 20,200

c) ₹ 19,200 d) ₹ 19,500
17. What is the profit/loss revaluation and by what amount?

a) Loss ₹ 7,000 b) Profit ₹ 7,000

c) Profit ₹ 6,300 d) Loss ₹ 6,300

18. What is the sacrificing ratio of Rahul and Mohit?

a) Can’t be determined b) 4:3

c) 3:4 d) 1:1
19. In general Goodwill adjustment is done in accounts of old partners in ________ ratio.

a) sacrificing ratio b) old profit sharing

c) both old profit sharing and sacrificing ratio d) new profit sharing ratio

Question No. 20 to 23 are based on the given text. Read the text carefully and answer the questions: [4]
Mohit and Monu who share profits and losses in the ratio of 3:2. Their Balance sheet was as follows as on 31-03-2020

Liabilities Amount (₹) Assets Amount (₹)

Creditors 28,000 Cash at Bank 10,000

General Reserve 10,000 Debtors 65,000

Employees Less: Provision for

Provident Fund 22,000 Doubtful debts 5,000 60,000

Capitals: Stock 33,000

Mohit 60,000 Patents 57,000

Monu 40,000 1,00,000

1,60,000 1,60,000

They decided to admit Govind on 1st April, 2020 for th share which Govind acquired wholly from Monu on the
1

following terms:
i. Govind shall bring ₹ 10,000 as his share of premium for Goodwill.
ii. Create provision for doubtful debts @10%.
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.

20. What will be the treatment of Workmen Compensation Reserve at the time of admission of Govind?

a) Credited to Old partners’ capital A/c b) Credited to Revaluation A/c

c) Debited to Partners Capital A/c d) Debited to Revaluation A/c

21. What will be the treatment of provision for doubtful debts in Revaluation A/c?

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 a) ₹ 6500 credited to Revaluation A/c b) ₹ 6500 debited to Revaluation A/c

c) ₹ 1500 debited to Revaluation A/c d) ₹ 1500 credited to Revaluation A/c

22. What is the journal entry for the treatment of goodwill?

a) Premium for Goodwill b) Premium for Goodwill

Dr 10000 Dr 10000
A/c A/c

To Mohit’s Capital A/c 10000 To Mohit’s Capital A/c 6000

To Monu’s Capital A/c 4000

c) Premium for Goodwill d) Premium for Goodwill

Dr 10000 Dr 10000
A/c A/c

To Monu’s Capital A/c 10000 To Mohit’s Capital A/c 5000

To Monu’s Capital A/c 5000

23. What will be the treatment for Employee Provident Fund?

a) Transferred to Revaluation A/c b) Credited to Partners Capital A/c

c) Debited to Partners Capital A/c d) Transferred to Liability side of Balance

Sheet
Section D
24. Read the text carefully and answer the questions: [6]
Ganesh from Punjab and Abhi from Rajasthan started a business in partnership 3 years back. They share profits
in the ratio of 3 : 2. With a view to Expand their business they decided to admit a new partner Aman from Delhi
for th share in future profits which he acquires equally from Ganesh and Abhi. At the time of admission, the
1

Balance Sheet stood as follows:

Liabilities ₹ Assets ₹

Capital A /cs: Land and Building 3,30,000

Ganesh 3,80,000 Machinery 2,00,000

Abhi 2,20,000 6,00,000 Motor Car 1,20,000

Workmen Compensation Reserve 1,80,000 Stock 35,000

Investment Fluctuation Reserve 10,000 Debtors 43,000

Creditors 30,000 Less: Provision for Doubtful debts 2,000 41,000

Current Investment 80,000

Bank 14,000

8,20,000 8,20,000

Aman bring ₹ 4,75,000 as his capital and ₹ 25,000 as his share of goodwill. Following adjustments to be
considered:
i. Land and Building was overvalued by 10%. Motor Car is to be reduced by 15%. Machinery to be appreciated
by 20%.

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 ii. Stock includes an obsolete item of ₹ 3,000 to be written off. Investment revalued at ₹ 90,000 and Creditors ₹
8,000 not likely to be paid.
iii. Bad debts of ₹ 1,000 to be written off. Provision to be created on debtor for 5 %.
iv. There was a claim of ₹ 2,00,000 against the workmen compensation reserve out of which Claim of ₹
1,65,000 was accepted by the firm.
(a) Amount of Land and Building to be shown in Revaluation Account:

a) Debit side of Revaluation Account ₹ b) Credit side of Revaluation Account ₹

30,000 30,000

c) Credit side of Revaluation Account ₹ d) Debit side of Revaluation Account ₹

33,000 33,000
(b) Value of Motor Car and Machinery to be shown in Revaluation Account:
i. Motor Car Dr. side 40,000 and Machinery Cr. Side 18,000
ii. Motor Car Dr. side 18,000 and Machinery Cr. Side 40.000
iii. Motor Car Dr. side 24,000 and Machinery Cr. Side 30,000
iv. Motor Car Dr. side 30,000 and Machinery Cr. Side 24,000

a) Option (ii) b) Option (i)

c) Option (iii) d) Option (iv)

(c) Debtors to be shown in Balance Sheet?

a) 39,900 b) 42,000

c) 43,000 d) 40,000
(d) Investment Fluctuation Reserve to be distributed in:

a) Sacrificing Ratio b) Equally

c) Old Ratio d) New Ratio

(e) Workmen Compensation Reserve ₹ 15,000 to be shown in:

a) Balance Sheet b) All Partners Capital Account

c) Revaluation Account d) Old Partners Capital Account

(f) Gain OR Loss on Revaluation Account:
i. Loss 4,100
ii. Gain 2,900
iii. Gain 68,900
iv. Gain 5,900

a) Option (ii) b) Option (iv)

c) Option (iii) d) Option (i)

Question No. 25 to 30 are based on the given text. Read the text carefully and answer the questions: [6]
Gagan and Megha are partners, sharing profits in the ratio of 2 : 1. To meet the requirement of capital they decided to
admit a new partner Nishant for 1

3
rd share in profit.
At the time of admission, the Balance Sheet stood as follows:

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 Liabilities ₹ Assets ₹

Capitals A/cs: Freehold Proeprty 2,40,000

Gagan 2,10,000 Plant and Machinery 1,60,000

Megha 3,90,000 6,00,000 Building 1,00,000

Investment Fluctuation Reserve 18,000 Furniture 80,000

Creditors 25,000 Debtors 55,000

Bills Payable 42,000 Less: Provision for Doubtful debts 5,000 50,000

Outstanding Salaries 15,000 Current investment 45,000

Cash in hand 25,000

7,00,000 7,00,000

Nishant brings ₹ 2,30,000 as his capital and ₹ 70,000 for premium for goodwill. Following adjustments to be
considered:
i. Freehold property to be appreciated by ₹ 30,000. Plant and Machinery reduced to 1,20,000. Building is appreciated
to 130%. Insurance premium paid during the year included ₹ 2,000 unexpired insurance.
ii. A debtor whose account was written off as bad debts for ₹ 8,400 before two years, now paid 50% amount in cash.
iii. A creditor to whom 9,000 was payable, draw a bill of exchange for 3 months, which was duly accepted.
iv. Megha took investment costing ₹ 12,000 and remaining investment valued at ₹ 38,000.
v. A claim received and accepted by the firm for workmen compensation ₹ 75,000.

25. New Ratio among the partners:

i. 4 : 2 : 3
ii. 2 : 1 : 1
iii. 3 : 2 : 1
iv. 5 : 3 : 2

a) Option (iii) b) Option (iv)

c) Option (i) d) Option (ii)

26. Value of Fixed Assets to be shown in the credit side of Revaluation Account:

a) 1,00,000 b) 1,60,000

c) 60,000 d) 30,000
27. Investment to be shown in Revaluation Account:

a) 38,000 Credit side b) 5,000 Credit side

c) 26,000 Credit side d) 12,000 Debit Side

28. Final value of creditors to be shown in Balance Sheet:

a) 9,000 b) 16,000

c) 25,000 d) 34,000
29. Debtors to be shown in the Balance Sheet:

a) 55,000 - 5,000 + 4,200 = 54,200 b) 55,000 - 8,400 = 46,600

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 c) 55,000 + 4,200 = 59,200 d) 55,000 - 5,000 = 50,000
30. Gain OR Loss on Revaluation Account:

a) 43,800 Loss b) 33,200 Gain

c) 46,800 Loss d) 47,800 Loss

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