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12th Standard Accountancy English Medium - Retirement and Death of a Partner 5 Mark Creative Question Paper and Answer Key 2022 - 2023

Published on: 01/09/2022

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Questions:

Generic 5

15 x 5 = 75

Charles, Muthu and Sekar are partners, sharing profits in the ratio of 3 : 4: 2. Their balance sheet as on 31st December, 2018 is as under:

Liabilities		Rs.	Assets	Rs.
Capital accounts :			Furniture	20,000
Charles	30,000		Stock	40,000
Muthu	40,000		Debtors	30,000
Sekar	20,000	90,000	Cash in hand	33,000
Sundry Creditors		33,000
		1,23,000		1,23,000

On 1.1.2019, Charles retired from the partnership sirm on the following arrangements:
(i) Stock to be depreciated by 10%.
(ii) To provide Rs.1,300 for bad debts.
(iii) The final amount due to Charles was paid immediately.
Prepare revaluation account, partner's capital account and the balance sheet of the firm after retirement.

C, D and E were partners of a firm sharing profit and loss in the ratio of 5 : 3 : 2. As D wanted to retire they decided to revalue their firms assets and liabilities as indicated below:
(a) To bring into books unrecorded investments Rs. 3,000
(b) To write off Rs. 4,000 from Sundry Creditors.
(c) To write down machinery by Rs. 1,000 and Furniture by Rs. 2,000
(d) Good will of the firm by raised in its books at Rs. 15,000
Pass Journal entries and prepare revaluation account.

Ramu, Somu and Gopu were partners of a firm sharing profit and losses in the ratio 5 : 3 : 2. On 1^st January 2005, a Gopu wanted to retire, they decided to revalue their firms assests ad liabilities as indicated below.
(a) Increase the value of premises by Rs. 30,000.
(b) Depreciate stock, furniture and machinery by Rs. 10,000, Rs. 5,000 and Rs. 23,000 respectively.
(c) Provide for an outstanding liabilities of Rs. 2,000
Pass journal entries and revaluation-account in the books of the firm to carryout the above decision of its partners.

Sankar, Sekar and Sarathi were partners of a firm sharing profits and losses in the ratio 3 : 2 : 1. As sarathi wanted to retire, they decided to revalue their firm's assets and liabilities as indicated below:
(a) To increase the valpe of building by Rs. 33,000,
(b) To bring into record at Rs. 6,000 investments which have not o far been brought into account.
(c) To decrease stock by Rs. 3,000 and furniture by Rs. 1,500.
(d) To write off sundry creditors by Rs. 1,500
Pass the necessary journal entries and show the revaluation account.

A, B and C were partners sharing ratio 6 : 2 : 2 Balance sheet as on 30.6.2014.

Liabilities	Rs.	Assets	Rs.
Sundry Creditors	8,000	Cash	3,000
Reserve fund	30,000	Bank	5,000
Capital		Debtors	45,000
A- 70,000		Stock	35,000
B- 50,000		Machinery	30,000
C - 30,000		Building	70,000
	1,88,000		1,88,000

On that date: 'c' retires, from the business. It is agreed to adjust the values of the assets as follows:
a) Provide a reserve of 5% on Sundry debtors.
b) Depreciat Stock by 5% & machinery by 10%.
c) Building to be revalued at Rs. 75,000. Prepare revaluation Capital Account, and Balance sheet.

On 1.1.2019, Pandiyan died and on his death the following arrangements are made:
(i) Stock to be depreciated by 10 %
(ii) Land is to be apprecia!.e4. by Rs.11,000
(iii) To provide 3,000 for bad debts
(iv) The final amount due to Pandiyan was not paid
Prepare revaluation account, partner's capital account and the balance sheet of the firm after death

Shankar, Saleem and Pandian are partners, sharing profits in the ratio of 3:2:1. Their balance sheet as an 31^stDecember 2018 is as under

A, B, and C are partners in affirm sharing profits and losses equally. Their balance sheet as on 31^st 1March 2018 is as follows

Liabilities	Rs	Rs	Assets	Rs	Rs
Capital accounts			Office equipment		70,000
A	80,000		Machinery		1,40,00
B	60,000		Sundry debtors	52,000
C	1,00,000	2,40,000	Less: Provision for doubtful debts	2,000	50,000
Sundry creditors		1,20,000
			Stock		60,000
			Cash at bank		40,000

		3,60,000			3,60,000

'C' Retired on 31st March 2018 Subject to the following conditions
(i) Machinery is valued at Rs.1,30,000
(ii) Value of office equipment is brought down by Rs. 2,000
(iii) Provision for doubtful debts should be increased to Rs.3,000
(iv) Investment of Rs..25,000 not recorded in the books is to be recorded now. Pass necessary journal entries and prepare revaluation account and capital account of partners

Selvam, Saravanan and Santhosh were partners of a firm sharing profits and losses in the ratio of 3: 2 : 1. Set out below was their balance sheet as on 31't December 2018.

Liabilities	Rs.	Rs.	Assets	Rs.
Bills payable		15,000	Cash in hand	3,000
Sundry creditors		25,000	Cash at bank	35,000
Capital Accounts			Bill receivable	11,000
Selvam	80,000		Book debts	18,000
Sarvanan	50,000		Stock	36,000
Santhosh	40,000	1,70,000	Furniture	7,000
Profit and Loss A/c		30,000	Plant & Machinery	50,000
			Buildings	80,000
		2,40,000		2,40,000

Selvam retired from the partnership on 1^st January 2019 on the following terms:
(i) Goodwill of the firm was to be valued at Rs.30,000
(ii) Assets are to be valued as under stock Rs.30,000 plant and machinery Rs.40,000; Buildings Rs.1,00,000
(iii) A provision for doubtful debts be created at Rs.1,000
(iv) Rs.21,500 was to be paid to Selvam immediately and the balance was transferred to his loan account.
Show revaluation account, capital accounts, bank account and the balance sheet of the reconstituted Partnership.

10.

Surya, Ramesh and Rajesh are partners sharing profits is the ratio of 5:3:2. Ramesh decided to retire. Goodwill of the firm is to be valued at Rs.40,000. Give journal entries if
(a) There is no goodwill in the books of the firm,
(b) the goodwill appears at Rs.30,000
(c) the goodwill appears at Rs. 50,000

11.

Thangamuthu, Anaimuthu and Vairamuthu are partners sharing profit and loss in the ratio of 3:3:2.
Thangamuthu wanted to retire on 1st June 2018, the firms books showed a general reserve of Rs.40,000. Pass entry.

12.

Mukil, Mohit and Sonu are partners sharing profit in the ratio 3:2: 1. Mukil retires from the partnership.
In order to settle his claim, the following revaluation of assets and liabilities was agreed upon:
(i) The value of Machinery is increased by Rs. 25,000.
(ii) The value of Investment-is-increased by Rs 2,000.
(ill) A Provision for outstanding bill standing in the books at Rs.1,000 is now not required.
(iv) The value of Land and Building is decreased by Rs.12,000.
Give journal entries and prepare Revaluation account

13.

Priya, Latha, and Kalai are partners sharing profits and losses in the ratio of 3:2:1 respectively. Priya died on 31^stDecember, 2018 Final amount due to her showed a credit balance of Rs.1,20,000. Pass journal entries if
(a) The amount due is paid off immediately,·
(b) The amount due is not paid immediately,
(c) Rs.80,000 is paid and the balance in future.

14.

Kalai, Iothi and Mala are partners sharing profits and losses in the ratio of 113, 113 and 116 respectively.
Mala retires and her share is taken up by Kalai and [othi equally. Find out the new profit sharing ratio and gaining ratio

15.

Karan, Vinoth and Vinay are Partners sharin profits in the ratio of 3:2: 1. Karan retires and the new profit sharing ratio between Vinoth and vinaya is 2:3. Calculate the gaining ratio?

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Answers Key:

Generic 5

15 x 5 = 75

Balance sheet as on 31st March, 2018
Dr Revaluation Accoun Cr

Liabilities		Rs.	Assets	Rs.
To bad debt		1300	By stock	4000
To profit on revaluation transferred to
Charlas,s capital A/c 3/9	900
Muthu's capital A/c 4/9	1200
Sekar's capital A/c 2/9	600	2700
		4000		4000

Dr Capital Account Cr

Particulars	Charles	Muthu	Sekar	Particulars	Charles	Muthu	Sekar
To Bank A/c	30,900	-	-	By balance b/d	30,000	40,000	20,000
To Balance c/d		41,200	20,600	By Revaluation	900	1200	600
				A/c
				(Profit)	30,900	41,200	20,600

Dr Balance sheet as on 1.01.2019 Cr

Liabilities	Rs.	Rs.	Assets·	Rs.	Rs.
Capital fund	63,200		Furniture		20,000
Muthu	41,200		Stock	40,000
Sekar	20,600	61,800	Add: Appreication	4,000	44,000
Sundry creditors		33,000	Debtors	30,000
			less: Provision for bad debt	1300	28,700
			Cash at bank	33,000
			less: paid to Charles	30,900
		94,800			94,800

Journal Entries

Particulars		Debit (Rs.)	Credit(Rs.)
Investment A/c	Dr	3,000
Sundry Creditors A/c	Dr	4,000
To Revaluation A/c			7,000
(Profit items transferred to Revaluation A/c)
Revaluation A/c	Dr	3,000
To Machinery A/c			1,000
To Furniture Al c			2,000
(Loss items transferred to Revaluation A/c)
Revaluation A/c	Dr	4,000
To C's Capital A/c			2,000
To D's Capital A/c			1,200
To E's Capital A/c			800
(Profit on revaluation transferred to Capital accounts
in the oid ratio)

Dr Revaluation account Cr

Particulars	Rs.	Rs.	Particulars	Rs.
To Machinery		1,000	By lnvestments	3,000
To Furniture		2,000	By Sundry Creditors	4,000
To Profit transferred to
Capital accounts
C	2,000
D	1,200
E	800	4,000
		7,000		7,000

Journal entries

Date	Particulars		Debit (Rs.)	Credit (Rs.)
1.1.2005	Premises A/c	Dr	30,000
	To Revaluation A/c			30,000
	(Profit item transferred to revaluation A/c)
1.1.2005	Revaluation A/c	Dr	40,000
	To Stock			10,000
	To Furniture A/c			5,000
	To Machinery A/c			23,000
	To Outstanding liabilities A/c
	Loss items transferred to revaluation A/c
1.1.2005	Ramu's Capital A/c	Dr	5,000
	Somu's Capital A/c	Dr	3,000
	Gopu's Capital A/c		2,000	10,000
	To Revaluation A/c
	(Loss on revaluation transferred to
	old partners capital accounts in the old ratio)

Dr Revaluation account Cr

Particulars	Rs.	Particulars	Rs.	Rs.
To Stock	10,000	By Premises		30,000
To Furniture	5,000	By loss transfer capital account
To Outstanding	2,000	Ramu	5,000
		Somu	3,000
		Gopu	2,000
				10,000
	40,000			40;000

Revaluation Loss Rs. 10,000 ;

Particulars		Debit Rs.	Credit Rs.
Buildings A/c	Dr	33,000
Investments A/c	Dr	6,000
Sundry Creditors A/c	Dr	1,500
To Revaluation A/c			40,500
(Profit items transferred to
revaluation A/c)
Revaluation A/c	Dr	4,500
To Stock A/c			3,000
To Furniture A/c			1,500
(Loss items transferred to revaluation A/c)
Revaluation A/c		36,000
To Sankar's Capital A/c			18,000
To Sekar's Capital A/c			12,000
To Sarathi's Capital A/c			6,000
(Profit on revaluation account
transferred to old partners
capital accounts in the old ratio

Dr Revaluation A/c Cr

Particulars	Rs.	Rs.	Particulars	Rs.
To Stock		3,000	By Buildings	33,000
To Furniture		1,500	By Investments	6,000
Transferred to Capital			By Sundry	1,500
accounts:
Sankar	18,000
Sekar	12,000
Sarathi	6,000	36,000
		40,500		40,500

Revaluation profit Rs. 36,000

Dr Revaluation Account Cr

Particulars	Rs.	Particular	Rs.	Rs.
To Provision debtors	2,250	By Building		5,000
To Stock	1,750	By Loss transferred
To Machinery	3,000	A's Capital	1,200
		B's Capital	400
		C's Capital	400	2,000
	7,000			7,000

Capital Account

Particulars	A	B	C	Particulars	A	B	C
To				By Balance
Revaluation				b/d	70,000	50,000	30,000
A/c	1,200	400	400	By Reserve
To Loan A/c			35,600	fund	18,000	6,000	6,000
To Balance
c/d	86,800	55,600	-
	88,000	56,000	36,000		88,000	56,000	36,000

Balance Sheet as on 1.7.2014

Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Sundry creditors		8,000	Cash		3,000
C's loan A/c		35,600	Bank		5,000
Capital A/c			Debtors	45,000
A	86,800		( -) Proyisions	2,250	42,750
B	55,600	142,400	Stock		33,250
			Machinery		27,000
			Building		75,000.
		1,86,000			1,86,000

Revaluation loss Rs. 2,000; Capital A/c A Rs. 86,800
B Rs. 55,600; C's loan A/c Rs. 35,600; Balance sheet total Rs. 1,86,000.

Dr Revaluation Account Cr
Particulars	Rs	Rs	Particulars	Rs
To Stock A/c		2,000	ByLand A/c	11,000
To Debtors A/c		3,000
To Profit on revaluation transferred to
Sankar's capital Ale (6,000 x 3/6)	3,000
Saleem's capital Ale (6,000 X 2/6)	2,000
Pandian's capital Ale (6,000 X 1/6)	1,000	6,000
		11,000		11,000

Capital Account
Particulars	Sankar Rs	Saleem Rs	Pandiyan Rs	Particulars	Sankar Rs	Saleem Rs	Pandiyan Rs
To profit and loss				By Balance b/d	50,000	40,000	10,000
A/c	3,000	2,000	1,000	By General reserve	18,000	12,000	6,000
				reserve	18,000	12,000	6,000
To Pandian's
Executor's A/c			16,000	By Revaluation
To Balance c/d	68,000	52,000		A/c (profit)	3,000	2,000	1,000

	71,000	54,000	17,000		71,000	54,000	17,000
				By Balance b/d	68,000	52,000

Balance sheet as on 31st December 2018
Liabilitie	Rs	Rs	Assets	Rs	Rs
Capital account			Land	80,000
Sankar	68,000		Add: Appreciation	11,000	91,000
Saleem	52,000	1,20,000
Pandians Executor's A/c		16,000	Stock	20,000
		14,000	Less: Depreciation	2,000	18,000
			Debtors	30,000
			Less: Bad debts	3,000	27,000
		1,50,000	Cash at bank		14,000
					1,50,000

Balance sheet as on 31'1 December 2018
Liabilities	Rs	Rs	Assets	Rs
Capital accounts:			Land	80,000
Sankar	50,000		Stock	20,500
Saleem	40,000		Debtors	30,000
Pandiyan	10,000	1,00,000	Cash at bank	14,000
General reserve		36,000	Profit and loss Ale (loss)	6,000
Sundry creditors		14,000
	1,50,000			1,50,000

Journal entries
Date	Particulars		Depit Rs	Credit Rs
2018 Dec.31	Revaluation A/c	Dr	13,000
	To Machinery A/c			10,000
	To Office equipment A/c			2,000
	To Provision for doubtful debts A/c			1,000
	(Depreciation on machinery and furniture and
	provision made for doubtful debts adjusted)
2018 Dec.31	Investments A/c	Dr	25,000
	To Revaluation A/c			25,000
	(unrecorded investment brought into accounts)
2018 Dec.31	Revaluation A/c	Dr	12,000
	To A's capital A/c			4,000
	To B's capital A/c			4,000
	To C's cpital A/c			4,000
	(profit on revaluation transferred to capital accounts)

Dr Revaluation Account Cr
Particulars	Rs	Rs	Particulars	Rs
To Machinery A/c		10,000	By Investments A/c	25,000
To office equipment /c		2,000
provision for doubtful debts		1,000
To profit on revaluation transferred to
A's capital A/c (12,000 X1/3)	4,000
B's capital A/c (12,000 X1/3)	4,000
C's capital A/c (12,000 X1/3)	4,000	12,000
		25,000		25,000

Dr Capital Account Cr
Particulars	A Rs	B Rs	C Rs	Particulars	A Rs	B Rs	C Rs
To Balance c/d	84,000	64,000		By Balance b/d	80,000	60,000	1,00,000
To C's loan Ale			1,04,000	By Revaluation A/c	4,000	4,000	4,000

	84,000	64,000	1,04,000		84,000	64,000	1,04,000
				By Balanced b/d	84,000	64,000

Dr Revaluation Account Cr
Particulars	Rs	Rs	Particulars	Rs
To Stock A/c		6,000	By Buildings A/c	20,000
Plant and Machinery A/c		10,000
To Provision for doubtful debts A/c		1,000
To Profit on revaluation A/c
Selvam	1,500
Saravanan	1,000
1,000	500	3,000

		20,000		20,000

Dr Capital Account Cr
Particulars	Selvam Rs	Saravanan Rs	Santhosh	Particulars	Selvam Rs	Saravanan Rs	Santhosh Rs
To Bank A/c	21,500	-	-	By Balanced b/d	80,000	50,000	40,000
To Selvam's				By Revaluation
loan A/c	90,000	-	-	A/c	1,500	1,000	500
				By profit and
To Balance C/d	-	71,000	50,500	loss A/c	15,000	10,000	5,000
				By Goodwill	15,000	10,000	5,000

	1,11,500	71,000	50,500		1,11,500	71,000	50,500
				By Balance b/d		71,000	50,500

Dr Bank Account Cr
Particulars	Rs	Particulars	Rs
To Balance b/d	35,000	By Selvam A/c	21,500
		By Balance c/d	13,500
	35,000		35,000

Balance sheet as on 1.1.2018
Liabilities	Rs	Rs	Assets	Rs	Rs
Bills payable		15,000	Cash in hand		3,000
Sundry creditors		25,000	Cash at bank		13,500
Selvam's loan A/c		90,000	Bills receivable		11,000
Capital Accounts			Book debts	18,000
Saravanan	71,000		Less: provision for bad debts	1,000	17,000
Santhosh	50,500	1,21,500
			Stock	36,000
			Less:Decreased	6,000	30,000
			Furniture		7,000
			Plant and Machinery	50,000
			Less : depreciation	10,000	40,000

			Building	80,000
			Add: Appreciation	20,000	1,00,000
			Good will		30,000
		2,51,500			51,500

10.

Journal entries
Particulars		Debit Rs.	Credit Rs.
(a) Goodwill A/c	Dr	40,000
To Surya's capital A/c (40,000 x 5/10)			20,000
To Ramesh's capital A/c (40,000 x 3/10)			12,000
To Rajesh's capital A/c (40,000 x 2/10)			8,000
(Goodwill raised and transferred to old partners in the old ratio)
(b) Goodwill A/c	Dr	10,000
To Surya's capital A/c (10,000 x 5/10)			5,000
To Ramesh's capital A/c (10,000 x 3/10)			3,000
To Rajesh's capital A/c (10,000 x 2/10)			2,000
(Increase in goodwill transferred)
(c) Surya's capacital A/c (10,000 x 5/10)	Dr	5,000
Ramesh's capital A/c (10,000 x 3/10)	Dr
Rajeshs capital A/c (10,000 x 2/10)	Dr	3,000
To Goodwill A/c		2,000
(Decrease in goodwill transferred to the old partners in the old ratio)			10,000

11.

Journal entries
Date	Particulars	Debit Rs	Credit Rs
2018	General reserve A/c	40,000
June 1	To Thangamuthu's capital A/c (40,000 x 3/8)		15,000
	To Anaimuthu's capital A/c (40,000 x 3/8)		15,000
	To Vairamuthu's capital A/c (40,000 x 2/8)		10,000
	(General reserve transferred Partner's capital account

12.

Journal entries
Particulars		Depit Rs	Credit Rs
Machinery A/c	Dr	25,000
Investments A/c	Dr	2,000
Provision for outstanding bill A/c	Dr	1,000
To Revaluation A/c			28,000
(Increase in value of Assets i.e., Machinery and investment and reduction in provision)
Revaluation A/c	Dr	12,000
To Land and Building A/c			12,000
(Decrease in value of assets)
Revaluation A/c	Dr	16,000
To Mukil's capital A/c			8,000
To Mohit's capital A/c			5,333
To Sonus capital A/c			2,667
(Profit on revaluation credited to all partners capital Ale in old profit sharing ratio)

Dr Revaluation Account Cr
Particulars	Rs	Particulars	Rs
Land and Building	12,000	Machinery	25,000
Profit transferred to		Investments	2,000
Mukil's capital 8,000
Mohit's capital 5,333
Sonu's capital 2,667	16,000
	28,000		28,000

13.

Journal entries
Particulars		Debit Rs	Credit Rs
a)Priya's Executors A/c	Dr	1,20,000
To BankA/c			1,20,000
(b)Priya's Executors A/c	Dr	1,20,000
To Priya Executor's loan A/c			1,20,000
(Amount due transferred to loan account
(c) Priyas Executors A/c	Dr	1,20,000
To BankA/c			80,000
To Priya's Executors loan A/c			40,000
Rs.80,000 paid and the balance transferred to loan account

14.

Gaining ratio is 1 : 1 Mala's share is taken up by Kalai and Iothi equally.
Mala's share = \(\cfrac { 1 }{ 6 } \)
Share gained = Retiring partner's share x Proportion of share gained
Kalai = \(\cfrac { 1 }{ 6 } \times \cfrac { 1 }{ 3 } =\cfrac { 1 }{ 18 } \)
Jothi = \(\cfrac { 1 }{ 6 } \times \cfrac { 1 }{ 3 } =\cfrac { 1 }{ 18 } \)
New share of continuing partner = Old share + Share gained
Kalal= \(\cfrac { 1 }{ 3 } +\cfrac { 1 }{ 18 } =\cfrac { 6+1 }{ 18 } =\cfrac { 7 }{ 18 } \)
Jothi = \(\cfrac { 1 }{ 3 } +\cfrac { 1 }{ 18 } =\cfrac { 6+1 }{ 18 } =\cfrac { 7 }{ 18 } \)
Therefore, new ratio of Kalai and Jothi is
\(\cfrac { 7 }{ 18 } :\cfrac { 7 }{ 18 } \) that is 7:7

15.

Share gained = New share - Old share
Vinoth = \(\cfrac { 2 }{ 5 } -\cfrac { 2 }{ 6 } =\cfrac { 12-10 }{ 30 } =\cfrac { 2 }{ 10 } \)
Vinay = \(\cfrac { 3 }{ 5 } =\cfrac { 1 }{ 6 } =\cfrac { 18-5 }{ 30 } =\cfrac { 13 }{ 30 } \)
Therefore, the gaining ratio of Vinoth and Vinay is 2: 13.