HALF YEARLY EXAMINATIONS

SUBJECT: ACCOUNTANCY CLASS: XII

TIME: 3 HOURS MAX. MARKS: 80

Note:
1. Question Nos.1 to 16 and 27 to 30 carries 1 mark each.
2. Questions Nos. 17 to 20, 31and 32 carries 3 marks each.
3. Questions Nos. from 21 ,22 and 33 carries 4 marks each
4. Questions Nos. from 23 to 26 and 34 carries 6 marks each
Q. PART A Marks
N0.
(Accounting for Partnership Firms
and Companies)
1 A& B are partners sharing profits and losses in the ratio of 3:2. C is admitted for ¼ and for 1
which
₹30,000 and ₹10,000 are credited as a premium for goodwill to A and B respectively. The
new profit- sharing ratio of [Link] will be:
a) [Link]
b) [Link]
c) [Link]
d) [Link]
2 Assertion: Batman, a partner in a firm with four partners has advanced a loan of ₹50,000 to 1
the firm for last six months of the financial year without any agreement. He
claims an interest on loan of
₹3,000 despite the firm being in loss for the year.

Reasoning: In the absence of any agreement / provision in the partnership deed, provisions
of Indian Partnership Act, 1932 would apply.

a) Both A and R are correct, and R is the correct explanation of A.

b) Both A and R are correct, but R is not the correct explanation of A.
c) A is correct but R is incorrect.
d) A is incorrect but R is correct.
3 Accounting Standard-26 requires that goodwill is to be recorded in the books of accounts only 1
when money or money’s worth has been paid for it. At the time of admission, Vivaan, a new
partner was unable to bring in his share of goodwill in cash, so according to Accounting
Standard-26 his:
(a) Current A/c will be credited
(b) Current A/c will be debited
(c) Capital A/c will be debited
(d) Capital A/c will be credited
4 A, B and C who were sharing profits and losses in the ratio of [Link] decided to share the future 1
profits and losses in the ratio to [Link] with effect from 1st April 2023. An extract of their
Balance Sheet as at 31st March 2023 is:
Liabilities Amount(₹) Assets Amount(₹)
Workmen Compensation 65,000
Reserve
At the time of reconstitution, a certain amount of Claim on workmen compensation was
determined for which B’s share of loss amounted to₹5,000. The Claim for workmen
compensation would be:

a) ₹15,000
b) ₹70,000
c) ₹50,000
d) ₹80,000

5 Interest on Partner’s loan is credited to: 1

a) Partner’s Fixed capital account.
b) Partner’s Current account.
c) Partner’s Loan Account.
d) Partner’s Drawings Account.
6 A, B and C are in partnership business. A used ₹2,00,000 belonging to the firm without the 1
information to other partners and made a profit of ₹35,000 by using this amount. Which
decision should be taken by the firm to rectify this situation?

a) A need to return only ₹2,00,000 to the firm.

b) A is required to return ₹35,000 to the firm.
c) A is required to pay back ₹35,000 only equally to B and C.
d) A need to return ₹2,35,000 to the firm.
7 Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative from 1
those given below.

Assertion: Michael, Mike and Stephen were partners sharing profits and losses in the ratio [Link].
Stephen being a partner wants that he should be exempted from sharing the losses in the firm.

Reasoning: According to Partnership Act 1932,”It may be agreed between the partners that one or
more of them shall not be liable for losses.”
Alternatives:
(a) Both A and R are correct, and R is the correct explanation of A.
(b) Both A and R are correct, but R is not the correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.

8 G, S and T were partners sharing profits in the ratio [Link]. G retired and his dues towards the 1
firm including Capital balance, Accumulated profits and losses share, Revaluation Gain
amounted to ₹ 5,80,000. G was being paid ₹ 7,00,000 in full settlement. For giving that
additional amount of ₹ 1,20,000, S was debited for ₹ 40,000. Determine goodwill of the firm.
a). ₹
1,20,000 b).
₹80,000 c).
₹2,40,000
d). ₹ 3,60,000

Read the following hypothetical situation, answer question no. 9 and 10.
Richa and Anmol are partners sharing profits in the ratio of 3:2 with capitals of ₹2,50,000 and
₹1,50,000 respectively. Interest on capital is agreed @ 6% p.a. Anmol is to be allowed an
annual salary of 12,500. During the year ended 31st March 2023, the profits of the year prior to
calculation of interest on capital but after charging Anmol’s salary amounted to ₹62,000.A
provision of 5% of this profit is to be made in respect of manager’s commission.
Following is their Profit & Loss Appropriation Account
Particulars (₹) Particulars (₹)
To Interest on Capital By Profit & loss (2) _
Richa --------- account (After
Anmol --------- manager’s
commission)
To Anmol’s Salary a/c 12,500

To Profit transferred to:

Richa’s Capital A/C (1) (1) _

Anmol’s Capital A/c -----------

9 The amount to bereflected in blank (1) will 1
be: a) ₹37,200
b) ₹44,700
c) ₹22,800
d) ₹20,940
10 The amount to be reflected in blank (2) will 1
be: a) ₹62,000.
b) ₹74,500.
c) ₹71,400.
d) ₹70,775.
11 In the absence of an agreement, partners are entitled to: 1
i) Profit share in capital ratio.
ii) Commission for making additional sale.
iii) Interest on Loan & Advances by them to the firm.
iv) Salary for working extra hours.
v) Interest on Capital.
Choose the correct option:
a) Only i), iv) and v).
b) Only ii) and iii).
c) Only iii).
d) Only i) and iii).
12 At the time of retirement, if nothing is mentioned about the payment made due to him, in which 1
account, the amount will be transferred:
(a) Retiring Partner’s Current A/c
(b) Retiring Partner’s Capital A/c
(c) Retiring Partner’s Loan A/c
(d) Retiring Partner’s Bank A/c
13 Annu, Banu and Chanu are partners, Chanu has been given a guarantee of minimum profit of 1
₹8,000 by the firm. Firm suffered a loss of ₹5,000 during the year. Capital account of Banu
will be
by₹ .
a) Credited, ₹6,500.
b) Debited, ₹6,500.
c) Credited, ₹1,500.
Debited, ₹1,500.
14 X and Y are partners in a firm with capital of ₹18,000 and ₹20,000. Z brings ₹10,000 for his 1
share of goodwill and he is required to bring proportionate capital for 1/3rdshare in profits. The
capital contribution of Z will be:
a) ₹24,000.
b) ₹19,000.
c) ₹12,667.
d) ₹14,000.
15 A and B are partners. B draws a fixed amount at the end of every quarter. Interest on drawings 1
is charged @15% p.a. At the end of the year interest on B’s drawings amounted to ₹9,000.
Drawings of B were:
a) ₹24,000 per quarter.
b) ₹40,000 per quarter
c) ₹30,000 per quarter
d) ₹80,000 per quarter

16 On the day of dissolution of the firm ‘Roop Brothers’ had partner’s capital amounting to 1
₹1,50,000 , external liabilities ₹35,000, Cash balance ₹8,000 and P&LA/c(Dr.) ₹7,000. If
Realisation expense and loss on Realisation amounted to₹5,000 and ₹25,000 respectively, the
amount realised by sale of assets is:
a) ₹1,64,000
b) ₹1,45,000
c) ₹1,57,000
d) ₹1,50,000
17 Anshul, Babita and Chander were partners in a firm running a successful business of car 3
accessories. They had agreed to share profits and losses in the ratio of 1/2 : 1/3 : 1/6
respectively. After running business successfully and without any disputes for 10 years,Babita
decided to retire due to old age and the Anshul and Chander decided to share future profits and
losses in the ratio of 3 : 2. The accountant passed the following journal entry for Babita share
of goodwill and missed some information. Fill in the missing figures in the following Journal
entry
Date and Particulars
calculate the gaining ratio. L.F Dr Cr
Anshul’s Capital A/c Dr ----------
Chander’s Capital A/c Dr 21,000
To Babita’s Capital A/c ------------
(Chander’s share of Goodwill
debited to the amounts of continuing
partners in their gaining ratio)

18 P, Q and R were partners with fixed capital of ₹ 40,000, ₹32,000and ₹24,[Link] 3

distributing the profit of ₹48,000 for the year ended 31st March 2022 in their agreed ratio of 3 :
1 : 1it was observed that:
(1) Interest on capital was provided at 10% p.a. instead of 8% p.a.
(2) Salary of ₹ 12,000 was credited to P instead of Q.
You are required to pass a single journal entry in the beginning of the next year to rectify the
above omissions.
OR

19 3
Kate and Vincet were partners in a firm. On 1st April, 2022, the firm had assets of Rs.90,000
including cash of Rs. 8,000. The partners’ capital accounts showed a balance of Rs. 70,000 and
reserves constituted the rest. The normal rate of return is 30% and average profits of the firm are
valued at Rs. 47,000. You are required to find out the value of goodwill of the firm at 4 years
purchase of super profits.
20 3

Cheese and Slice are equal partners. Their capitals as on April 01, 2022 were Rs. 50,000 and
Rs. 1,00,000 respectively. After the accounts for the financialyear ending March 31, 2023 have
been prepared, it is observed that interest on capital @ 6% per annum and salary to Cheese @
₹5,000 per annum, as provided in the partnership deed has notbeen credited to the partners’
capital accounts before distribution of profits.
You are required to give necessary rectifying entries using P&L adjustment account.
21 Carol and Lacy were partners. They decided to dissolve their firm. Pass the journal entries for 4
the following after various assets and external liabilities have been transferred to Realisation
A/c:

[Link] took over half of the investments worth Rs. 30,000 at 2% discount and the remaining
investments were sold at a profit of 18% of the book value.
[Link] is allowed a remuneration of Rs. 13,000 for dissolution work and is to bear all the
expenses of realisation which amounted to Rs. 5,000 were paid by the firm.
3. Carol had given a loan of Rs. 89,000 to the firm which was duly paid.
4. Lacy agreed to pay off her brother’s loan of Rs. 13,000 at a discount of 5%.

22 Sun and Kiran are partners sharing profits and losses equally. They decided to dissolve their 4
firm. Assets and Liabilities have been transferred to Realisation Account. Pass necessary
Journal entries for the following:

a) All partners are agreed that the process of realisation at the time dissolution will be
accomplished by Sun for which he will be paid ₹10,000 along with the amount of
expense which amounted to 2% of total value realised from the Assets on dissolution.
Some assets were sold for Cash at a cumulative Value of ₹12,00,000 and the remaining
were taken over by creditors at a valuation of ₹3,00,000.
b) Deferred Advertisement Expenditure A/c appeared in the books at ₹28,000.
c) Out of the Stock of ₹1,20,000; Kiran (a partner) took over 1/3 of the stock at a discount
of 25% and 50% of remaining stock was took over by a Creditor of ₹30,000 in full
settlement of his claim. Balance amount of stock realized at ₹25,000.
d) An outstanding bill for repairs and renewal of₹3,000 was settled through an
unrecorded asset which was valued at ₹10,000. Balance being settled in Cash.
23 Mark, Musk and Alen were partners in a firm sharing profits in [Link] ratio, On 31.3.2023 Alen 6
retires from the firm. On the date of Alen’s retirement the Balance Sheet of the firm was as
follows:

Balance Sheet of Mark, Musk and Alen

as at 31.3.2023
 On Alen’s retirement it was agreed that:
(a) Premises will be appreciated by 5%.
(b) Furniture will be appreciated by Rs. 2,000.
(c) Stock will be depreciated by 10%.
(d) Provision for bad debts was to be made at 5% on debtors.
(e) Provision legal damages to be made for Rs. 14,400.
(f) Goodwill of the firm is valued at Rs. 48,000.
(g) Rs. 50,000 from Alen’s Capital A/c will be transferred to his Loan A/c and balance will be
paid by cheque.

24 Rajinder and Vijay were partners in a firm sharing profits in the ratio 3:2. On 31st March 6
2023 their
 balance sheet was as follows:
Liabilities Amount Assets Amount(₹)
(₹)
Capital A/cs: Fixed Assets (Tangible) 3,60,000
Rajinder 3,00,000 Goodwill 50,000
Vijay 1,50,000 4,50,000 Investments 40,000
Current A/cs: Stock 74,000
Rajinder 50,000 Debtors 1,00000
Vijay 10,000 60,000 Less: Provision for 96,000
Doubtful Debts
(4,000)
Creditors 75,000 Bank 25,000
General Reserve 60,000

6,45,000 6,45,000

25 Sandeep, Maheep and Amandeep were partners in a firm sharing profits in the ratio of 2: 2: 1. 6
The firm closes its books on 31st March every year. On 30th June, 2020Maheepdied. The
partnership deed provided that on the death of a partner his executors will be entitled to the
following:
a) Balance in his capital account which amounted to ₹1,15,000and interest on capital till
date of death which amounted to ₹5,000.
b) His share in the profits of the firm till the date of his death amounted to ₹20,000.
c) His share in the goodwill of the firm. The goodwill of the firm on Maheep’s death was
valued at
₹ 1,50,000.
d) Loan to Maheep amounted ₹ 20,000.
It was agreed that the amount will be paid to his executor in three equal yearly instalments with
interest @10% p.a. The first instalment was to be paid on 30.06.2021.

Calculate the amount to be transferred to Maheep’s executors Account and prepare the
executor’s account till it is finally settled.
26 6
On 31st March 2023 the Balance sheet of Zoya and Zara who were sharing profits and losses in the
ratio of 3:2 was as follows:

Liabilities Amount(Rs.) Assets Amount(Rs.)

Creditors 29,000 Cashatbank 9,000
Billspayable 6,000 Debtors 20,000
Generalreserves 16,000 Less:Provision 1000 19,000
Capitals Stock 15,000
Zoya 50,000 LandandBuilding 25,000
Zara 35,000 85,000 Plant andMachinery 30,000
Goodwill 10,000
Profit andLossaccount 28,000
1,36,000 1,36,000

They decided to admit Sara for 1/5th share on 1st April, 2022 in the firm on the following terms:
 (a) Goodwill of the firm is valued at Rs 28,000.
(b) Depreciate Plant and Machinery by 10%, appreciate Land and Building by 40%.
(c) The provision for doubtful debts was to be increased by Rs. 800.
(d) A liability of Rs. 1,000 included in the creditors is not likely to arise.
(e) New profit sharing ratio between Zoya, Zara and Sara shall be [Link] respectively.
(f) Sara was to contribute capital equal to 1/5th of the total capital of Zoya and Zara after all
adjustments. You are required to prepare Revaluation Account and Partners’ Capital Accounts.

PART B

27 1
Danish, Zaid and Mihir who were sharing profits and losses equally decided to share the future
profits and losses in the ratio to [Link] with effect from 1st April 2023. An extract of their Balance
Sheet as at 31st March 2023 is:

Liabilities Amount Assets Amount

InvestmentFluctuation 85,0000 Investments(At 8,00,000
Reserve Cost)
At the time of reconstitution, if the market value of Investment was Rs. 7,06,000, the Revaluation
A/c will be:
(a) Debited with 15,000
(b) Debited with 9,000
(c) Credited with 2,000
(d) Credited with 12,000

28 Mike and Ken were two partners sharing profits and losses in the ratio 4:3. Ken was in need of 1
funds so he took a loan of Rs.50, 000 from the firm at an agreed rate of interest being 10% p.a. If
Interest is charged on loan to the partner it will be:
(a) Debited to Profit and Loss A/c
(b) Credited to Profit and Loss A/c
(c) Debited to Profit and Loss Appropriation A/c
(d) Credited to Profit and Loss Appropriation A/c
29. Ayan, Azan and Aqib are partners carrying on furniture business. Ayan withdrew Rs. 5,000 at the end of
each month. Azan withdrew Rs.10,000 at end of each quarter. Aqib withdrew Rs.40,000 at the end of each
month for six months. The partnership deed provides for interest on drawings @ 12% p.a. The interest on
drawing charged from Ayan, Azan and Aqib at the end of the year will be:
(a) Ayan- Rs. 1,800, Azan- Rs.3,300, Aqib- Rs. 6,000
(b) Ayan- Rs. 2,400, Azan- Rs. 1,200, Aqib- Rs. 5,000
(c) Ayan- Rs. 1,400, Azan- Rs. 3,200, Aqib- Rs. 2,000
(d) Ayan- Rs. 3,200, Azan- Rs. 2,300, Aqib- Rs. 8,000

30. David and Garry are partners in a firm with capitals of Rs. 90,000 and Rs. 80,000 respectively. Zenith brings
Rs.70, 000 as his capital for 1/4th share in profits. Zenith’s share of goodwill will be:
(a) Rs. 34,000.
(b) Rs. 29,000.
(c) Rs.10, 000.
(d) Rs.14, 000.

31. A firm earned average profit of ₹ 3, 00,000 during the last few years. The normal rate of return of the
industry is 15%. The assets of the business were ₹ 17, 00,000 and its liabilities were ₹ 2, 00,000. Calculate the
goodwill of the firm by capitalization of average profits.

32. Atul, Virat and Vaibhav were partners with capitals of Rs 2,30,000, Rs 1,20,000and Rs.2,40,000. After
distributing the profit of 5,20,000 for the year ended 31st March 2023 in their agreed ratio of [Link] it was
observed that: Interest on capital was provided at 14% p.a. instead of 10% p.a. You are required to pass
adjustment entry.

33. Ester, Emma and Lucy were partners in a firm sharing profits in the ratio of 2: 2: 1. The firm closes its
books on 31st March every year. On 30th September, 2022 Lucy died. The partnership deed provided that on
the death of a partner her executors will be entitled to the following:
(a)Balance in her capital account which amounted to Rs. 3, 15,000 and interest on capital @9%.
(b)Her share in the profits of the firm till the date of her death amounted to Rs.70, 000.
(c) Her share in the goodwill of the firm. The goodwill of the firm on Lucy’s death was valued at Rs. 1, 50,000.
You are required to calculate the amount to be transferred to Lucy’s Capital A/c.

34. The following is the balance sheet of X, Y and Z as on 31-12-2017.

Liabilities Amount Assets Amount
Creditors 15,000 Cash 6,500
Bills payable 1,800 Debtors 8,600
Reserve fund 6,000 Investment 10,000
Capitals: Stock 13,700
X 22,000 Furniture 5,100
Y 12,000 Buildings 12,900
Z 10,000 Goodwill 10,000
66,800 66,800

It was decided to dissolve the partnership firm on the following terms:-

a. X took over the goodwill at Rs.12000 and furniture at Rs. 4,500.

b. Y took over creditor’s at book value.
c. Z took over bills payable at book value.
d. The other assets realized as under:-
Debtors: 8000
Investments: 8950
Stock: 15600
Buildings: 15750
e. Realization expenses amounted to Rs. 600.

Prepare Realization Account, Partner’s capital Account & Cash Account