Class : XII CHANGE IN PROFIT SHARING RATIO Reference:

T.S.Grewal
Date of issue REVISION WORKSHEET Date of submission
25.07.2023 ACCOUNTANCY (055) 31.07.2023

Multiple Choice Questions

1 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) Realization of partnership
(d) None of the above
2 The ratio in which a partner surrenders his share in favor of a partner is known as :
(a) New profit sharing ratio
(b) Sacrificing ratio
( c) Gaining ratio
(d) Capital ratio
3 The ratio in which a partner receives a rise in his share of profit is known as:
(a) New ratio
(b) Sacrificing ratio
( c) Capital ratio
(d) Gaining ratio
4 Reserves and accumulated profits are transferred to partner’s capital accounts at the
time of reconstitution in:
(a) Old profit sharing ratio
(b) Sacrificing ratio
( c) Gaining ratio
(d) New profit sharing ratio
5 Increase and decrease in the value of assets and liabilities are recorded through:
(a) Partner’s capital account
(b) Revaluation account
(c) Profit and loss Appropriation a/c
(d) Balance sheet
6 Sacrificing ratio is the difference between:
(a) New ratio and old ratio
(b) Old ratio and new ratio
( c) New ratio and gaining ratio
(d) Old ratio and gaining ratio
7 A and B are partners in a firm sharing profits in the ratio of 3:2. They decided to share
future profits equally. Calculate A’s gain or sacrifice.
(a) 2⁄10 (sacrifice) (𝑏) 5⁄10 (gain)
( c) 1⁄10 (gain) (d) 1⁄10 (sacrifice)

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 8 A change in profit sharing ratio among the existing partner result in of the
partnership firm.

9 X, Y and Z are partners sharing profits in the ratio of 5:3:2. Then they decided to share
profit equally in future. In this case X’s sacrifice is .

10 Decrease in the value of liabilities on reconstitution of the partnership firm result into
.

11 X, Y and Z are partners sharing profits and losses in the ratio 2:2:1. From 1st April,
2018 they decide to share profits & losses equally. Calculate the sacrificing ratio.

12 A, B and C are partners sharing profits equally. They decided that in future C will get
1/5th share in profits and remaining profit will be shared by A and B equally. On the
day of change, firm’s goodwill is valued at ₹ 60,000. Give journal entries arising on
account of change in profit sharing ratio.

13 A, B and C are partners sharing profits in the ratio of 2:2:1. On 1.4.2018 they decided
to share the profits in the ratio of 2:1:1. On that date following balances were
appearing in the Balance Sheet:
Profit & Loss (Cr.) ₹15,000
General Reserve ₹30,000
Deferred Revenue Expenditure ₹20,000
Pass necessary journal entries.

14 A, B and C were partners sharing profits and losses in the ratio of 3:2:1. On 1.1.2019,
they decided that in future they will share profits in the ratio of 2:2:3. Calculate
sacrificing ratio and gaining ratio.

15 P, Q and R were partners sharing profits and losses in the ratio of 1:2:2. On 1st April,
2019 it was decided that P will get ¼ of the total profit and remaining share will be
taken by Q and R equally. Calculate sacrificing and gaining ratios.

16 X, Y and Z were partners sharing profits and losses in the ratio of 4:3:2. Goodwill does
not appear in the books but it is worth ₹ 36,000. The partners decided to share future
profits in equal proportions. Give a journal entry to record the above change. Also
indicate the individual partners’ gain or loss due to change in ratio. Show your
workings clearly.

17 A, B and C are partners in a firm sharing profits and losses in the ratio of 3:2:1. In
future they decided to share profits in the ratio of 6:5:2. For this purpose, the goodwill
of the firm was valued at ₹ 78,000. Pass necessary journal entry for the treatment of
goodwill due to change in profit sharing ratio. Also show your workings clearly.

18 A, B and C are partners sharing profits and losses in the ratio 5:4:1. On 1 st January
2015, they decided to share profits and losses equally in future profits. The goodwill
of the firm is valued at ₹ 90,000. Give necessary journal entry.

19 Chandra and Anita were partners in a firm sharing profits in the ratio 2:1. They decide
that with effect from January, 2016 they would share profits in the ratio of 3:2. But, this
decision was taken after the profits of the year 2016 amounting to ₹ 30,000 has been
distributed in the old ratio.
Goodwill was to be valued at the aggregate of two years’ profits preceding the date
decision became effective. The profits for 2014 and 2015 were ₹ 20,000 and ₹ 25,000
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 respectively. It was decided that no goodwill would be raised and the necessary
adjustments be made through capital accounts which on March 31 st 2016 stood at ₹
50,000 for Chandra and ₹ 30,000 for Anita.
Record the necessary journal entries.

20 P, Q and R sharing profits and losses in the ratio of 5:3:2 decided to share profits and
losses equally with effect from 1st April, 2018. Goodwill of the firm is valued at ₹
90,000. Pass journal entries under each of the following cases :
Case 1When goodwill does not appear in the books.
Case 2 When goodwill appears in the books at ₹ 60,000.

21 Rita and Nita are partners sharing profits and losses in the ratio of 4:1. They decided
to share profits in the ratio 3:2 w.e.f 1st April, 2017. However, the decision to change
the profit sharing ratio was taken after crediting share of profit for the year ended 31st
March, 2018 to respective Capital Accounts, which was ₹. 1,00,000.
Goodwill of the firm as at 1st April, 2017 was valued at ₹ 75,000. Capital Accounts
credit balances as at 31st March, 2018 were Rita ₹ 5,00,000 and Nita ₹ 6,00,000.
Pass necessary journal entries and prepare Capital Accounts.

22 A, B and C are partners sharing profits equally. On 1.1.2015 they decided to share
their future profits in the ratio of 1:2:2. On the same date the firm has a balance of ₹
30,000 as General Reserve and ₹ 18,000 in Profit and Loss A/c (Dr.). Journalise.

23 A, B and C are partners sharing profits and losses in the ratio 2:3:4. They decided to
share future profits and losses in the ratio of 4:3:2. They also decided to record the
effect of the following without affecting their book values:
General Reserve ₹ 40,000
Profit & Loss A/c ₹ 20,000
Advertisement Suspense A/c ₹ 15,000
You are required to give the necessary single journal entry.

24 A, B and C are partners in a firm sharing Profits in the ratio of 3:3:2. They decided to
share profits equally w.e.f 1st April, 2018. On that date, Profit & Loss A/c showed credit
balance of ₹ 72,000. Instead of closing the Profit & Loss A/c, it was decided to record
an adjustment entry reflecting the change in the profit sharing ratio. Pass journal
entry to give effect to the same.

25 P, Q and R are sharing profits and losses in the ratio of 5:3:2. They decided to share
profits and losses in the ratio of 2:3:5 with effect from 1st April, 2018. The Goodwill of
the firm was valued at ₹ 1,50,000. They also decide to record the effect of the following
without affecting their book values, by passing an adjustment entry.

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