12th Class Accountancy Change in Profit Sharing Ratio Among Existing Partner Question Bank

done Case Based - Reconstitution Of a Partnership Firm : Change in Profit Sharing Ratio Total Questions - 12

• question_answer1)

  Read the following hypothetical text and answer the given questions:

  Raj, Taj and Naz are partners engaged in the business of selling frozen food items sharing profits and losses equally.

  As there was need of funds to purchase more refrigerators, Raj bought additional capital of? 1,50,000 in the firm. Raj demanded that his share in profit should be increased as he bought additional capital to which rest of the partners agreed From 1st April, 2019, they decided to share profits in the ratio of 2 : 1 : 1, At the time of reconstitution, the following assets and liabilities are revalued and reassessed:

  Items Book Figure Revised Figure Freehold Premises 7,50,000 8,00,000 Stock 2,25,000 2,00,000 Debtors 75,000 72,500 Furniture 1,00,000 90,000 Creditors 30,000 25,000 Based on the above information you are required to answer the following questions:

  Gaining/Sacrificing share of Raj, Taj and Naz will be:

   
  A)
  Raj sacrifice =\[\frac{1}{12}\], Taj sacrifice =\[\frac{1}{12}\]. Naz gain =\[\frac{1}{6}\] done clear
  B)
  Raj gain =\[\frac{1}{6}\], Taj sacrifice =\[\frac{1}{12}\], Naz sacrifice =\[\frac{1}{12}\] done clear
  C)
  Raj gain =\[\frac{1}{12}\], Taj gain =\[\frac{1}{12}\], Naz sacrifice =\[\frac{1}{6}\] done clear
  D)
  Raj sacrifice = \[\frac{1}{6}\] , Taj gain = \[\frac{1}{12}\], Naz gain = \[\frac{1}{12}\] done clear
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• question_answer2)

  Read the following hypothetical text and answer the given questions:

  Raj, Taj and Naz are partners engaged in the business of selling frozen food items sharing profits and losses equally.

  As there was need of funds to purchase more refrigerators, Raj bought additional capital of? 1,50,000 in the firm. Raj demanded that his share in profit should be increased as he bought additional capital to which rest of the partners agreed From 1st April, 2019, they decided to share profits in the ratio of 2 : 1 : 1, At the time of reconstitution, the following assets and liabilities are revalued and reassessed:

  Items Book Figure Revised Figure Freehold Premises 7,50,000 8,00,000 Stock 2,25,000 2,00,000 Debtors 75,000 72,500 Furniture 1,00,000 90,000 Creditors 30,000 25,000 Based on the above information you are required to answer the following questions:

  Profit on revaluation will be:

   
  A)
  Rs. 7,500              done clear
  B)
  Rs. 92,500 done clear
  C)
  Rs. 17,500            done clear
  D)
  Rs. 18,500 done clear
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• question_answer3)

  Read the following hypothetical text and answer the given questions:

  Raj, Taj and Naz are partners engaged in the business of selling frozen food items sharing profits and losses equally.

  As there was need of funds to purchase more refrigerators, Raj bought additional capital of? 1,50,000 in the firm. Raj demanded that his share in profit should be increased as he bought additional capital to which rest of the partners agreed From 1st April, 2019, they decided to share profits in the ratio of 2 : 1 : 1, At the time of reconstitution, the following assets and liabilities are revalued and reassessed:

  Items Book Figure Revised Figure Freehold Premises 7,50,000 8,00,000 Stock 2,25,000 2,00,000 Debtors 75,000 72,500 Furniture 1,00,000 90,000 Creditors 30,000 25,000 Based on the above information you are required to answer the following questions:

  Proportionate amount gained by Raj will be:

   
  A)
  Rs. 2,916               done clear
  B)
  Rs.1,458 done clear
  C)
  Rs. 4,374              done clear
  D)
  None of these done clear
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• question_answer4)

  Read the following hypothetical text and answer the given questions:

  Raj, Taj and Naz are partners engaged in the business of selling frozen food items sharing profits and losses equally.

  As there was need of funds to purchase more refrigerators, Raj bought additional capital of? 1,50,000 in the firm. Raj demanded that his share in profit should be increased as he bought additional capital to which rest of the partners agreed From 1st April, 2019, they decided to share profits in the ratio of 2 : 1 : 1, At the time of reconstitution, the following assets and liabilities are revalued and reassessed:

  Items Book Figure Revised Figure Freehold Premises 7,50,000 8,00,000 Stock 2,25,000 2,00,000 Debtors 75,000 72,500 Furniture 1,00,000 90,000 Creditors 30,000 25,000 Based on the above information you are required to answer the following questions:

  Entry for profit on revalution will be:

  A)

  Megha's Capital/Current A/c   Dr.             2,200

  Richa's Capital/Current A/c          Dr.        2,200

  To Samiksha's Capital/Current A/c           3,000

  done clear
  B)

  Richa's Capital/Current A/c    Dr.      2,916

  To Megha's Capital/Current A/c                            1,458

  To Samiksha's Capital/Current A/c                        1,458

    done clear
  C)

  Samiksha's Capital/Current A/c  Dr.   2,800

  To Richa's Capital/Current A/c                              1,400

  To Megha's Capital/Current A/c                            1,400

    done clear
  D)

  Richa's Capital/Current A/c       Dr.   1,450

  Samiksha's Capital/Current A/c      Dr.   1.450

  To Megha's Capital/Current A/c                            2,900

  done clear
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• question_answer5)

  Read the following hypothetical text and answer the given questions:

  Kia, Gia and Sia were partners in a firm sharing profits and losses equally. The firm was engaged in the storage and distribution of canned juice and its godowns were located at three different places in the city. Each godown was being managed individually by Kia, Gia and Sia. Because of increase in business activities at the godown managed by Gia, she had to devote more time. Gia demanded that his share in the profits of the firm be increased, to which Kia and Sia agreed The new profit sharing ratio was agreed to be 1:2:1.

  For this purpose, the goodwill of the firm was valued at two years' purchase of the average profits of last five years.

  The profits of the last five years were as follows:

  Year                                          Profit (Rs.)

  I                                               4,00,000

  II                                              4,80,000

  III                                             7,33,000

  IV (Loss)                                       33,000

  V                                              2,20,000

  Based on the above information you are required to answer the following questions:

  Average profit of the firm will be:

   
  A)
  Rs. 18,00,000        done clear
  B)
  Rs. 7,20,000 done clear
  C)
  Rs. 3,60,000          done clear
  D)
  Rs. 9,33,000 done clear
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• question_answer6)

  Read the following hypothetical text and answer the given questions:

  Kia, Gia and Sia were partners in a firm sharing profits and losses equally. The firm was engaged in the storage and distribution of canned juice and its godowns were located at three different places in the city. Each godown was being managed individually by Kia, Gia and Sia. Because of increase in business activities at the godown managed by Gia, she had to devote more time. Gia demanded that his share in the profits of the firm be increased, to which Kia and Sia agreed The new profit sharing ratio was agreed to be 1:2:1.

  For this purpose, the goodwill of the firm was valued at two years' purchase of the average profits of last five years.

  The profits of the last five years were as follows:

  Year                                          Profit (Rs.)

  I                                               4,00,000

  II                                              4,80,000

  III                                             7,33,000

  IV (Loss)                                       33,000

  V                                              2,20,000

  Based on the above information you are required to answer the following questions:

  Goodwill of the firm:

   
  A)
  Rs. 3,60,000         done clear
  B)
  Rs. 7,20,000 done clear
  C)
  Rs. 1,80,000          done clear
  D)
  Rs. 7,00,000 done clear
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• question_answer7)

  Read the following hypothetical text and answer the given questions:

  Kia, Gia and Sia were partners in a firm sharing profits and losses equally. The firm was engaged in the storage and distribution of canned juice and its godowns were located at three different places in the city. Each godown was being managed individually by Kia, Gia and Sia. Because of increase in business activities at the godown managed by Gia, she had to devote more time. Gia demanded that his share in the profits of the firm be increased, to which Kia and Sia agreed The new profit sharing ratio was agreed to be 1:2:1.

  For this purpose, the goodwill of the firm was valued at two years' purchase of the average profits of last five years.

  The profits of the last five years were as follows:

  Year                                          Profit (Rs.)

  I                                               4,00,000

  II                                              4,80,000

  III                                             7,33,000

  IV (Loss)                                       33,000

  V                                              2,20,000

  Based on the above information you are required to answer the following questions:

  Sacrifice/Gain of Kia,Gia and Sia will be:

  A)
  Kia and Sia sacrifice = \[\frac{1}{12}\]   Gia gains = \[\frac{2}{12}\] done clear
  B)
  Kia and Sia gains = \[\frac{1}{12}\], Gia sacrifice = \[\frac{2}{12}\] done clear
  C)
  Kia sacrifice =\[\frac{2}{12}\], Sia gains =\[\frac{1}{12}\], Gia gains =\[\frac{1}{12}\] done clear
  D)
  Kia gains =\[\frac{2}{12}\], Sia sacrifice =\[\frac{1}{12}\], Gia sacrifice =\[\frac{1}{12}\] done clear
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• question_answer8)

  Read the following hypothetical text and answer the given questions:

  Kia, Gia and Sia were partners in a firm sharing profits and losses equally. The firm was engaged in the storage and distribution of canned juice and its godowns were located at three different places in the city. Each godown was being managed individually by Kia, Gia and Sia. Because of increase in business activities at the godown managed by Gia, she had to devote more time. Gia demanded that his share in the profits of the firm be increased, to which Kia and Sia agreed The new profit sharing ratio was agreed to be 1:2:1.

  For this purpose, the goodwill of the firm was valued at two years' purchase of the average profits of last five years.

  The profits of the last five years were as follows:

  Year                                          Profit (Rs.)

  I                                               4,00,000

  II                                              4,80,000

  III                                             7,33,000

  IV (Loss)                                       33,000

  V                                              2,20,000

  Based on the above information you are required to answer the following questions:

  What will be the journal entry for treatment of goodwill on change in profit sharing?

   
  A)

  Kia's Capital A/c            Dr.     1,00,000

  To Gia's Capital A/c                                  50,000

  To Sia's Capital A/c                                  50,000

    done clear
  B)

  Sia's Capital A/c            Dr.        60,000

  Kia's Capital A/c             Dr.        40,000

  To Gia's Capital A/c                    1,00,000

  done clear
  C)

  Gia's Capital A/c            Dr.      1,20,000

  To Kia's Capital A/c                   60,000

  To Sia's Capital A/c                  60,00

  done clear
  D)

  Gia's Capital A/c             Dr.    60,000

  Sia's Capital A/c              Dr.    60,000

  To Kia's Capital A/c                             1,20,000

  done clear
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• question_answer9)

  Read the following hypothetical text and answer the given questions:

  Bhavya and Naman were partners in a firm carrying on a tiffin service in Hyderabad Bhavya noticed that a lot of food is left at the end of the day. To avoid wastage, she suggested that it can be distributed to the needy; Naman wanted that it should be mixed with the food being served the next day. Naman then give a proposal that if his share in the profit increased, he will not mind free distribution of left over food Bhavya happily agreed So, they decided to change their profit sharing ratio 1:2 with immediate effect. On that date revaluation of assets and reassessment of liabilities was carried out that resulted into a gain of Rs. 18,000. On that date the goodwill of the firm was valued at Rs. 1,20,000.

  Based on the above information you are required to answer the following questions:

  Sacrificing share equals to:

  A)
  Old Share - New Share     done clear
  B)
  New Share - Old Share done clear
  C)
  Old Share + New Share     done clear
  D)
  Old Share done clear
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• question_answer10)

  Read the following hypothetical text and answer the given questions:

  Bhavya and Naman were partners in a firm carrying on a tiffin service in Hyderabad Bhavya noticed that a lot of food is left at the end of the day. To avoid wastage, she suggested that it can be distributed to the needy; Naman wanted that it should be mixed with the food being served the next day. Naman then give a proposal that if his share in the profit increased, he will not mind free distribution of left-over food Bhavya happily agreed So, they decided to change their profit sharing ratio 1:2 with immediate effect. On that date revaluation of assets and reassessment of liabilities was carried out that resulted into a gain of Rs. 18,000. On that date the goodwill of the firm was valued at Rs. 1,20,000.

  Based on the above information you are required to answer the following questions:

  Sacrifice/Gain of Bhavya and Naman will be:

   
  A)
  Bhavya sacrifice 1/6, Naman gains 1/6 done clear
  B)
  Bhavya gains 1/6, Naman sacrifice 1/6 done clear
  C)
  Only Bhavya gains 1/6 done clear
  D)
  Only Naman sacrifice 1/6 done clear
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• question_answer11)

  Read the following hypothetical text and answer the given questions:

  Bhavya and Naman were partners in a firm carrying on a tiffin service in Hyderabad Bhavya noticed that a lot of food is left at the end of the day. To avoid wastage, she suggested that it can be distributed to the needy; Naman wanted that it should be mixed with the food being served the next day. Naman then give a proposal that if his share in the profit increased, he will not mind free distribution of left over food Bhavya happily agreed So, they decided to change their profit sharing ratio 1:2 with immediate effect. On that date revaluation of assets and reassessment of liabilities was carried out that resulted into a gain of Rs. 18,000. On that date the goodwill of the firm was valued at Rs. 1,20,000.

  Based on the above information you are required to answer the following questions:

  At the time of change in profit sharing ratio, gaining partner capital account is ............ and sacrificing partner is ............ for adjustment of goodwill.

  A)
  credited, debited done clear
  B)
  debited, credited done clear
  C)
  increased, decreased done clear
  D)
  decreased, increased done clear
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• question_answer12)

  Read the following hypothetical text and answer the given questions:

  Bhavya and Naman were partners in a firm carrying on a tiffin service in Hyderabad Bhavya noticed that a lot of food is left at the end of the day. To avoid wastage, she suggested that it can be distributed to the needy; Naman wanted that it should be mixed with the food being served the next day. Naman then give a proposal that if his share in the profit increased, he will not mind free distribution of left over food Bhavya happily agreed So, they decided to change their profit sharing ratio 1:2 with immediate effect. On that date revaluation of assets and reassessment of liabilities was carried out that resulted into a gain of Rs. 18,000. On that date the goodwill of the firm was valued at Rs. 1,20,000.

  Based on the above information you are required to answer the following questions:

  Pass the journal entry for adjustment of goodwill.

   
  A)

  Naman's Capital A/c           Dr. 1,20,000

  To Bhavya's Capital A/c            1,20,000

    done clear
  B)

  Bhavya's Capital A/c           Dr.   60,000

  To Naman's Capital.A/c              60,000

    done clear
  C)

  Naman's Capital A/c            Dr.   20,000

  To Bhavya's Capital A/c               20,000

    done clear
  D)

  Bhavya's Capital A/c            Dr.  1,00,000

  To Naman's Capital A/c              1,00,000

    done clear
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