Class : XII Summer Vacations Assignment

1. A and B decided to allow a commission of 2 % on total sales to C as he devoted the maximum timein the business of partnership firm. Give the journal entry and identify the value highlighted here.

2. Under what circumstances change in profit sharing ratio is needed?3. How will the firm record the payment of realisation expenses which were to be borne by a partner

but paid by the firm on his behalf?4. State any two methods of valuation of goodwill on the basis of super profits.5. What is meant by partnership deed? Write any two contents of partnership deed.6. On 01.04.2014, A, B and C are partners sharing profits and losses in the ratio of 3 : 2 : 1. Accounts

are closed on 31st March annually. C died on 1st August, 2014. Besides his capital, C’s legal repre-sentative is entitled to:(i) Interest on capital at 10 % per annum upto the date of death.(ii) Partner’s share of profit based on the current year’s profit. It is estimated that current year’s

profit.(iii) Partner;s share in goodwill which is to be calculated at three year;s purchase of the average

profit of the last four years.C’s capital on 1st April, 2014 stood at ` 80,000 and his drawings from date to the death amounted toRs. 11,000. Profit and Loss for the last four years is 2010-11 : Rs. 30,000; 2011-12: Rs. 56,000;2012-13 : Rs. 10,000 (Loss) and 2013-14: Rs. 68,000 respectively.

7. Paras and Lokesh are partners in the firm, agreed to appropriate the profits of their firm on thefollowing terms:(a) Interest is payable on capital @ 5 % p.a.(b) Paras on loan to be given by the firm to the partners @ 10 % p.a.(c) Interest on loan to be given by the firm to the partners @ 10 % pa.a(d) Interest on drawings charged from the partners @ 5% p.a.(e) Lokesh will get commission @ 1 % on the sales made during the year.(f) Paras is entitled to rent Rs. 25,000 p.a. for allowing the firm to carry on the business in his

premises.The net profit and sales of the firm for the year ended 31st March, 2016 was Rs. 1,80,000 beforeabove adjustments and Rs. 7,00,000 respectively. Other particulars were :

Paras Lokesh Rs. Rs.

Capital balance on 01.04.2015 1,50,000 1,40,000` Loan advanced on 01.10.2015 - 1,00,000

Drawings made during the year 40,000 30,000Prepare Profit and Loss Appropriation A/c for year 2015-16 from the above transactions.

8. Aman and Harsh were partners in a firm. They decided to dissolve their firm. Pass necessary journalentries for the following after various assets (other than Cash and bank) and third party liabilitieshave been transferred to Realisation A/c:(a) There were furniture worth Rs. 50,000. Aman took over 50 % of the furniture at 10 % discount

and the remaining furniture was sold at 30 % profit on book value.(b) Profit and Loss Account was showing a credit balance of Rs. 15,000 which was distributed

between the partners.(c) Harsh’s loan of Rs. 6,000 was discharged at Rs. 6,200.(d) The firm paid realization expenses amounting to Rs. 5, 000.(e) Creditors, to whom the firm owed Rs. 6,000. accepted stock of Rs. 5,000 at a discount of 5 % and

the balance in cash.(f) The loss on dissolution was Rs. 8,000.

9. Sim, Tim and Jim are partners sharing profits and losses equally. Their Balance Sheet as at 31stMarch, 2016, stoods as follows:

From 1st April, 2016, the partners decide to share profits and losses in the ratio of 3 : 2 : 1 and forthat purpose the following revised value assets were agreed upon:Building Rs. 2,75,000, Plant and Machinery Rs. 90,000, Patents and Copyrights Rs. 1,32,5000,Stock Rs. 2,00,000, Prepaid Insurance Rs. 5,000 and Debtors Rs. 1,42,000. Goodwill of the firmwas valued at Rs. 60,000.Partners decide not to disturb the reserves. Also, they decide not to record the recised values ofassets in the books of accounts.You are required to:(a) Pass the necessary journal entry to give the effect to the above agreement without opening

revaluation account.(b) Prepare partners’ Capital Accounts and Balance Sheet of the reconstituted firm.(c) Show your workings clearly.

10. Ashish and Brijesh were partners in a firm sharing profits and losses in the ratio of 3 : 2. They weretrading in artificial limbs. On 1st April, 2016, they admitted Chaman, a good friend of Ashish, intothe partnership. The Balance Sheet of Ashish and Brijesh as at 31st March, 2016 was as follows:

Chaman was admitted in the firm on the following terms:(i) Chaman will bring in Rs. 30,000 as his share of capital but he was unable to bring any amount of

goodwill.(ii) The profit and loss sharing shall be so adjusted that, Ashish receives half of Brijesh’s share and

Chaman receives one third of Ashish’s share.(iii) The goodwill of the firm was valued at Rs. 60,000.(iv) The value of stock reduced by 10% and furniture was overvalued by Rs. 150.(v) The capitals of all the partners will be adjusted in their profit and loss sharing ratio.Prepare Profit and Loss Adjustment Account, Capital Accounts of Partners and Balance Sheet of thenew firm from the above.

OrAngad, Kunal and Nitin were partners sharing profits and losses in the proportion of 2 : 2: 1 respec-tively. The Balance Sheet of their firm as at 31st March, 2016 stood as follows:

Angad retires, due to illness, on 1st April, 2016, subject to the following adjustments:(a) Provision for bad and doubtful debts to be increased by Rs. 975.(b) Stock to be appreciated by 20% and Buildings by 10%.(c) Machinery to be depreciated by 10% and Motor Van by 15%.(d) Goodwill of the firm to be valued at Rs. 9,000. It is also decided that after retirement of Angad,

goodwill not to be shown in the books (as per accounting standard 26).(e) The capitals of the continuing partners are to be adjusted according to the new profit sharing

ratio which is agreed between Kunal and Nitin as 3 : 2 respectively.(f) Excess or shortfall in Kunal and Nitin’s Capital Accounts to be transferred to their respective

Current Accounts.You are required to prepare:(I) Revaluation Account(ii) Partners’ Capital Accounts(iii) Balance Sheet of the reconstituted firm

11. State one difference between partner’s loan account and partner’s capital account.12. When a new partner enters in a partnership firm, what is the amount called that he brings to share in

firm’s assets and profit?13. Why is Profit and Loss Suspense Account opened in case of death of a partner?14. Give the formula for determining capitalised value of average profit.15. P and Q are partners sharing profits and losses in the ratio of 3 : 2. P is a sleeping partner contributed

Rs. 5,00,000 as his capital. Q did not contribute any capital but agreed to act for firm. The partner-ship deed provided interest on capital and salary amount to Rs. 40,000 for the year ended 31stMarch 2015. Show the distribution of profit for the year 2014-15.

16. M/S Ram and Brothers was dissolved on 31st March, 2016. At that date, their assets and liabilitieswere as follows:

Other information:(i) Profit sharing ratio is 5 : 3 : 2 (Ram : Mohan : Sohan)(ii) ` 8,000 were bad debts and Creditors were paid full.(iii) Ram took 1/2 of sundry assets for ̀ 10,000 and remaining assets were sold in cash for Rs. 8,000.Pass the journal entries for closing the books of the firm.

17. The partnership agreement of Mandeep, NikhiI and Cm provides that:(a) Profits will be shared by them in the ratio of 2 : 2: 1.(b) Interest on capital to be allowed @ 6% per annum.(c) Interest on drawings to be charged @ 3% p.a.(d) Nikhil to be given a salary of Rs. 500 per month.(e) Nikhil’s guarantee to the firm that the firm would earn a net profit of at least 80,000 per annum

and any shortfall in these profits would be personally met by him.The capitals of the partners on 1st April, 2014 were Mandeep Rs. 1,20,000; Nikhil Rs. 1,00,000 andOm Rs. 1,00,000. During the financial year 2014-15, all the three partners withdrew Rs. 1,000 eachat the beginning of every month.The net profit of the firm for the year 2014-15 was ` 70,000.You are required to prepare Profit and Loss Appropriation Account.

18. Aastha, Bhavini and Chahat were partners in a firm in the ratio of 2 : 2 : 1. On 1st April, 2015,Chahat retired and new profit sharing ratio of Aastha and Bhavini is 2 : 3. Goodwill of the firm wasvalued at Rs. 6,00,000.Deven is admitted as a partner. Aastha surrenders 1/2 of her share and Bhavini surrenders 1/3 of hershare in favour of Chahat.

Deven is to bring his share of premium for goodwill in cash.Calculate:(i) The gaining ratio of Aastha and Bhavini on Chahat’s retirement.(ii) The new profit sharing ratio on Deven’s admission.(iii) Pass necessary journal entries for the recording of goodwill in the above case.

19. Sakshi, Ria and Mahak share profits and losses in the ratio of 3 : 2: 1 respectively. On 1st April,2015, they decided that Saksni, Ria and Mahak will share profits and losses in future in the ratio of2 : 2 : 1 respectively. From the informition given below complete Journal Entry, Partner’s CapitalAccounts and the new Balance Sheet:

20. Aditya and Bhupesh are partners in a firm sharing profits and losses in the ratio 2 : 3. Their BalanceSheet as at 31st March 2015, was as follows:

Chirag was to be taken as a partner with effect from 1st April, 2015 on the following terms:(a) The new profit sharing ratio of Aditya, Bhupesh and Chirag would be 5 : 3 : 2.(b) Provision for Doubtful Debts would be raised to 20% of Sundry Debtors.(c) Chirag would bring in cash, his share of capital of ` 40,000 and his share of goodwill valued at

Rs. 10,000.(d) Bhupesh would take over the furniture at Rs. 22,000.Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of the reconstitutedfirm.

OrPooja, Rohit and Sidharth are parthers in a firm sharing profits and losses in the ratio of 3 : 5 : 2. On31st March, 2014, their Balance Sheet was as under:

Pooja died on 30th September, 2014. An agreement was reached amongst Rohit, Sidharth and Pooja’slegal representative that:(a) Goodwill to be valued at two years purchase of the average profits of the previous three years

which were:Year 2011-12 2012-13 2013-14Profits Rs.31,200 Rs.28,800 Rs.36,000(b) Trademarks to be revalued at 19,200, Plant at 80% of its book value and Land and Building were

found to be undervalued by Rs. 9,600.(c) Pooja’s share of profit to the date of her death to be calculated on the basis of previous year’s

profit.(d) Interest on capital to be provided @10% per annum.(e) Rs. 22,840 to be paid in cash to Pooja’s legal representative and balance to be transferred to the

legal representative’s loan account.You are required to prepare Revaluation Account, Partners’ Capital Accounts and new BalanceSheet of the firm.

21. What is meant by reconstitution of partnership firm?22. Ankit, Bimal and Cheena are partners in firm sharing profits and losses in the ratio of 5 : 3 : 2. At the

time of retirement of a partner, the goodwill of the firm was valued at Rs. 3,00,000. The accountantof the firm passed the entry in the books of accounts and thereafter showed goodwill at ` 3,00,000 asan asset in the balance sheet. Was he correct in doing so? Why?

23. How will the firm record the payment of realisation expenses which were not to be borne by apartner, but paid by the partner.

24. Give one difference between fixed capital method and fluctuating capital method.25. A and B are partners with capitals of Rs. 2,00,000 and Rs. 1,00,000 respectively. Profit sharing ratio

between A and B is 3 : 2. They admitted C as a partner with 1/5th share in firm’s profit. C brings `1,00,000 as his share of capital and necessary amount of goodwill. pass necessary journal entriesregarding capital and goodwill on C’s admission.

26. (a) Veera and Sia are partners sharing profits in the ratio of 4 : 1. Profit for the year 2014-15amounting to Rs. 18,000 was distributed wrongly in the ratio of 1 : 4. You are required to rectify theerror by passing an adjusting journal entry.(b) Partners decided that 10 % profits of every year be given to Hakikat Nagar Welfare Associationfor establishing waste management mechanism by setting up a door collection system of waste.Identify values.

27. A, B and C were partners in a firm sharing profits and losses in the ratio 5 : 3 : 2. Goodwill isappearing in the books at the value of Rs. 24,000. On 1st April, 2015, C retires from the firm and onthe same day, D is admitted into the firm. The new ratio between A, B and D is agreed at 2 : 2 : 1. Dbrings Rs. 60,000 for his share of capital but could not bring his share of goodwill in cash. Goodwillof the firm is valued at Rs. 1,00,000. You are required to pass necessary journal entries.

28. What is the maximum number of partners that a partnership firm can have Name the Actthat provides for the maximum number of partners in a partnership firm.

29. Would a "charitable dispensary" run by 8 members be deemed a partnership firm` Givereason in support of your answer.

30. When the partners' capitals are fixed, where will the drawings made by a partner be re-corded`

31. On dissolution of a firm, where is Advertisement Suspense transferred?32. In the event of dissolution of a partnership firm, where is the provision for depreciation

transferred?33. Distinguish between ‘Dissolution of Partnership’ and ‘Dissolution of Partnership firm’ on

the basis of ‘Closure of Business’.34. At the time of dissolution of a firm, creditors are Rs. 80,000; Partners Capital is Rs. 1,30,000,

cash balance is Rs. 20,000. Other assets realised Rs. 1,60,000. What will be the profit/lossin the realisation account?

35. Amit and Sumit were partners sharing profit in the ratio of 2 : 1. Pass journal entries underfollowing situation at the time of dissolution of firm :(i) Workmen Compensation Reserve stood at Rs. 3,00,000 and there was no liability towardsworkmen compensation.(ii) Workmen Compensation Reserve stood at Rs. 1,00,000 and liability in respect of it wasas certained at Rs. 25,000.(iii) Workmen Compensation Reserve stood at Rs. 80,000 and liability in respect of it wasascertained at Rs. 1,10,000.

36. Make journal entries from following :(i) Expenses of Realisation Rs. 18,000.(ii) Expenses of Realisation Rs. 20,000 were paid by a partner.(iii)Realisation expenses of Rs. 22,000 were to be met by Vishal, a partner, but were paid bythe firm.(iv) Rajesh a partner, was paid remuneration of Rs. 15,000 and he was to meet all expenses.

37. On dissolution of a firm, where is cash in hand transferred?38. In the event of dissolution of a partnership firm, where is the provision

for doubtful debts transferred?39. Distinguish between ‘Dissolution of Partnership’ and ‘Dissolution of Partnership firm’ on

the basis of ‘Closure of books.40. At the time of dissolution of a firm, creditors are Rs. 70,000; Partners Capital is Rs. 1,20,000,

cash balance is Rs. 10,000. Other assets realised Rs. 1,50,000. What will be the profit/lossin the realisation account?

41. Manoj and Nand were partners sharing profit in the ratio of 3 : 2. Pass journal entries underfollowing situation at the time of dissolution of firm :(i) Workmen Compensation Reserve stood at Rs. 1,00,000 and there was no liability towardsworkmen compensation.(ii) Workmen Compensation Reserve stood at Rs. 1,00,000 and liability in respect of itswas ascertained at Rs. 75,000.(iii) Workmen Compensation Reserve stood at Rs. 1,00,000 and liability in respect of it wasascertained at Rs. 1,20,000.

42. Make journal entries from following :(i) Expenses of Realisation Rs. 8,000.(ii) Expenses of Realisation Rs. 10,000 were paid by a partner.(iii)Realisation expenses of Rs. 12,000 were to be met by Tushar, a partner, but were paid bythe firm.(iv) Suresh a partner, was paid remuneration of Rs. 10,000 and he was to meet all expenses.

43. When a creditor takes over an asset whose value is less than the amount due to him in fullsettlement of his claim, what entry shall be passed ?

44. How is Workmen Compensation Reserve shown in the Balance Sheet of a partnership firm,treated at the time of its dissolution?

45. What is meant by Reserve capital ?46. What is over - subscription ?47. What rate of interest on calls in Arrear can be charged by a company according to Table - F

of schedule I of the Companies Act, 2013 ?48. Manoj and Nand were partners sharing profit in the ratio of 3 : 2. Pass journal entries under

following situation at the time of dissolution of firm :(i) Workmen Compensation Reserve stood at Rs. 1,00,000 and there was no liability towardsworkmen compensation.

(ii) Workmen Compensation Reserve stood at Rs. 1,00,000 and liability in respect of itswas ascertained at Rs. 75,000.(iii) Workmen Compensation Reserve stood at Rs. 1,00,000 and liability in respect of it wasascertained at Rs. 1,20,000.

49. Differentiate between ‘Dissolution of Partnership’ and ‘Dissolution of Partnership Firm’.50. Differentiate between ‘Capital Reserve’ and ‘Reserve Capital’.51. Write four points of differences between an equity share and a preference share.52. Pass journal entries for the following :

(i) X Ltd. purchased Land and Building from R. Sundram for Rs. 5,00,000 payable in fully paid shares of Rs. 100 each at a premium of 25% .(ii) Y Ltd. decided to issue 2,000 shares of Rs. 100 each at the Unit Trust of India asunderwriting Commission.

53. Make journal entries from following :(i) Expenses of Realisation Rs. 8,000.(ii) Expenses of Realisation Rs. 10,000 were paid by a partner.(iii)Realisation expenses of Rs. 12,000 were to be met by Tushar, a partner, but were paid bythe firm.(iv) Suresh a partner, was paid remuneration of Rs. 10,000 and he was to meet all expenses.

54. When a partner takes over an asset whose value is less than the amount due to him in fullsettlement of his claim, what entry shall be passed ?

55. How is Investment Fluctuation Reserve shown in the Balance Sheet of a partnership firm,treated at the time of its dissolution?

56. What is meant by Capital Reserve ?57. What is under - subscription ?58. What rate of interest on calls in Advance can be charged by a company according to Table -

F of schedule I of the Companies Act, 2013 ?59. Ashish and Deekshu were partners sharing profit in the ratio of 2 : 1. Pass journal entries

under following situation at the time of dissolution of firm :(i) Workmen Compensation Reserve stood at Rs. 3,00,000 and there was no liability towardsworkmen compensation.(ii) Workmen Compensation Reserve stood at Rs. 1,00,000 and liability in respect of itswas ascertained at Rs. 25,000.(iii) Workmen Compensation Reserve stood at Rs. 80,000 and liability in respect of it wasascertained at Rs. 1,10,000.

60. Differentiate between ‘Realisation Account’ and ‘Revaluation Account’.61. Differentiate between ‘Preference Share’ and ‘Equity Share’.62. Write four points of differences between an Capital Reserve and a Reserve Capital.63. Pass journal entries for the following :

(i) X Ltd. purchased Furniture from R. Sundram for Rs. 5,00,000 payable in fully paid shares of Rs. 100 each at a premium of 25% .(ii) Z Ltd. decided to issue 2,000 shares of Rs. 100 each at the Unit Trust of India asunderwriting Commission.

63. Make journal entries from following :(i) Expenses of Realisation Rs. 18,000.(ii) Expenses of Realisation Rs. 20,000 were paid by a partner.(iii)Realisation expenses of Rs. 22,000 were to be met by Tushar, a partner, but were paid bythe firm.(iv) Suresh a partner, was paid remuneration of Rs. 20,000 and he was to meet all expenses.

64. Pass Journal entries for the forfeiture and re-issue of shares in the following cases :(i) X Ltd. forfeited 1000 shares of Rs. 100 each fully called- up for Non-payment of First

call of Rs. 30 per share and final call of Rs. 30 per share. All of these shares were re-issuedas fully paid for Rs. 100 per share.(ii) L Ltd. forfeited 4,000 shares of Rs.100 each fully called up Non-Payment of final call ofRs. 30 per share. 3,000 of these shares were re-issued as fully paid up for Rs. 80 per share.

65. Pass Journal entries for the forfeiture and re-issue of shares in the following cases :(i) A Ltd. forfeited 100 shares of Rs. 10 each fully called- up for Non-payment of First callof Rs. 3 per share and final call of Rs. 3 per share. All of these shares were re-issued as fullypaid for Rs. 10 per share.(ii) B Ltd. forfeited 400 shares of Rs.10 each fully called up Non-Payment of final call ofRs. 3 per share. 300 of these shares were re-issued as fully paid up for Rs. 8 per share.

66. If vendors are issued fully paid shares of Rs. 4,75,000 against purchase consideration of Rs.400000 the balance of Rs 75,000 will be debited to:(a) Goodwill A/c (b) Capital Reserve A/c(c) Discount A/c (d) Statement of Profit & Loss

67. After reissue of share forfeited, the balance of 'Share Forfeited A/c' is transferred to:(a) Capital Reserve A/c (b) Reserve Capital A/c(c) Share Capital A/c (d) General Reserve A/c

68. Joy Ltd. issued 1,00,000 equity shares of Rs.10 each. The amount was payable as follows:On application - Rs. 3 per share.On allotment - Rs. 4 per share.On first and final call - balance Applications for 95,000 shares were received and shareswere allotted to all the applicants. Som whom 500 shares were allotted failed to pay allot-ment money and Gautam paid his entire anr due including the amount due on first and finalcall on the 750 shares allotted to him along allotment. The amount received on allotmentwas(a) Rs. 3,80,000 (b) Rs. 3,78,000(c) Rs. 3,80,250 (d) Rs. 4,00,250

69. Nirman Ltd. issued 50,000 equity shares of Rs. 10 each. The amount was payable as fol-lows: On application - Rs. 3 per share On allotment - Rs. 2 per share On first and final call- The balanceApplications for 45,000 shares were received and shares were allotted to all the applicants.Pooja, to whom 500 shares were allotted, paid her entire share money at the time of allot-ment, whereas Kundan did not pay the first and final call on his 300 shares. The amountreceived at the time of making first and final call was:(a) Rs. 2,25,000 (b) Rs. 2,20,000(c) Rs. 2,21,000 (d) Rs. 2,19,000

70. If a share of Rs. 10 issued at a premium of Rs. 3 on which the full amount has been calledand Rs. 8 (including premium) paid is forfeited, the share capital is debited with:(a) Rs. 13 (b) Rs. 10 (c) Rs. 8 (d) Rs. 6

71. Debentureholders are(a) the owners of the company (b) the vendors of the company(c) the creditors of the company (d) the debtors of the company

72. In the Balance Sheet of a company, debentures are generally shown under the head of(a) Share Capital (b) Non-current Liabilities(c) Current Liabilities (d) Non-current Assets

73. Discount/loss on issue of debentures should be written off(a) within 2 years of the issue of debentures(b) after the redemption of debentures(c) in the year of issue of debentures(d) during the life of debentures

74. Debentureholders are entitled to receive from the company:(a) Dividend (b) Interest(c) Share of Profit (d) None of the above

75. At the time of issue, Debentures Account is(a) credited by the amount received(b) credited by the face value of debentures(c) credited by the issue price of the debentures(d) none of the above.

76. For recording the issue of debentures as collateral security, the amount of debenturesissued is debited to(a) Statement of Profit and Loss (b) Debentures Suspense Account(c) Debentures Account (d) General Reserve Account

77. Discount on issue of debentures is classified as:(a) Fixed Asset (b) Current Liability(c) Fictitious Asset (d) None of these

78. The discount on issue of debentures is:(a) Capital profit (b) Capital gain(c) Capital loss (d) All of the above

79. Premium on Redemption of Debentures Account is:(a) Asset (b) Liability(c) Expenses (d) Revenue

80. Those debentures in which the holders are given option to partially or fully convertdebentures into equity shares after a specified period are known as:(a) Registered Debentures (b) Mortgage Debentures(c) Naked Debentures (d) Convertible Debentures

81. On 1st April, 2013 Jay and Vijay, entered into partnership for supplying laboratory equip-ments to government schools situated in remote and backward areas. They contributed capitalsof Rs. 80,000 and Rs. 50,000 respectively and agreed to share the profits in the ratio of 3 : 2.The partnership deed provided that interest on capital shall be allowed at 9% per annum.During the year, the firm earned a profit of Rs. 7,800.Showing your calculations clearly, prepare 'Profit and Loss Appropriation Account' of Jayand Vijay for the year ended 31st March, 2014. [CBSE Delhi 2015]

82. On 31st March, 2017 after the closing of books of accounts, the capital accounts of Ram,Shyam and Mohan showed balance of Rs.24,000, Rs. 8,000 and Rs.12,000 respectively.But, it was later discovered that interest on capital @5% had been omitted. The profit forthe year ended 31st March, 2017 amounted to Rs.36,000 and the partners drawings hadbeen Ram Rs. 3,600, Shyam Rs. 4,500 and Mohan Rs. 2,700. The profit-sharing ratio ofRam, Shyam and Mohan was 3:2:1. Calculate interest on capital.

83. What are the required adjustments when existing partners decide to change their profit-sharing ratio?

84. Give the formulae of goodwill by 'Capitalisation of Average Profits'.85. Why is goodwill not recorded in the books of accounts at the time of'Reconstitution of a

firm'?86. Define 'Change in Profit-sharing Ratio'.87. At the time of'Change in Profit-sharing Ratio', who compensates whom?88. Afirmhas asset of worth Rs. 6,00,000 and liabilities of Rs. 3,50,000. The normal profit rate

is 15%. State the value of normal profits.89. State one right acquired by a newly admitted partner.90. Define hidden goodwill.

91. Why do we distribute reserves, accumulated profits and losses among the old partners at thetime of admission of a partner?

92. S and T are partners sharing profits and losses equally. They admit U as partner for l/3rdshare which he takes from T. U brings 25,000 as his share of goodwill. S wants to share thegoodwill brought by U equally whereas T is of the opinion that Rs. 25,000 should be cred-ited to his capital account. Who is correct and why?

93. A firm's balance sheet showed 'Investments Fluctuation Reserve of Rs. 30,000. A new part-ner is admitted. Market value of Investment is `60,000 against its book value of Rs. 80,000.What amount out of'Investment Fluctuation Reserve will be distributed among old part-ners?

94. X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. They admit A intopartnership and give him l/5th share of profits. Find out the new profit-sharing ratio.

95. L and M are sharing profits and losses in the ratio of 2 : 2. They admit N as a partner whotakes l/4th share from L and l/8th share from M. Calculate the new profit-sharing ratio of thepartners.

96. M and N are partners, sharing profits in the ratio of 3 : 2. Q joins the firm as a new partner.M gives l/4th of his share and N gives 2/5th of his share to the new partner. Find out the newratio.

97. What is meant by retirement of a partner?98. Is a retiring partner liable for firm's actions before his retirement?99. Mention two adjustments to be made at the time of retirement or death of a partner.100. How is goodwill treated at the time of retirement of a partner?

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