Problem 1.1 (Easy)

Question: A, B, and C are partners sharing profits equally. C dies. Goodwill of the firm is valued at ₹60,000. Pass the journal entry for goodwill adjustment.

Solution:

Problem 1.2 (Medium)

Question: P, Q, and R are partners sharing profits in the ratio 3:2:1. R dies. P and Q decide to share future profits in 2:1. Goodwill is valued at ₹1,80,000. Calculate gaining ratio and pass journal entry.

Solution:

Problem 1.3 (Hard)

Question: X, Y, and Z are partners sharing profits in 5:3:2. Z dies on 30th June 2024. Goodwill is to be valued at 3 years' purchase of average profits of last 4 years. Profits were: 2020-21: ₹80,000; 2021-22: ₹1,00,000; 2022-23: ₹1,20,000; 2023-24: ₹1,40,000. X and Y continue in ratio 3:2. Pass necessary journal entries including goodwill adjustment.

Solution:

Problem 2.1 (Easy)

Question: L, M, and N are partners sharing profits equally. N dies. L and M continue to share profits equally. Calculate gaining ratio.

Solution:

Problem 2.2 (Medium)

Question: A, B, C, and D are partners sharing profits in 4:3:2:1. D dies. The remaining partners decide to share profits in 5:3:2. Calculate the gaining ratio.

Solution:

Problem 2.3 (Hard)

Question: P, Q, R, and S are partners with capitals ₹3,00,000, ₹2,50,000, ₹2,00,000, and ₹1,50,000 sharing profits in the ratio of their capitals. S dies. The remaining partners agree to acquire S's share in the ratio 3:2:1. Calculate: (a) Old profit-sharing ratio, (b) New profit-sharing ratio, (c) Gaining ratio.

Solution:

Problem 3.1 (Easy)

Question: A, B, and C share profits equally. C dies. Machinery is to be appreciated by ₹15,000. Prepare Revaluation Account.

Solution:

Problem 3.2 (Medium)

Question: X, Y, and Z are partners sharing profits 2:2:1. Z dies. Following adjustments are required:

• Building appreciated by ₹30,000
• Furniture depreciated by ₹8,000
• Stock depreciated by ₹5,000
• Provision for doubtful debts to be created @ 5% on debtors of ₹40,000

Prepare Revaluation Account.

Solution:

Problem 3.3 (Hard)

Question: P, Q, and R are partners sharing profits in 3:2:1. R dies on 31st March 2024. The following adjustments are to be made:

• Land & Building (Book value ₹2,00,000) appreciated by 20%
• Plant & Machinery (Book value ₹1,50,000) depreciated by 10%
• Stock to be reduced by 15% (Book value ₹80,000)
• Provision for doubtful debts to be maintained @ 8% on debtors of ₹60,000
• An unrecorded liability of ₹10,000 to be provided
• An unrecorded asset (Investment) of ₹25,000 to be brought into books

Prepare Revaluation Account and calculate each partner's share.

Solution:

Problem 4.1 (Easy)

Question: A, B, C share profits equally. C dies. General Reserve stands at ₹30,000. Pass journal entry.

Solution:

Problem 4.2 (Medium)

Question: P, Q, R share profits 2:2:1. R dies. Balance Sheet shows: General Reserve ₹50,000; P&L A/c (Dr.) ₹20,000; Investment Fluctuation Reserve ₹15,000 (Market value of investments ₹12,000). Pass journal entries.

Solution:

Problem 4.3 (Hard)

Question: X, Y, Z share profits in 5:3:2. Z dies on 30-09-2024. Balance Sheet shows:

• General Reserve: ₹1,00,000
• Profit & Loss A/c (Cr.): ₹60,000
• Workmen Compensation Reserve: ₹80,000 (Claim ₹50,000)
• Investment Fluctuation Reserve: ₹40,000 (Investments Market Value: ₹35,000)
• Profit for current year (estimated): ₹1,20,000

Pass all necessary journal entries including Z's share of current year profit (6 months).

Solution:

Problem 5.1 (Easy)

Question: A, B, C share profits equally. C dies on 30-06-2024. Last year profit: ₹90,000. Calculate C's share (Time basis).

Problem 5.2 (Medium)

Question: P, Q, R (2:2:1). R dies 31-08-2024. Profit ₹1,50,000. Sales ₹4L/₹12L. Calculate both methods.

Problem 5.3 (Hard)

Question: X, Y, Z (3:2:1). Z dies 15-10-2024. Average profit ₹2,40,000. Expected ₹3,00,000. Calculate.

Problem 6.1 (Easy)

Question: N's capital ₹1,50,000. Died 30-09-2024. Interest @ 8%. Calculate.

Problem 6.2 (Medium)

Question: C's capital ₹1,00,000. Drew ₹10,000 on 01-05. Died 31-07-2024. Interest 10%.

Problem 6.3 (Hard)

Question: R's capital ₹1,00,000. Added ₹50,000 (01-06). Drew ₹15,000 (01-07). Died 31-08. Interest 12%.

Problem 7.1 (Easy)

Question: S died. Capital ₹80K, Drawings ₹12K, Profit ₹15K, Goodwill ₹10K. Prepare capital A/c.

Problem 7.2 (Medium)

Question: Complete capital A/c with revaluation, reserves, goodwill, interest.

Problem 7.3 (Hard)

Question: Complex capital A/c with joint life policy, investment loss, interest on drawings.

Problem 8.1 (Easy)

Question: Amount due ₹80,000. Paid immediately. Prepare Executor A/c.

Problem 8.2 (Medium)

Question: ₹1,20,000 due. ₹40K immediate, balance 2 installments @ 10% interest.

Problem 8.3 (Hard)

Question: Settlement in cash, goods, and 3 annual installments with interest.

Problem 9.1 (Easy)

Question: Amount due ₹1,00,000. Paid in cash. Pass entries.

Problem 9.2 (Medium)

Question: ₹1,50,000 due. Convert to loan @ 10% p.a. Pass entries.

Problem 9.3 (Hard)

Question: ₹2,00,000 due. 30% cash, 40% goods, 30% loan. Show complete settlement.

Problem 10.1 (Easy)

Question: A, B, C equal. C dies. A & B continue equally. Find new ratio.

Problem 10.2 (Medium)

Question: P, Q, R (4:3:2). R dies. P & Q decide 3:2. Calculate gaining ratio.

Problem 10.3 (Hard)

Question: Four partners, one dies. Remaining acquire share in specific ratio. Calculate all ratios.

Problem 11.1 (Easy)

Question: Pass 5 basic entries for death: Revaluation, Reserve, Goodwill, Profit, Transfer.

Problem 11.2 (Medium)

Question: Complete 10 entries including interest, investment loss, settlement.

Problem 11.3 (Hard)

Question: 15+ entries with joint life policy, workmen compensation, installment settlement.

Problem 12.1 (Easy)

Question: Prepare balance sheet after death with basic adjustments.

Problem 12.2 (Medium)

Question: Balance sheet with goodwill, reserves distributed, executor loan.

Problem 12.3 (Hard)

Question: Complex balance sheet with joint life policy claim, P&L suspense, investments.