Gujarat Board GSEB Class 12 Commerce Accounts Important Questions Part 1 Chapter 4 Reconstruction of Partnership Important Questions and Answers.
GSEB Class 12 Accounts Important Questions Part 1 Chapter 4 Reconstruction of Partnership
Answer the following questions in one or two sentences :
Question 1.
State the reasons/causes for reconstruction of partnership.
Answer:
Following are the main reasons for reconstruction of partnership :
- Retirement or death or a partner,
- Changes in the proportion of profit or loss,
- Admission of a new partner,
- Death of a partner,
- Amalgamation of two partnership firm.
Question 2.
Due to which reasons changes in profit and loss ratio is possible with the consent of all partners ?
Answer:
Reasons for changes in profit and loss ratio is possible with the consent of all partners are as follows.
- When partner is not able to spare sufficient time for the business and its activities
- Due to health issue partner is not able to do allotted work and other partner has to do that work.
- Due to personal reason/s partner is not able to do management /administration work.
Question 3.
Write the formula for sacrifice ratio.
Answer:
Sacrifice ratio = Old ratio of profit and loss – New ratio of profit and loss
Question 4.
Write the formula for gain ratio.
Answer:
Gain ratio = New ratio of profit and loss – Old ratio of profit and loss
Question 5.
At the time of finding out sacrifice ratio or gain ratio if negative answer is there what is suggest ?
Answer:
Negative answer of sacrifice ratio suggest gain for partner and negative answer of gain ratio suggest sacrifice for partner.
Question 6.
What debit balance and credit balance of revaluation account suggest ?
Answer:
Debit balance and credit balance of revaluation account suggest respectively loss and profit or gain for the firm.
Question 7.
At the time of reconstruction, balance of revaluation account is transfer to which account and in which ratio ?
Answer:
At the time of reconstruction, debit balance (loss) of revaluation account is transferred to debit side of current partners’ capital/current account and credit balance (profit) transfered to credit side of current partners’ capital/current account in their old profit and loss sharing ratio.
Question 8.
Why the capital account of partners are prepared after revaluation ?
Answer:
Capital accounts of partners are prepared because of preparing balance sheet of the firm after revaluation and to find out balance of capital account of partners after giving effects of revaluation.
Select the appropriate option for each questions :
Question 1.
Change in partnership due to several reasons means ………………
(A) Reconstruction of partnership
(B) Co-ordination of partnership
(C) Dissolution of partnership firm
(D) Starting of partnership firm
Answer:
(A) Reconstruction of partnership
Question 2.
Which of the following reason in not included in the reconstruction of partnership ?
(A) Change in profit-loss sharing ratio between current partners.
(B) Admission of a new partner in current partnership firm
(C) Retirement or Death of a parnter from current partnership firm
(D) All partners are separated from current partnership firm
Answer:
(D) All partners are separated from current partnership firm
Question 3.
How the profit-loss sharing ratio can be change between partners of current partnership firm ?
(A) Can be change by consent of all partners
(B) Can be change by consent of majority partner
(C) Can be change by consent of government of firm
(D) Can be change by consent of creditors of firm
Answer:
(A) Can be change by consent of all partners
Question 4.
If the partner’s old share of profit is higher than new share then it is known as ………………
(A) Sacrifice of partner
(B) Gain of partner
(C) Loss of partner
(D) Profit of partner
Answer:
(A) Sacrifice of partner
Question 5.
How is the new share of profit in comparison of old share of profit of a partner then it would be said that gain of a partner ?
(A) Loss
(B) Equal
(C) More
(D) Half
Answer:
(C) More
Question 6.
If the answer is negative by sacrifice formula of partner, then it is said …………….
(A) Sacrifice done by partner
(B) Sacrifice not done by partner
(C) Gain is not received by partner
(D) Loss of a partner
Answer:
(A) Sacrifice done by partner
Question 7.
If the gain of a partner is zero then it is said ……………..
(A) No gain to partner
(B) Partner’s new share of profit is higher
(C) Gain of a partner
(D) Partner’s old share to profit is higher
Answer:
(A) No gain to partner
Question 8.
Where the decrease in value of assets at the time of reconstruction of partnership firm recorded ?
(A) Debited to Revaluation A/c
(B) Debited to Profit and Loss A/c
(C) Credited to Revaluation A/c
(D) Debited to Partner’s Capital/Current A/c
Answer:
(A) Debited to Revaluation A/c
Question 9.
Decrease in value of debts because of revaluation then what is its effects on revaluation account ?
(A) Debit
(B) Debit and Credit
(C) Credit
(D) Not recorded
Answer:
(C) Credit
Question 10.
What is meant by debit balance of revaluation account ?
(A) Profit
(B) Loss
(C) Debit
(D) Increase in asset
Answer:
(B) Loss
Question 11.
What is meant by credit balance of revaluation account ?
(A) Profit
(B) Debit
(C) Loss
(D) Increase in debt
Answer:
(A) Profit
Question 12.
At the time of reconstruction of partnership firm, where the fictitious assets of the balance sheet is recorded ?
(A) Debit side of Revaluation A/c
(B) Credit side of Revaluation A/c
(C) Credit side of Partners’ capital/current A/c
(D) Debit side of Partners’ capital/current A/c
Answer:
(D) Debit side of Partners’ capital/current A/c
Question 13.
At the time of reconstruction of partnership firm, where the workers accident compensation fund of the balance sheet is recorded ?
(A) Debit side of Revaluation A/c
(B) Credit side of Partners’ Capital/Current A/c
(C) Credit side of Revaluation A/c
(D) Debit side of Partners’ Capital/Current A/c
Answer:
(B) Credit side of Partners’ Capital/Current A/c
Question 14.
Who shared accumulated profit or reserve fund ?
(A) New partners
(B) Employees
(C) Current partners
(D) None of the given
Answer:
(C) Current partners
Question 15.
What is the workers profit sharing fund for partnership firm ?
(A) Debit
(B) Reserve
(C) Receivable
(D) Profit
Answer:
(A) Debit
Question 16.
At the time of reconstruction to which account the amount of reserve fund is credited ?
(A) Profit and Loss A/c
(B) Revaluation A/c
(C) Profit and Loss Appropriation A/c
(D) Partners’ Capital/Current A/c
Answer:
(D) Partners’ Capital/Current A/c
Question 17.
If prepaid expenses or income not received are not recorded in the books then at the time of revaluation where it can be shown ?
(A) Debited to Revaluation A/c
(B) Debited to Partners’ Capital A/c
(C) Credited to Revaluation A/c
(D) Credited to Partners’ Capital A/c
Answer:
(C) Credited to Revaluation A/c
Question 18.
From the following which amount is credited to partners’ capital or current A/c at the time of reconstruction ?
(A) Debit balance of Profit-Loss A/c
(B) Workers’ Accident Compensation Fund
(C) Workers Profit sharing Fund
(D) Providend Fund
Answer:
(B) Workers’ Accident Compensation Fund
Question 19.
If Tanmay and Manthan change their profit and loss sharing ratio from 3 : 2 to 2 : 1 then
(A) Tanmay’s gain and Manthan has to sacrifice.
(B) Both has to sacrifice
(C) Tanmay has to sacrifice and Manthan has gain
(D) Both get gain
Answer:
(A) Tanmay’s gain and Manthan has to sacrifice.
Question 20.
Ram, Shyam and Gopal are the partners sharing profit and loss in the ratio of 3 : 2 : 1. They decided to change their profit and loss sharing ratio to 2 : 2 : 1. Determine the gain of partner shyam.
(A) \(\frac {2}{30}\)
(B) \(\frac {1}{30}\)
(C) \(\frac {3}{30}\)
(D) 0
Answer:
(A) \(\frac {2}{30}\)
Give answer the following questions :
Question 1.
Raj, Dev and Dilip are the partners sharing profit and loss in the ratio of 2 : 2 : 1. Their firm’s balance sheet as on 31-3-2018 is as under :
As on above date of the balance sheet, partners decided to change profit-loss sharing ratio to 2:2: 1. On this date they decided to revalue the assets and liabilities for which information is as
under :
(1) The value of land is to be increased upto ₹ 2,50,000 and calculate the value of building is ₹ 3,50,000. (2) The value of machinery is to be decreased upto ₹ 1,20,000 and the value of investment is to be reduced by 10%. (3) ₹ 5,000 is to be decreased in the value of stock. (4) Provision for bad debt reserve at 10% and discount reserve at 5% is to be made on debtors. (5) An amount of ₹ 25,000 is not to be paid to creditors. (6) X3,000 for outstanding expenses and ₹ 2,000 for income receivable are not recorded in books.
From the above information write journal entries in the books of partnership firm and also prepare the revaluation account and balance sheet after revaluation.
Answer:
Profit of Revaluation A/c ₹ 28,200 (Raj ₹ 11,280, Dev ₹ 11,280 and Dilip ₹ 5,640); Closing Balance of Capital A/c : Raj ₹ 61,280, Dev ₹ 1,91,280 and Dilip ₹ 2,25,640; Total of Balance Sheet ₹ 8,81,200
Question 2.
Akruti, Prakruti and Swikruti are the partners of a firm sharing profit and loss in the ratio of 5 : 3 : 2. On 31-3-2018 they decided to change their profit-loss sharing ratio to 3 : 2 :1 and also decided to revalue the assets and liabilities. From the following information prepare revaluation account and balance sheet after revaluation.
Additional Information : (1) The value of land-building is to be increased by 20% and the value of furniture is to be reduced by 10%. (2) The value of machinery is to be kept 75%. (3) The book value of closing stock is 10% more than its market value. (4) Provision for bad debts reserve at 10% is to be made on debtors. (5) An amount of ₹ 5,000 among the creditors is now not to be paid. (6) Interest on bank loan for last three month is outstanding.
Answer:
Loss of revaluation A/c ₹ 7,500 (Akruti ₹ 3,750, Prakruti ₹ 2,250 and Swikruti ₹ 1,500); Closing balance of Current A/c : Akruti ₹ 11,250; Prakruti ₹ 17,750 and Swikruti ₹ 8,500; Total of balance sheet ₹ 4,49,000
Question 3.
Ajay, Vijay and Sanjay are the partner of a partnership firm sharing profit and loss in the ratio of 2:2:1. They want to change their profit-loss sharing ratio to 5:3:2. Therefore, they decided to have the revaluation of firm’s assets and liabilities. From the following information, write necessary journal entries and prapare revaluation account and balance sheet after revaluation in the books of firm.
Additional Information : (1) The value of Land-Building is to be increased by ₹ 25,000 and the value of machinery and furniture is to be decreased by 10%. (2) Market value of investment is ₹ 60,000 which is shown at actual value. (3) ₹ 5,000 repairing expense is required for stock. (4) Total amount of ₹ 7,500 is to be kept for bad debts reserve on debtors. (5) From creditors 10% cradiors are not to be paid. (6) Outstanding expense is ₹ 3,000 and income receivable is ₹ 5,000.
Answer:
Profit of Revaluation A/c ₹ 7,000 (Ajay ₹ 2,800, Vijay ₹ 2,800 and Sanjay ₹ 1,400); Closing balance of Capital A/c : Ajay ₹ 2,02,800; Vijay ₹ 2,32,800 and Sanjay ₹ 2,21,400; Total of Balance Sheet ₹ 7,55,500
Question 4.
Jayendra and Mahendra are the partners of a firm sharing profit and loss in the ratio of 3 : 2. Balance Sheet of the firm as on 31-3-2018 is given under :
As on above balance sheet date, partners changed profit and loss sharing ratio to 1:1 and the following revaluation account is prepared for the revaluation of assets and liabilities.
Amount of claim for workers’ accident compensation fund was ₹ 5,000.
From the above information, write necessary journal entries in the books of the firm and also prepare capital accounts of partners and balance sheet after revaluation.
Answer:
Closing Capital of partners : Jayendra ₹ 1,83,000; Mahendra ₹ 1,22,000, Total of Balance Sheet ₹ 4,16,500