CBSE Test Paper 01
Ch-3 Change in Profit sharing ratio of Partners
1. Annual profit shown by a business is Rs.20,000. Normal rate of return 10%. Total
assets of the business firm Rs.2,40,000 and liabilities Rs.80,000. Value of Goodwill will
be:
a. Rs.40,000
b. Rs.30,000
c. Rs.20,000
d. No Goodwill of Business
2. The partner whose share has increased as a result of change is called
a. Gaining partner
b. Sacrificing partner
c. Sacrificing ratio
d. Gaining ratio
3. AK, BK and CK are sharing profits in the ratio of 2:1:1. They have decided to share
future profits in the ratio of 3:2:1. Find out the gainer partner.
a. Both AK is the gainer partner and CK is the gainer partner
b. CK is the gainer partner
c. BK is the gainer partner
d. AK is the gainer partner
4. If Assets are increasing but liabilities decreasing; in such a case Revaluation A/c will
show_____
a. Do not prepare Revaluation A/c
b. Neither Gain or Loss
c. Profit
d. Net loss
5. A, B and C are partners sharing profits in the ratio of capitals (old 5:3:2 and new
2:3:5).Their capital after adjustment in new capital ratio are ` 20,000, ` 30000, `
50000. Who will bring the amount of actual cash for adjustment?
a. None of these
b. C
c. B
1 / 10
d. A
6. P and Q are sharing profit and losses equally .With effects from current year they
decided to share profits in the ratio of 4:[Link] individual partner’s gain and
Sacrifice
a. P gains 1/12 th share and Q sacrifices 1/14 th share
b. P gains 1/14 th share and Q sacrifices 1/14 th share
c. P gains 1/10 th share and Q sacrifices 1/14 th share
d. P gains 1/15th share and Q sacrifices 1/14 th share
7. State any two occasions on which a firm can be reconstituted.
8. What is meant by change in Profit-Sharing Ratio?
9. What do you understand by New Profit-Sharing Ratio?
10. Define Investment Fluctuation Reserve.
11. A and B are sharing profits and losses equally. With effect from 1st April, 2019, they
agree to share profits in the ratio of 4 : 3. Calculate the individual partner's gain or
sacrifice due to the change in ratio.
12. X,Y and Z share profits as 5 : 3 : 2. They decide to share their future profits as 4 : 3 : 3
with effect from April 1, 2019,. On this date the following revaluations have taken
place:
Book Value (Rs.) Revised Value (Rs.)
Investments 22,000 25,000
Plant and Machinery 25,000 20,000
Land and Building 40,000 50,000
Outstanding Expenses 5,600 6,000
Sundry Debtors 60,000 50,000
Trade Creditors 70,000 60,000
Pass necessary adjustment entry to be made because of the above changes in the
values of assets and liabilities. However old values will continue in the books.
13. X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They decided to
share future profits equally. On the date of change in the profit-sharing ratio, the
Profit and Loss Account showed a debit balance of Rs 50,000. Pass the necessary
Journal entry for the distribution of the balance in the Profit and Loss Account
2 / 10
immediately before the change in the profit-sharing ratio.
14. Anant, Gulab and Khushbu were partners in a firm sharing profits in the ratio of 5 : 3 :
2. From 1st April, 2014, they decided to share the profits equally. For this purpose, the
goodwill of the firm was valued at 2,40,000.
Pass necessary journal entry for the treatment of goodwill on change in the profit
sharing ratio of Anant, Gulab and Khushbu.
15. Ram, Shyam and Hari were in partnership sharing profits in the ratio of 3 : 2 : 1. The
Balance Sheet as at 31.3.2013 was as follows :
BALANCE SHEET
as at 31.3.2013
Liabilities (Rs) Assets (Rs)
Bills Payable 20,000 Cash 40,000
Creditors 20,000 Bills Receivable 5,000
General Reserve 30,000 Debtors 15,000
Capitals Stock 50,000
Ram 50,000 Furniture 20,000
Shyam 30,000 Machinery 30,000
Hari 25,000 1,05,000 Goodwill 15,000
1,75,000 1,75,000
On 1.4.2013 partners decided to share profits equally. For this purpose it was further
agreed that.
1. Goodwill of the firm should be valued at Rs 30,000.
2. Furniture and Machinery is to be revalued at Rs 25,000 and Rs 35,000 respectively.
3. Value of Stock is to be reduced by Rs 4,000.
You are required to give necessary journal entries to give effect to the above
arrangement and prepare Revaluation Account, Partners’ Capital Accounts and
Balance Sheet of the firm after reconstitution.
3 / 10