Case Based MCQs of Change in Profit Sharing Ratio Class 12 with Answers

Case Based MCQs of Change in Profit Sharing Ratio Class 12 with Answers

A, B and C are partners sharing profits and losses in the ratio of 5 : 3 : 2. A was unable to devote time to business due to his other commitments. Hence adjustments were required in the agreed terms of partnership. They decided to share future profits in the ratio of 2 : 5 : 3.

Following balances appeared in their books:

	₹
Advertisement Suspense A/c (Dr.)	15,000
Workmen Compensation Reserve	90,000
Investment Fluctuation Reserve	60,000
Investment at Cost	5,00,000

It was agreed that:

(i) Goodwill should be valued at three year’s purchase of super profits. Firm’s average profits are ₹ 1,00,000. Capital invested in the business is ₹ 8,00,000 and normal rate of return is 10%.

(ii) Claim on account of Workmen’s Compensation has been estimated at ₹ 80,000.

Based on the above information, choose the correct option:

(i) In respect of goodwill:

(A) Credit A by ₹ 30,000; B by ₹ 18,000 and C by ₹ 12,000
(B) Credit A by ₹ 12,000; B by ₹ 30,000 and C by ₹ 18,000
(C) Credit A by ₹ 18,000; Debit By by ₹ 12,000 and C by ₹ 6,000
(D) Debit A by ₹ 18,000; Credit B by ₹ 12,000 and C by ₹ 6,000

Ans – (C)

(ii) In respect of Advertisement Suspense Account:

(A) Will be written off in new ratio
(B) will be carried forward in the books
(C) Will be adjusted in sacrificing/gaining ratio
(D) Will be written off in old ratio

Ans – (D)

(iii) In respect of Workmen Compensation:

(A) Cr. A by ₹ 5,000; B by ₹ 3,000 and C by ₹ 2,000
(B) Cr. A by ₹ 2,000; B by ₹ 5,000 and C by ₹ 3,000
(C) Cr. A by ₹ 3,000; Dr. B by ₹ 2,000; Dr. C by ₹ 1,000
(D) Dr. A by ₹ 3,000; Cr. B by ₹ 2,000; Cr. C by ₹ 1,000

Ans – (A)

(iv) If Investments are valued at ₹ 4,00,000, then in respect of investments:

(A) Debit A by ₹ 50,000; B by ₹ 30,000 and C by ₹ 20,000
(B) Debit A by ₹ 20,000; B by ₹ 12,000 and C by ₹ 8,000
(C) Debit A by ₹ 8,000; B by ₹ 20,000 and C by ₹ 12,000
(D) Debit B by ₹ 8,000; C by ₹ 4,000 and Credit A by ₹ 12,000

Ans – (B)

A and B were partners sharing profits equally. Since A was devoting more time to the business it was agreed that profit sharing ratio will be changed to 2 : 1 from 1st April, 2022.

Following balances have been extracted from their books on this date:

	₹
Capitals: A B	5,00,000 3,00,000
General Reserve	90,000
Profit & Loss Account (Dr.)	30,000

It is agreed between the partners that:

(i) Goodwill should be valued at ₹ 1,20,000.

(ii) Profit & Loss Account (Dr.) balance is to be carried forward.

(iii) Furniture (Book Value ₹ 50,000) be reduced to ₹ 30,000.

(iv) Computers (Book Value ₹ 1,00,000) be reduced by ₹ 60,000.

Based on the above information, choose the correct option:

(i) In respect of Profit & Loss (Dr.) Balance;

(A) Dr. A and B by ₹ 15,000 each
(B) Dr. a by ₹ 20,000 and B by ₹ 10,000
(C) Dr. A by ₹ 5,000 and Cr. B by ₹ 5,000
(D) Cr. A by ₹ 5,000 and Dr. B by ₹ 5,000

Ans – (D)

(ii) Loss on Revaluation will be:

(A) ₹ 90,000
(B) ₹ 60,000
(C) ₹ 80,000
(d) ₹ 70,000

Ans – (C)

(iii) In respect of goodwill:

(A) Cr. A and B by ₹ 60,000 each
(B) Cr. A by ₹ 40,000 and B by ₹ 20,000
(C) Dr. A by ₹ 20,000; Cr. B by ₹ 20,000
(D) Cr. A by ₹ 20,000; Dr. B by ₹ 20,000

Ans – (C)

(iv) Balance of A’s Capital Account will be:

(A) ₹ 4,45,000
(B) ₹ 4,90,000
(C) ₹ 4,80,000
(D) ₹ 5,30,000

Ans – (B)

P, Q and R are partners in a firm sharing profits in the ratio of 3 : 3 : 2. From 1st April 2024, they decided to share profits equally. On that date following balances appeared in their books:

	₹
Workmen Compensation Reserve	72,000
Investment Fluctuation Reserve	30,000
Investments (at cost)	6,00,000

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

If a Claim on account of Workmen’s Compensation is estimated at ₹ 48,000, then in respect of Workmen Compensation:

(A) Credit P, Q and R by ₹ 8,000 each

(A) Credit P, Q and R by ₹ 8,000 each
(B) Debit P, Q and R by ₹ 8,000 each
(C) Debit R by ₹ 2,000 and Credit P and Q by ₹ 1,000 each
(D) Credit P by ₹ 9,000, Q by ₹ 9,000 and R by ₹ 6,000

Ans – (D)

If investments are valued at ₹ 4,50,000, then in respect of investmnets:

(A) Debit P, Q and R by ₹ 50,000 each
(B) Debit P, Q and R by ₹ 40,000 each
(C) Debit P by ₹ 45,000; Q by ₹ 45,000 and R by ₹ 30,000
(D) Debit P by ₹ 56,250; Q by ₹ 56,250 and R by ₹ 37,500

Ans – (C)

If goodwill of the firm is valued at ₹ 2,40,000, then in respect of goodwill:

(A) Credit P by ₹ 90,000; Q by ₹ 90,000 and R by ₹ 60,000
(B) Credit P, Q and R by ₹ 80,000 each
(C) Debit R by ₹ 20,000 and Credit P and Q by ₹ 10,000 each
(D) Debit P and Q by ₹ 10,000 each and Credit R by ₹ 20,000

Ans – (C)

Aarushi and Gauri are partners in a firm, sharing profits and losses in the ratio of 3 : 2. On 31st March, 2024, their Balance Sheet was as under:

The partners decided that with effect from 1st April, 2024, they would share profits and losses equally.

You are required to answer the following alternate questions:

If investments are valued at ₹ 1,70,000, then:

(A) Credit Arushi and Gauri by ₹ 10,000 each
(B) Debit Aarushi and Gauri by ₹ 15,000 each
(C) Credit Aarushi by ₹ 12,000 and Gauri by ₹ 8,000
(D) Debit Aarushi by ₹ 18,000 and Gauri by ₹ 12,000

Ans – (C)

If Goodwill is valued at ₹ 1,00,000, then:

(A) Debit Aarushi by ₹ 10,000 and Credit Gauri by ₹ 10,000
(B) Debit Gauri by ₹ 10,000 and Credit Aarushi by ₹ 10,000
(C) Credit Aarushi by ₹ 60,000 and Gauri by ₹ 40,000
(D) Credit Aarushi and Gauri by ₹ 50,000 each

Ans – (B)

If General Reserve appearing in the Balanc esheeet at ₹ 60,000 is not to be distributed, then:

(A) Credit Aarushi and Gauri by ₹ 30,000 each
(B) Debit Gauri by ₹ 6,000 and Credit Aarushi by ₹ 6,000
(C) Debit Aarushi by ₹ 6,000 and Credit Gauri by ₹ 6,000
(D) Credit Aarushi by ₹ 36,000 and Gauri by ₹ 24,000

Ans – (B)