Page 430 - AAAXII

Model Test Papers M.411

(a) the Goodwill of the firm be valued at ` 1,80,000.
(b) Creditors amounting to ` 2,400 were not likely to be claimed.
(c) the Machinery (having book value of ` 3,00,000) be reduced by 6%.
(d) Unrecorded Investments to be valued at ` 1,35,600.
(e) the Land (having book value of ` 3,00,000) be valued at ` 4,80,000.
Give the necessary adjustment entry to record the above arrangement. (4)

13. (a) A and B are partners sharing profits in the ratio of 3 : 2. C is admitted as a new
partner. A sacrificed 1/6th of his share and B sacrificed 1/8 from his share. Find
new profit-sharing ratio and sacrificing ratio.
(b) Arjun, Bhim and Nakul are partners sharing profits and losses in the ratio of
14 : 5 : 6 respectively. Bhim retires and surrenders his share in favour of Arjun.
Goodwill of the firm is valued at 2 years’ purchase of super profits based on
average profits of last 3 years. Profits for the last 3 years are ` 50,000, ` 55,000 and
` 60,000 respectively. The normal profits for the similar firm are ` 30,000. Goodwill
already appears in the books of the firm at ` 75,000. The profit for the first year
after Bhim’s retirement was ` 1,00,000.
Give necessary Journal entries to adjust Goodwill and distribute profits showing
your workings. (3 + 3)

14. Following is the Receipts and Payments Account of Delhi Football Club for the year
ended 31st March, 2018:
Dr. RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March, 2018 Cr.
Receipts ` Payments `
To Balance b/d: Cash at Bank 1,800 By Building 40,000
To Donations 50,000 By Match Expenses 9,000
To Life Membership Fees 4,000 By Furniture 12,100
To Match Fund 8,000 By Investments 16,000
To Subscription 5,200 (Purchased on 1.7. 2017 @ 10% p.a.)
To Lockers Rent 400 By Salaries 7,000
To Interest on Investments 1,000 By Insurance 350
To Sale of Furniture (Book value ` 8,000) 10,000 By Sundry Expenses 470
To Entrance Fees 5,000 By Balance c/d: Cash at Bank 480
85,400 85,400
Additional Information:
(i) During the year 2017–18, the Club had 550 members and each paying an annual
subscription of ` 10.
(ii) Donations includes 90% towards Building Fund.
(iii) Salaries outstanding as on 1st April, 2017 was ` 1,000 and as on 31st March,
2018 was ` 500.
(iv) Capital Fund as on 1st April, 2017: ` 800.
Prepare Income and Expenditure Account of the Club for the year ending 31st March,
2018 and Balance Sheet as on that date. (6)