Question : P, R and A are partners sharing profit and losses in the ratio of 1:1:1. A retired on 1st April, 2021. P and R decided to continue the business share profit in the ratio of 3: 2. They also decided to give effect to the change In value of assets and liabilities without changing their book value Profit on revaluation is Rs 1,35,000. Adjustment entry will be:
Option 1: Debited revaluation account Rs 1,35,000 and credited old partners capital account by Rs 1,35,000
Option 2: Debited P's capital account by Rs 36,000 and debited R's capital account by Rs 9,000 and credited A's capital account by Rs 45,000
Option 3: Old partner's capital account debited and credited revaluation account by Rs 1,35,000
Option 4: Credited P's capital account by Rs 36,000 and credited R's capital account by Rs 9,000 and debited A's capital account by Rs 45,000
Correct Answer: Debited P's capital account by Rs 36,000 and debited R's capital account by Rs 9,000 and credited A's capital account by Rs 45,000
Solution : Answer = Debited P's capital account by Rs 36,000 and debited R's capital account by Rs 9,000 and credited A's capital account by Rs 45,000
P = $\frac{3}{5}-\frac{1}{3} = \frac{9-5}{15} = \frac{4}{15}\times 1,35,000 = 36,000$
R = $\frac{2}{5}-\frac{1}{3} = \frac{6-5}{15} = \frac{1}{15}\times 1,35,000 = 9,000$
P's Capital A/c Dr 36000
R's Capital A/c Dr 9000
To A's Capital A/c 45000 Hence, the correct option is 2.
Question : An old computer completely written off was sold for Rs. 2,000 as scrap. Choose the correct Journal entry
Option 1: Computer account debited by Rs 2,000 and credited revaluation account Rs 2,000
Option 2: Revaluation account debited by Rs 2,000 and credited computer account Rs 2,000
Option 3: Debited bank account by Rs 2,000 and credited revaluation account by Rs 2,000
Option 4: debited revaluation account Rs 2,000 and credited bank account by Rs 2,000
Question : Realization expenses of Rs. 5,000 were to be borne by Pavit, a partner. However, it was paid by Hitesh, another partner. It was to be recorded in the books. The entry will be
Option 1: Debited realisation account Rs 5,000, credited Pavit's capital account Rs 5,000
Option 2: Debited realisation account Rs 5,000, credited Bank account Rs 5,000
Option 3: Debited realisation account Rs 5,000 and credited Hitesh's capital account Rs 5,000
Option 4: Debited Pavit's capital account and credited Hitesh's capital account Rs 5,000
Question : M, N and O are partners in a firm sharing profits in the ratio of 3: 2: 1. Goodwill has been valued at Rs. 60,000. On N's retirement M and O agree to share profits equally. Amount credited to M's capital account will be:
Option 1: Credited M's capital account by Rs 10,000
Option 2: Debited M's capital account by Rs 10,000
Option 3: Credited M's capital account by Rs 20,000
Option 4: None of the above
Question : A and B are partners sharing profit in the ratio of 5:4. They admitted C in the firm for 1/3rd profit which he takes 2/9th share from A and 1/9th share from B and brings Rs 1500 as premium. Choose the necessary journal entries on c's admission.
Option 1: Debited cash a/c Rs 1500, credited C's capital account Rs 1500
Option 2: Debited cash account Rs 1500 and credited premium for goodwill account Rs 1500
Option 3: Debited premium for Goodwill account Rs 1500 and Credited A's capital account with Rs 1000 and B's capital account with Rs 500
Option 4: Both 2 and 3
Question : C's Capital Account has a credit balance of Rs.2,00,000; C's Loan Account is showing a debit balance of Rs.40,000. Bank Balance is Rs.3,00,000. Show the treatment of C's Loan Account.
Option 1: Debited C's capital Rs 40,000 and credited C's Loan account Rs 40,000
Option 2: Debited C's capital Rs 1,60,000 and credited C's loan Rs 1,60,000
Option 3: Credited C's capital Rs 40,000 and debited C's loan Rs 40,000
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