UNIT TEST 1, JUNE 2023

SUBJECT: ACCOUNTANCY (055)

Grade: 12 Time: 3 hours

Date: 05/06/2023 Max. Marks: 80

General Instructions:
i. This question paper contains 34 questions. All questions are compulsory.
ii. Question Nos.1 to 20 carries 1 mark each.
iii. Questions Nos. 21 to 26 carries 3 marks each.
iv. Questions Nos. from 27 to 29 carries 4 marks each
v. Questions Nos. from 30 to 34 carries 6 marks each

1 Adil, Bhavya, and Chris are partners sharing profits in the ratio of 5:4:1. Chris is 1
given a guarantee that his share of profit in any year will not be less than ₹ 5,000.
The deficiency in the profit share of Chris will be borne by Bhavya. The Journal
entry to record for deficiency met by Bhavya is given below:
Date Particulars L.F Dr Cr
Bhavya’s Capital A/c Dr. 1,000
To Chris’s Capital A/c 1,000
(Deficiency met be Bhavya)

Profit earned during the year was

a) ₹ 30,000
b) ₹ 35,000
c) ₹ 40,000
d) ₹ 50,000

2 Average profit of a firm during the last few years is ₹ 1,50,000. In similar business, 1
the normal rate of return is 10% of the capital employed. Calculate the value of
goodwill by capitalisation of super profit method if super profits of the firm are ₹
50,000.
a) 5,00,000
b) 5,000
c) 15,000
d) 3,50,000

3 Girdhar, a partner withdrew ₹ 5,000 in the beginning of each quarter and interest 1
on drawings was calculated as 1,500 at the end of accounting year 31 March 2022

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 What is the rate of interest on drawings charged?
a) 6% p.a.
b) 8% p.a.
c) 10% p.a.
d) 12% p.a.
OR

A, B and C are partners, their partnership deed provides for interest on drawings at
8% per annum. B withdrew a fixed amount in the middle of every month and his
interest on drawings amounted to ₹4,800 at the end of the year. What was the
amount of his monthly drawings?
a) ₹10,000.
b) ₹5,000.
c) ₹1,20,000.
d) ₹48,000.

4 Gain / loss on revaluation at the time of change in profit sharing ratio of existing 1
partners is shared by ___(i)______ whereas in case of admission of a partner it is
shared by____(ii)_____.
a) Remaining Partners, (ii) All Partners.
b) All Partners, (ii) Old partners.
c) New Partner, (ii) All partner.
d) (i) Sacrificing Partner, (ii) Incoming partner.
OR
At the time of reconstitution of a partnership firm, recording of an unrecorded
liability will lead to:
a) Gain to the existing partners
b) Loss to the existing partners
c) Neither gain nor loss to the existing partners
d) Gain to all the partners

5 Pick the odd one out of the following: 1

(a) Rent to partner.
(b) Manager’s Commission.
(c) Interest on Partner’s Loan.
(d) Interest on Partner’s capital.

6 At the time of admission of a partner, what will be the effect of the following 1
information? Balance in Workmen compensation reserve ₹40,000. Claim for
workmen compensation ₹15,000.
a) ₹25,000 Credited to the Partner’s capital Accounts.
b) ₹15,000 Debited to Revaluation Account.
c) ₹40,000 Credited to the Partner’s capital Accounts.
d) ₹15,000 Credited to Revaluation Account.
OR
Revaluation of investments at the time of reconstitution is necessary, because their
present value may be different from their:
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 a) Market Value.
b) Net Value.
c) Cost of Asset
d) Book Value.

7 Amit, Bimal and Chaman are partners sharing profits and losses equally. Amit and 1
Chaman gave loans to the firm on 1st October, 2019 of ₹1,00,000 and ₹1,50,000
respectively. It is agreed that interest @ 9% p.a. will be paid on loan. Books of
account of the firm are closed on 31st March every year. Interest on loan is yet to
be paid as on 31st March, 2020. Choose the correct Journal entry for Interest on
loan.

a) Interest on Loan by Partners A/c ...Dr. 22,500

To Loan by Amit A/c 9,000
To Loan by Chaman A/c 13,500

b) Interest on Loan by Partners A/c ...Dr. 11,250

To Loan by Amit A/c 4,500
To Loan by Chaman A/c 6,750

c) Loan by Amit A/c Dr. 4,500

Loan by Chaman A/c Dr. 6,750
To Interest on Loan by Partners A/c 11,250

d) Loan by Amit A/c Dr 9,000

Loan by Chaman A/c Dr 13,500
To Interest on Loan by Partners A/c ...Dr. 22,500

8 Kalki and Kumud were partners sharing profits and losses in the ratio of 5:3. On 1st 1
April,2021 they admitted Kaushtubh as a new partner and new ratio was decided as
3:2:1. Goodwill of the firm was valued as ₹3,60,000. Kaushtubh couldn’t bring any
amount for goodwill. Amount of goodwill share to be credited to Kalki and Kumud
Account’s will be: -
a) ₹ 37,500 and ₹22,500 respectively
b) ₹ 30,000 and ₹30,000 respectively
c) ₹ 36,000 and ₹24,000 respectively
d) ₹ 45,000 and ₹15,000 respectively
OR
Sarvesh, Sriniketan and Srinivas are partners in the ratio of 5:3: 2. If Sriniketan’s
share of profit at the end of the year amounted to ₹1,50,000, what will be Sarvesh’s
share of profits?
a) ₹5,00,000.
b) ₹1,50,000.
c) ₹3,00,000.
d) ₹2,50,000.

9 E, F and G are partners sharing profits in the ratio of 3:3:2. According to the 1
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 partnership agreement, G is to get a minimum amount of ₹80,000 as his share of
profits every year and any deficiency on this account is to be personally borne by E.
The net profit for the year ended 31st March 2021 amounted to ₹3,12 ,000.
Calculate the amount of deficiency to be borne by E?
a) ₹1,000
b) ₹4,000
c) ₹8,000
d) ₹2,000

10 A& B are partners sharing profits and losses in the ratio of 3:2. C is admitted for ¼ 1
share and for which ₹30,000 and ₹10,000 are credited as a premium for goodwill
to A and B respectively. The new profit-sharing ratio of A:B:C will be:
a) 3:2:1
b) 12:8:5
c) 9:6:5
d) 33:27:20

11 At the time of admission of new partner Vasu, Old partners Paresh and Prabhav had 1
debtors of ₹6,20,000 and a provision for doubtful debts of ₹20,000 in their books.
As per terms of admission, assets were revalued, and it was found that debtors
worth ₹15,000 had turned bad, and hence should be written off. Which journal
entry reflects the correct accounting treatment of the above situation.
a Bad Debts A/c Dr. 15,000
To Sundry Debtors 15,000
Provision for Doubtful Debts A/c Dr. 15,000
To Bad Debts A/c 15,000

b Bad Debt A/c Dr. 15,000

To Sundry Debtors 15,000
Revaluation A/c Dr. 15,000
To Provision for Doubtful Debts A/c 15,000
c Revaluation A/c Dr. 15,000
To Sundry Debtors A/c 15,000
d Bad Debt A/c Dr. 15,000
To Revaluation A/c 15,000

12 Given below are two statements, one labelled as Assertion (A) and the other 1
labelled as Reason (R):
Assertion (A): Revaluation A/c is prepared at the time of Admission of a partner.
Reason (R): It is required to adjust the values of assets and liabilities at the time of
admission of a partner, so that the true financial position of the firm is reflected.
In the context of the above two statements, which of the following is correct?
Codes:
a) (A) Both (A) and (R) are correct and (R) is the correct reason of (A).
b) (B) Both (A) and (R) are correct but (R) is not the correct reason of (A).
c) (C) Only (R) is correct.
d) (D) Both (A) and (R) are wrong.
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13 X and Y are partners in a firm. X is to get commission of 10% of net profit before 1
charging any commission. Y is to get a commission of 10% on net profit after
charging all commissions. Net Profit for the year ended 31st March, 2020 was ₹
55,000. Calculate Y commission.
a) 5,500
b) 4,500
c) 4,000
d) 5,000

14 A and B are partners in the ratio of 3:2. C is admitted as a partner and he takes ¼ th 1
of his share from A. B gives 3/16 from his share to C. What is the share of C?
a) 1/4
b) 1/16
c) 1/6
d) 1/16

15 A, B and C were partners in a firm sharing profits and losses in the ratio of ½: 1/3: 1
1/6. D was admitted in the firm for 1/6 th share. C would retain his original share.
Calculate the new profit-sharing ratio.
a) 5:5:8:12
b) 12:8:5:5
c) 12:5:8:5
d) 12:5:5:8
OR
X and Y were partners in a firm sharing profits in the ratio of 7: 3. Z was admitted
for 1/5th share in the profits which he took 75% from X and remaining from Y.
Calculate the sacrificing ratio of X and Y.
a) 7:3
b) 3:7
c) 3:1
d) 1:3

16 Vidit and Seema were partners in a firm sharing profits and losses in the ratio of 1
3: 2. Their capital was ₹ 1,20,000 and ₹ 2,40,000, respectively. They were entitled
to interest on capital @ 10% p.a. The firm earned a profit of ₹ 18,000 during the
year. The interest on Vidit’s capital will be:
a) ₹ 12,000
b) ₹ 10,800
c) ₹ 7,200
d) ₹ 6,000

17 When goodwill existing in the books is written off at the time of admission of a 1
partner, it is transferred partners’ capital account in their:
a) Old profit-sharing ratio
b) New profit-sharing ratio
c) Sacrificing ratio
d) Gaining ratio
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 OR
In a firm, general reserve at the time of admission of a partner was to continue to
appear in the books of the reconstituted firm at its original value. What would be
the accounting treatment?
a) Dr General reserve and Cr all partners
b) Dr all partners and Cr General reserve
c) Dr General reserve and Cr old partners
d) Dr new partner and Cr old partners

18 Pawan, manager of the firm, is admitted as partner w.e.f 1st April 2022 to manage 1
the business. The salary paid to him during the year ended 31st March 2023 will be
a) transferred to the debit of Pawan’s Capital Account
b) transferred to the debit of Pawan’s Current Account
c) transferred to the debit of the Profit and Loss Account
d) transferred to the debit of the Profit and Loss Appropriation Account.

19 P and Q are partners in a firm having capitals of Rs 15,000 each. R is admitted for 1
1/3rd share for which he has to bring ₹ 20,000 for his share of capital. The amount
of goodwill will be
a) 8,000
b) 10,000
c) 9,000
d) 11,000
OR
Sun and Star were partners in a firm sharing profits in the ratio of 2:1. Moon was
admitted as a new partner in the firm. New profit-sharing ratio was 3:3:2. Moon
brought the following assets towards his share of goodwill and his capital:
Machinery 2,00,000
Furniture 1,20,000
Stock 80,000
Cash 50,000
If his capital is considered as₹3,80,000 the goodwill of the firm will be:
a) 70,000
b) 2,80,000
c) 4,50,000
d) 1,40,000

20 Assertion (A):- Commission provided to partner is shown in Profit and Loss a/c 1
Reason (R):- Commission provided to partner is charge against profits and is to be
provided at fixed rate.

a) (A) is correct but (R) is wrong

b) Both (A) and (R) are correct, but (R) is not the correct explanation of (A)
c) Both (A) and (R) are incorrect.
d) Both (A) and (R) are correct, and (R) is. the correct explanation of (A)

21 Chand and Pooja are partners in the firm sharing profit and losses in the ratio of 3
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 6:4. They decided to admit Minu as the new partner in the firm and decided to
share future profit in the ratio 4:3:3. On the date of admission, the Balance Sheet
showed Investment Fluctuation Fund of ₹5,500 on the liabilities side and
Investment of ₹15,000(at cost) on the assets side. The market value of
investments on the date of the Balance Sheet was ₹20,500. Pass necessary journal
entries for the same.

22 X and Y started business on 1st April, 2019 with capitals of ₹ 5,00,000 each. As per 3
the Partnership Deed, both X and Y are to get monthly salary of ₹10,000 each and
interest on capitals is ₹ 50,000 each. Interest on Drawings are: X— ₹ 3,000 and Y
—₹ 5,000.
During the year, the firm incurred a loss of ₹ 2,00,000.
Pass Journal entries for the above. The firm closes its accounts on 31st March,
every year.
OR
Arun, Shobha and Yuvraj were partners in a firm. On 1st April, 2018 their Fixed
Capitals Stood at ₹ 1,00,000, ₹ 50,000 and ₹ 50,000 respectively.
As per the provisions of partnership deed,
(i) Partners were entitled to an annual salary of ₹ 20,000 each.
(ii) Interest on Capital @ 10% p.a. was to be provided.
(iii) Profits were to be shared in the ratio 3: 1: 1. Net profit for the year ended 31st
March, 2019 was ₹ 90,000.
Pass Journal Entries for the above in the books of the firm.

23 Anubhav, Shagun and Pulkit are partners in a firm sharing profits and losses in the 3
ratio of 2:2:1. On 1st April 2021, they decided to change their profit-sharing ratio to
5:3:2. On that date, debit balance of Profit & Loss A/c ₹30,000 appeared in the
balance sheet and partners decided to pass an adjusting entry for it. Show your
workings clearly.

24 Atul and Bhaskar are partners sharing profits in the ratio of 2: 3. Their capitals are 3
₹ 4,00,000 and ₹ 2,00,000 respectively. Interest is to be allowed on capitals @ 6%
p.a. Profit before allowing interest on capitals is ₹ 30,000.
Prepare Profit and Loss Appropriation Account to distribute profit or loss, if
interest on capitals is a charge.
OR
Arman and Boman are partners sharing profits equally. Business is being carried
from the property owned by Aman on a yearly rent for ₹ 24,000. Aman is to get a
salary of ₹ 1,20,000 p.a and Boman is to get commission @ 5% of net sales, which
during the year was ₹ 30,00,000. Profit for the year ended 31st march 2019 before
providing for rent was ₹ 5,00,000. Prepare Profit and Loss Appropriation Account
for the year ended 31st March 2019.

25 Goodwill of a firm is valued at ₹ 1,20,000. Their Average Profit is ₹ 60,000 and 3

Normal Rate of Return is 10% on the Capital Employed ₹ 4,80,000. Calculate the
capitalized value of the goodwill of the firm by the two capitalized methods.

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26 Angle and Circle were partners in a firm. Their Balance Sheet showed Furniture at 3
₹2,00,000; Stock at ₹1,40,000; Debtors at ₹1,62,000 and Creditors at ₹60,000.
Square was admitted and new profit-sharing ratio was agreed at 2:3:5. Stock was
revalued at ₹1,00,000, Creditors of ₹15,000 are not likely to be claimed, Debtors
for ₹2,000 have become irrecoverable and Provision for doubtful debts to be
provided @ 10%. Angle’s share in loss on revaluation amounted to ₹30,000.
Prepare Revaluation a/c on the admission of Square and find out by what amount
furniture has been revalued.

27 Puneet and Akshara were partners in a firm sharing profits and losses in the ratio of 4
2:3. The following was the balance sheet of the firm as on 31st March, 2019.
Balance sheet of Puneet and Akshara as on 31st March, 2019.
Liabilities ₹ Assets ₹
Capitals: Sundry Assets 2,00,000
Puneet 90,000
Akshara 1,10,000 2,00,000
2,00,000 2,00,000
The profits ₹ 40,000 for the year ended 31st March, 2019 were divided between the
partners without allowing interest on capital @ 5% p.a. and commission to Akshara
@ ₹ 1,000 per quarter.
The drawings of the partners during the year were:
Puneet ₹ 2,500 per month.
Akshara ₹ 10,000 per quarter.
Showing your workings clearly, pass necessary adjustment entry in the books of the
firm.

28 Veena and Somesh were partners in a firm with capitals of ₹ 1,00,000 and ₹ 4
80,000 respectively. They admitted Nisha on 1st April, 2019 as a new partner for
1/4th share in the future profits of the firm. Nisha brought ₹ 90,000 as her capital.
Nisha acquired her share as 1/12th from Veena and the remaining from Somesh.
Calculate the value of goodwill of the firm and pass the necessary journal entries on
Nisha’s admission.

29 X, Y and Z are partners in a firm sharing profits and losses in the ratio of 3:2:1. Z 4
retires from the firm on 31st March, 2021. Goodwill of the firm was valued at
₹120,000. On the date of Z's retirement, the following balances appeared in the
books of the firm:
General Reserve ₹1,80,000
Profit and Loss Account (Dr.) ₹ 30,000
Workmen Compensation Reserve ₹ 24,000. There was a claim of 27,000
from the workmen compensation reserve
Employees' Provident Fund ₹ 20,000.
Pass necessary Journal entries for the adjustment of these items on Z's retirement.

30 Geet and Meet are partners in a firm. They admit Jeet into partnership for equal 6
share. It was agreed that goodwill will be valued at three years' purchase of average
profit of last five years. Profits for the last five years were:
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 Year 31st 31st 31st 31st 31st
Ended March, March, March, March, March,
2015 2016 2017 2018 2019
Profits 90,000 1,60,000 1,50,000 65,000 1,77,000
(₹) (Loss)
Books of Account of the firm revealed that:
(i) The firm had gain (profit) of ₹ 50,000 from sale of machinery sold in the year
ended 31st March, 2016. The gain (profit) was credited in Profit and Loss Account.
(ii) There was an abnormal loss of ₹ 20,000 incurred in the year ended 31st March,
2017 because of a machine becoming obsolete in accident.
(iii) Overhauling cost of second-hand machinery purchased on 1st July, 2017
amounting to ₹ 1,00,000 was debited to Repairs Account. Depreciation is charged
@ 20% p.a. on Written Down Value Method.
Calculate the value of goodwill.
OR
Calculate goodwill of a firm on the basis of three years purchases of the Weighted
Average Profits of the last four years. The profits of the last four years were:
Years (ending 31st march) 2020 2021 2022 2023
Amount 28,000 27,000 46,900 53,810
a) On 1st April, 2020 a major plant repair was undertaken for ₹10,000 which was
charged to revenue. The said sum is to be capitalized for goodwill calculation
subject to adjustment of depreciation of 10% on reducing balance method.
b) For the purpose of calculating Goodwill the company decided that the years
ending 31.03.2020 and 31.03.2021 be weighted as 1 each (being COVID affected)
and for year ending 31.03.2022 and 31.03.2023 weights be taken as 2 and 3
respectively.

31 X, Y and Z are partners sharing profits and losses in the ratio of 7: 5: 4. Their Balance 6
Sheet as at 31st March, 2018 stood as:
Liabilities ₹ Assets ₹
Capitals X 210,000 Sundry Assets 7,00,000
Y 150,000
Z 120,000
General Reserve 65,000
Profit and Loss A/c 25,000
Creditors 130,000
7,00,000 7,00,000
Partners decided that with effect from 1st April, 2018, they will share profits and losses
in the ratio of 3: 2: 1. For this purpose, goodwill of the firm was valued at ₹ 1,50,000.
The partners neither want to record the goodwill nor want to distribute the General
Reserve and profits.
Pass an adjustment entry and prepare balance sheet of the reconstituted firm.

32 Moli, Bhola and Raj were partners in a firm sharing profits and losses in the ratio of 6
3: 3: 4. Their partnership deed provided for the following:
(i) Interest on capital @ 5% p.a.
(ii) Interest on drawing @ 12% p.a.
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 (iii) Interest on partners’ loan @ 6% p.a.
(iv) Moli was allowed an annual salary of ₹ 4,000; Bhola was allowed a
commission of 10% of net profit as shown by Profit and Loss Account and Raj was
guaranteed a profit of ₹1,50,000 after making all the adjustments as provided in the
partnership agreement.
Their fixed capitals were Moli: ₹5,00,000; Bhola: ₹ 8,00,000 and Raj: ₹ 4,00,000.
On 1st April, 2016 Bhola extended a loan of ₹ 1,00,000 to the firm. The net profit
of the firm for the year ended 31st March, 2017 before interest on Bhola’s loan was
₹ 3,06,000.
Prepare Profit and Loss Appropriation Account of Moli, Bhola and Raj for the year
ended 31st March, 2017 assuming that Bhola withdrew ₹5,000 at the end of each
month, Moli withdrew ₹ 10,000 at the end of each quarter and Raj withdrew ₹
40,000 at the end of each half year.

33 Ravi, Mohan and Pandey were partners in a firm sharing profits and losses in the 6
ratio of 7: 8: 9. On 31st March, 2022, their Balance Sheet was as follows:
Balance Sheet of Ravi, Mohan and Pandey as at 31st March, 2022
Liabilities ₹ Assets ₹
Creditors 1,41,000 Bank 27,000
General Reserve 24,000 Stock 91,000
Capitals: Debtors 2,10,000
Ravi 3,00,000 Less : Provision for
Mohan 4,00,000 doubtful debts 10,000 2,00,000
Pandey 8,43,000 15,43,000 Machinery 3,00,000
Land and Building 10,00,000
Profit and Loss Account 90,000
(Loss of 2021 -22)
17,08,000 17,08,000
On 31st March, 2022, Mohan retired from the firm on the following terms:
a) Goodwill of the firm was valued at ₹ 4,80,000.
b) Mohan’s share of goodwill will be credited to his capital account without
opening goodwill account.
c) Debtors of ₹ 10,000 will be written off and a provision of 10% for bad and
doubtful debts will be created on debtors.
d) Machinery will be depreciated by 10% and land and building will be
appreciated by 5%.
e) The balance in Mohan’s Capital Account will be transferred to his loan
account.
Prepare Revaluation Account and Mohan’s Capital Account on Mohan’s
retirement, in the books of the firm.

34 Madhuri and Arsh were partners in a firm sharing profits and losses in the ratio of 6
3: 1. Their Balance Sheet as at 31st March, 2019, was as follows:
Balance Sheet of Madhuri and Arsh as at 31st March, 2019
Liabilities ₹ Assets ₹
Capitals: Machinery 4,70,000
Madhuri 3.00,000 Investments 1,10,000
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 Arsh 2,00,000 5,00,000 Debtors 1,20,000
Workmen’s Less: Provision for
Compensation Fund 60,000 doubtful debts 10,000 1,10,000
Creditors 1,90,000 Stock 1,40.000
Employees Provident Fund 1,10,000 Cash 30,000

8,60,000 8,60,000
th
On 1st April, 2019, they admitted Jyoti into partnership for 1/4 share in the profits
of the firm. Jyoti brought proportionate capital and ₹ 40,000 as her share of
goodwill premium.
The following terms were agreed upon:
(i) Provision for doubtful debts was to be maintained at 10% on debtors.
(ii) Stock was undervalued by ₹ 10,000.
(iii) An old customer whose account was written off as bad, paid ₹ 15,000.
(iv) 20% of the investments were taken over by Arsh at book value.
(v) Claim on account of workmen’s compensation amounted to ₹ 70,000.
(vi) Creditors included a sum of ₹ 27,000 which was not likely to be claimed.
Prepare Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm
with the given Revaluation profit ₹40,000.
OR
Badal and Bijli were partners in a firm sharing profits in the ratio of 3: 2. Their
Balance Sheet as at 31st March, 2019 was as follows:
Balance Sheet of Badal and Bijli as at 31st March, 2019
Liabilities ₹ Assets ₹
Capitals: Building 1,50,000
Badal 1,50,000 Investments 73,000
Bijli 90,000 2,40,000 Stock 43,000
Badal’s Current A/c 12,000 Debtors 20,000
Investment Fluctuation 24,000 Cash 22,000
Reserve Bijli’s Current A/c 2,000
Bills Payable 8,000
Creditors 26,000

3,10,000 3,10,000
Raina was admitted on the above date as a new partner for 1/6 th share in the profits
of the firm. The terms of agreement were as follows:
(i) Raina will bring ₹40,000 as her capital and capitals of Badal and Bijli will be
adjusted on the basis of Raina’s capital by opening current accounts.
(ii) Raina will bring her share of goodwill premium for ₹ 12,000 in cash.
(iii) The building was overvalued by ₹15,000 and stock by ₹ 3,000.
(iv) A provision of 10% was to be created on debtors for bad debts.
Prepare the Revaluation Account and Current and Capital Accounts of Badal, Bijli
and Raina.

______________________________________________________________________________

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