DOON INTERNATIONAL SCHOOL

ACCOUNTANCY – CLASS 12th

Revision Sheet – Partnership Firms Fundamentals

1. If drawings are made at beginning of each month, then interest is calculated for:
(a) 6 Months (b) 5.5 Months (c) 6.5 Months (d) 13 Months

2. Richa and Rashmeet are partners. During the year, Richa drew ` 16,000. Calculate interest on drawings, if the
rate of interest is 12% p.a.
(a) 1,170 (b) 960 (c) 1,320 (d) 1,000

3. Which of the following is not an appropriation of profits?

(a) Interest on capital (b) Interest on Loan (c) Salary (d) Commission

4. Vishal is drawing ` 1,000 p.m. on the last day of every month. If the rate of interest is 5% p.a., then the total
interest chargeable from him in the accounting year will be
(a) ` 325 (b) ` 275 (c) ` 300 (d) ` 350

5. Aditya and Anubhav are partners with capitals of ` 4,00,000 and ` 3,00,000 respectively. If firm earned a profit
of ` 35,000 for the year ended 31st March, 2019, then interest on capital @ 10% p.a. would be appropriated as:
(a) ` 40,000 and ` 30,000 (b) ` 17,500 and ` 17,500 (c) ` 20,000 and ` 15,000 (d) None

6. Fill in the blanks with appropriate words:

(a) Current Accounts are prepared when capital accounts __________.
(b) At least __________ persons are necessary for forming a partnership.
(c) In the absence of an agreement, partner can claim interest on loan @ __________ per annum.
(d) Interest on drawings is __________ to partners’ capital account.
(e) If the date of drawings is not given, interest on drawings should be charged for __________ months.

7. State whether the following statements are True or False.

(a) Interest on loan advanced by the partner to the firm has to be paid even if there are losses in the business.
(b) Valid partnership can be formulated even without a written agreement between the partners.
(c) Each partner carrying on business is the principal as well as the agent for all other partners.
(d) Methods of settlement of dispute among the partners can’t be part of the partnership deed.
(e) Under fixed capital method, any addition to capital is shown in the partners’ current account.

8. List any two circumstances under which the fixed capital of partners may change.

9. Name the method of calculating interest on drawings of the partners if different amounts are withdrawn on
different dates.

10. Gupta and Pandey were partners in a firm sharing profits equally. Their fixed capitals were ` 1,00,000 and `
50,000 respectively. The partnership deed provided for interest on capital at the rate of 10% per annum. For the
year ended 31st March, 2016, the profits of the firm were distributed without providing interest on capital.
Pass necessary adjustment entry to rectify the error.
 11. Mahek, Meet and Nandini entered into partnership on 1st July, 2018 to share profits and losses in the ratio of 3:2:1.
Mahek personally guaranteed that Nandini’s share of profit after charging interest on capital @ 6% p.a. would not be less
than ` 18,000 p.a. The Capital contribution were Mahek: ` 1,00,000’ Meet: ` 50,000 and Nandini: ` 50,000. The profits for
the period ended 31st March, 2019 were ` 69,000. Show the distribution of profits.

12. Alok, Ashish and Harsh are partners having capital of ` 3,00,000, ` 2,00,000 and ` 1,00,000 respectively in a firm and
sharing profits and losses in the ratio of 3:2:1. Harsh is guaranteed a minimum profit of ` 30,000 p.a. The firm incurred a
loss of ` 60,000 for the year ended 31st March, 2019. Prepare the necessary accounts for division of loss and giving effect to
minimum guaranteed profit to Harsh. Also pass necessary Journal entries in the books of the firm.

13. Aditi, Anmol and Anushka are partners in a firm. On 1st April, 2011, the balance in their capital accounts stood at `
8,00,000, ` 6,00,000 and ` 4,00,000 respectively. They shared profits in the proportion of 5:3:2 respectively. Partners are
entitled to interest on capital @ 5% per annum and salary to Anmol @ ` 3,000 per month and a commission of ` 12,000 to
Anushka as per the provision of the partnership deed.
Aditi’s share of profit, excluding interest on capital, is guaranteed at not less than ` 25,000 p.a. Anmol’s share of profit,
including interest on capital but excluding salary, is guaranteed at not less than ` 55,000 p.a. Any deficiency arising on that
account shall be met by Anushka. The profits of the firm for the year ended 31st March, 2012 amounted to ` 2,16,000.
Prepare Profit and Loss Appropriation account for the year ended 31st March, 2012.

14. Armaan and Rajveer are partners sharing profits and losses in the ratio of 3:1. They agreed to admit their manager, Yash
as a partner with effect from 1st January, 2018 for 1/4th share in of profit. Yash has deposited ` 30,000 as security. He was
getting a salary of ` 24,000 per annum and a commission of 10% on the net profit after charging his salary and commission.
As per partnership deed, the security deposited by Yash is to be treated as his share of capital. Any excess amount which
Yash will get over the receipt as a manager would be borne by Armaan and Rajveer in the ratio of 3:2. Profit for the year
2018 was ` 2,00,000 before payment of salary and commission to Yash. Prepare Profit and Loss Appropriation account of
the firm during 2018.

15. Anika and Khushi are partners with capitals of ` 50,000 and ` 30,000 respectively on 1st April 2016. The trading profit
of the firm for the accounting year before appropriation as per partnership deed was ` 22,000. As per Partnership deed,
interest on capital is allowed @ 8% p.a. Khushi is entitled to a salary of ` 500 p.m. Drawings of partners were ` 6,000 and
` 5,000 and interest thereon amounts to ` 300 and ` 200 for Anika and Khushi respectively.
Show how the profit will be divided between X and Y and also show Partners Capital Accounts under:
(i) Fixed Capital and
(ii) Fluctuating Capital

16. Riya, Shraddha and Sanskriti are partners of a firm distributed the profits for the year ended 31st March, 2022 ` 1,40,000
in the ratio of 2:2:1 without providing for the following adjustments:
(i) Riya and Shraddha were entitled to a salary of ` 1,500 per quarter.
(ii) Sanskriti was entitled to a commission of ` 8,000.
(iii) Riya and Sanskriti had guaranteed a minimum profit of ` 50,000 p.a. to Shraddha.
(iv) Profits were to be shared in the ratio of 3:3:2.
Pass necessary journal entry for the above adjustments in the books of the firm.

17. Jasmine, Kirti and Nancy were partners in a firm. On 1st April 2020, their fixed capital stood at ` 50,000; ` 25,000 and `
25,000 respectively. As per provisions of partnership deed:
(a) Kirti was entitled for a salary of ` 5,000 p.a.
(b) All the partners were entitled to interest on capital at 5% p.a.
(c) Profits were to be shared in the ratio of their capitals.
The net profits for the year ending 31-3-2021 of ` 33,000 and 31-3-2022 of ` 45,000 were divided equally without
providing for the above terms. Pass an adjustment Journal entry to rectify the above errors.
 18. Ishaan and Ishminder are partners in a firm sharing profits and losses in the ratio of 3:2. The following was the
Balance Sheet of the firm as on 31-3-2010.
Balance Sheet
Liabilities ` Assets `
Capitals: Sundry Assets 80,000
Ishaan 60,000
Ishminder 20,000
80,000 80,000
The profits ` 30,000 for the year ended 31-3-2010 were divided between the partners without allowing interest on capital @
12% p.a. and salary to Ishaan @ ` 1,000 per month. During the year, Ishaan withdrew ` 10,000 and Ishminder ` 20,000.
Pass the necessary adjustment entry and show your working clearly.

19. Aryan and Ayushman are partners with a capital of ` 2,00,000 and ` 1,50,000 respectively. The net profit for the year
endings 31st March, 2022 amounted to ` 2,51,750 before considering the followings:

(i) Aryan advanced loan to the firm amounting ` 1,00,000.

(ii) Interest on capital be allowed @ 5% p.a.
(iii) Interest on drawing be allowed @ 5% p.a. Drawings of Aryan was ` 40,000 and of Ayushman was ` 30,000.
(iv) Aryan was allowed commission @ 2% on sales which was ` 15,00,000 while Ayushman was allowed commission
@ 10% on distributable profit before charging his commission but after charging Aryan’s commission.
(v) It was also decided to keep 10% of divisible profit to Reserve Account.
Prepare Profit and Loss Appropriation Account.

20. Bajpai, Shukla and Srivastava are partners of a firm distributed the profits for the year ended 31 st March, 2017, `
1,20,000 in the ratio of 2:2:1 without providing for the following adjustments:

(i) Bajpai and Shukla were entitled to a salary of ` 1,500 each per quarter.
(ii) Srivastava was entitled to a commission of ` 6,000.
(iii) Bajpai and Srivastava had guaranteed a minimum profit of ` 48,000 p.a. to Shukla.
(iv) Profits were to be shared in the ratio of 4:3:2.
Pass necessary adjustment entry for the above adjustments in the books of the firm.

21. Compute interest on drawings of Devansh @ 10% p.a. in the following alternate cases for the year:

Case I. If his drawings during the year was ` 40,000.

Case II. If he withdrew ` 2,500 per month during the year.
Case III. If he withdrew 3,000 per month for first six months in the beginning of each months and he withdrew ` 3,000 p.m.
for the later 6 months at the end of each months.

22. Anuj, Lakshya and Pulkit are partners doing a paper business in Ludhiana. After the accounts of partnership have been
drawn up and closed, it was discovered that for the years ending 31st March 2021 and 2022, interest on capital has been
allowed to partners @ 6% p.a. although there is no provision for interest on capital in the partnership deed. Their fixed
capitals were ` 2,00,000, ` 1,60,000 and ` 1,20,000 respectively. During the last two years, they had shared the profits as
under:
Year Ratio
st
31 March, 2021 3:2:1
st
31 March, 2022 5:3:2
You are required to give necessary adjusting entry on 1st April, 2022.
 23. Simran, Sumedha and Tanishkaa shared profits in the ratio of 3:2:1. The profit of the last 3 years were ` 1,40,000, `
84,000 and ` 1,06,000 respectively. The profits were by mistake shared equally for all the three years. It is now decided to
correct the error. Give necessary journal entry.

24. Amitesh, Shashwat and Prafulla are partners in a firm. Their profits for the last three years were ` 20,000, ` 36,000 and
` 40,000 respectively. They shared profits in the ratio of 2:1:1. Prafulla noticed this fact after 3 rd year and objected to profit
sharing ratio. The profit was decided to be distributed equally from retrospective date.
You are required to pass necessary adjustment entry in the books of the firm.

25. Following is the Balance Sheet of Gunika and Ishpreet for the year ending 31-3-2022.
Balance Sheet
Liabilities ` Assets `
Capitals: Sundry Assets 1,70,000
Gunika 1,00,000 Gunika’s Drawings 30,000
Ishpreet 80,000
Profit and Loss A/c 20,000
2,00,000 2,00,000
Ishpreet’s drawings during the year 2021-22 was ` 25,000 and profits were ` 50,000. While finalizing the accounts for
2021-22, interest on capital @ 5% p.a. and interest on drawing @ 6% p.a. were advertently, ignored. Pass an adjustment
entry.