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# Revision Test - Accounting Partnership Firms Fundamentals Class 12 Notes | EduRev

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## Class 12 : Revision Test - Accounting Partnership Firms Fundamentals Class 12 Notes | EduRev

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PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
PUNEET COLLEGE
TEST NO â€“ 1 (2013 â€“ 14)
ACCOUNTING FOR PARTNERSHIP FIRMS
19
TH
APRIL, 13
TIME â€“ 1 Hr 30 Min            SET â€“ 1            MM ? 23
Q 1: After including the profits for the year ended 31
st
March, 2004 and dealing with drawings, the capital
accounts of X, Y and Z stood at Rs. 40, 000; Rs. 30, 000 and Rs. 20, 000 respectively.
Subsequently, they discovered that interest on capital at 6% and interest on drawings had been
omitted, the interest chargeable on drawings being X Rs. 250; Y Rs. 180 and Z Rs. 100.
The profits for the year ended 31
st
March 2004 in arriving at the above figures of capital amounted to
Rs. 60, 000 and the partnersâ€™ drawing for the year were: X Rs. 10, 000; Y Rs. 7, 500 and Z Rs. 4, 500.
X, Y and Z shared profits and losses in the proportions of 3:2:1 respectively. Give one journal entry
to rectify the above.         6
Q 2: The partnership agreement between X and Y provides that:
a. Profits will be shared equally.
b. X will be allowed a salary of Rs. 800 p.m.
c. Y who manages the sales department will be allowed a commission equal to 10% of the net profit
after allowing X Salary.
d. 7% interest will be allowed on partners fixed capital.
e. 5% interest will be charged on partners annual drawings.
f. The fixed capitals of X and Y are Rs. 2, 00, 000 and Rs. 1, 60, 000 respectively. Their annual
drawings were Rs. 32, 000 and Rs. 28, 000 respectively.
The net profit for the year ending March, 2011 amounted to Rs. 80, 000.
Prepare Profit and Loss Appropriation Account.      3

Q 3: A and B are partners in a firm sharing profits in the ratio of 2:1. Following is the balance sheet of the
firm as on 31
st
December, 2004:
Liabilities Rs. Assets  Rs.
Aâ€™s Capital
Bâ€™s Capital
Creditors
1, 00, 000
35, 000
40, 000
Drawings:
A 10, 000
B 5, 000
Sundry Assets

15, 000
1, 60, 000
1, 75, 000  1, 75, 000
Profit for the year 2004 Rs. 30, 000 was divided between the partners in the agreed ratio, but interest
on capital at 9% p.a. and on drawings at 12% p.a. was inadvertently ignored. Adjust the interest.
Q 4: What is Drawings against Capital?       1
Q 5: Why it is better to make a partnership agreement in writing?    1
Q 6: A, B and C were partners. Their capitals were A â€“ Rs. 30, 000, B â€“ Rs. 20, 000 and C â€“ Rs. 10, 000
respectively. According to the partnership Deed, they were entitled to an interest on capital at 5%
p.a. In addition B was also entitled to draw a salary of Rs. 500 per month. C was entitled to a
commission of 5% on the profits after charging the interest on capital, but before charging the salary
payable to B. The net profits for the year were Rs. 30, 000 distributed in the ratio of capitals without
providing for any of the above adjustments. The profits were to be shared in the ratio of 5:2:3.
Pass the necessary adjustment entry showing the workings clearly.    6
Page 2

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
PUNEET COLLEGE
TEST NO â€“ 1 (2013 â€“ 14)
ACCOUNTING FOR PARTNERSHIP FIRMS
19
TH
APRIL, 13
TIME â€“ 1 Hr 30 Min            SET â€“ 1            MM ? 23
Q 1: After including the profits for the year ended 31
st
March, 2004 and dealing with drawings, the capital
accounts of X, Y and Z stood at Rs. 40, 000; Rs. 30, 000 and Rs. 20, 000 respectively.
Subsequently, they discovered that interest on capital at 6% and interest on drawings had been
omitted, the interest chargeable on drawings being X Rs. 250; Y Rs. 180 and Z Rs. 100.
The profits for the year ended 31
st
March 2004 in arriving at the above figures of capital amounted to
Rs. 60, 000 and the partnersâ€™ drawing for the year were: X Rs. 10, 000; Y Rs. 7, 500 and Z Rs. 4, 500.
X, Y and Z shared profits and losses in the proportions of 3:2:1 respectively. Give one journal entry
to rectify the above.         6
Q 2: The partnership agreement between X and Y provides that:
a. Profits will be shared equally.
b. X will be allowed a salary of Rs. 800 p.m.
c. Y who manages the sales department will be allowed a commission equal to 10% of the net profit
after allowing X Salary.
d. 7% interest will be allowed on partners fixed capital.
e. 5% interest will be charged on partners annual drawings.
f. The fixed capitals of X and Y are Rs. 2, 00, 000 and Rs. 1, 60, 000 respectively. Their annual
drawings were Rs. 32, 000 and Rs. 28, 000 respectively.
The net profit for the year ending March, 2011 amounted to Rs. 80, 000.
Prepare Profit and Loss Appropriation Account.      3

Q 3: A and B are partners in a firm sharing profits in the ratio of 2:1. Following is the balance sheet of the
firm as on 31
st
December, 2004:
Liabilities Rs. Assets  Rs.
Aâ€™s Capital
Bâ€™s Capital
Creditors
1, 00, 000
35, 000
40, 000
Drawings:
A 10, 000
B 5, 000
Sundry Assets

15, 000
1, 60, 000
1, 75, 000  1, 75, 000
Profit for the year 2004 Rs. 30, 000 was divided between the partners in the agreed ratio, but interest
on capital at 9% p.a. and on drawings at 12% p.a. was inadvertently ignored. Adjust the interest.
Q 4: What is Drawings against Capital?       1
Q 5: Why it is better to make a partnership agreement in writing?    1
Q 6: A, B and C were partners. Their capitals were A â€“ Rs. 30, 000, B â€“ Rs. 20, 000 and C â€“ Rs. 10, 000
respectively. According to the partnership Deed, they were entitled to an interest on capital at 5%
p.a. In addition B was also entitled to draw a salary of Rs. 500 per month. C was entitled to a
commission of 5% on the profits after charging the interest on capital, but before charging the salary
payable to B. The net profits for the year were Rs. 30, 000 distributed in the ratio of capitals without
providing for any of the above adjustments. The profits were to be shared in the ratio of 5:2:3.
Pass the necessary adjustment entry showing the workings clearly.    6

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
PUNEET COLLEGE
TEST NO â€“ 1 (2013 â€“ 14)
ACCOUNTING FOR PARTNERSHIP FIRMS
19
TH
APRIL, 13
TIME â€“ 1 Hr 30 Min            SET â€“ 2            MM ? 23
Q 1: The partnership agreement between Maneesh and Girish provides that
a. Profits will be shared equally.
b. Maneesh will be allowed a salary of Rs. 400 p.m.
c. Girish who manages the sales department will be allowed a commission equal to 10% of the net
profit after allowing Maneeshâ€™s salary.
d. 7% interest will be allowed on partnerâ€™s fixed capital.
e. 5% interest will be charged on partnerâ€™s annual drawings.
f. The fixed capitals of Maneesh and Girish are Rs. 1, 00, 000 and Rs. 80, 000 respectively. Their
annual drawings were Rs. 16, 000 and Rs. 14, 000 respectively. The net profit for the year ending
March 31, 2002 amounted to Rs. 40, 000.
Prepare Profit and Loss Appropriation Account.      3
Q 2: The capital accounts of P, Q and R stood at Rs. 10, 000 Rs. 7, 500 and Rs. 5, 000 respectively after the
necessary adjustments in respect of the Drawings and the Net Profit for the year ended 31
st

December, 2001. It was subsequently ascertained that 5% interest on capital and on the drawings of
each partner had been omitted. The drawings of the partners have been P â€“ Rs. 1, 000; Q â€“ Rs. 750
and R â€“ Rs. 600. The interest on these amounted to Rs. 20, Rs. 15 and Rs. 7.50 respectively. The
profit for the year as already adjusted amounted to Rs. 5, 000. The partners share profits in
proportions of 2:2:1. Give the necessary journal entries for the above adjustment and show your
workings clearly.         6
Q 3: A, B and C are partners in a firm. On 1.1.1998 their capitals stood at Rs. 50, 000, Rs. 25, 000 and Rs.
25, 000 respectively. As per the provision of the partnership deed:
a. C was entitled for a salary of Rs. 1, 000 p.m.
b. Partners were entitled to interest on capital at 5% p.a.
c. Profits were to be shared in the ratios of capitals.
The net profit for the year 1998 of Rs. 33, 000 was divided equally without providing for the above
terms.
Pass the adjustment entry to rectify the above error.     6
Q 4: Shall the interest on loan given by partner to the firm to be paid if there are losses?  1
Q 5: What is drawings against profits?        1
Q 6: A, B and C were partners in a firm. On 1
st
April, 2008 their fixed capitals stood at Rs. 50, 000;
Rs. 25, 000 and Rs. 25, 000 respectively.
As per the provisions of the Partnership Deed:
a. B was entitled for a salary of Rs. 5, 000 p.a.
b. All the partners were entitled to interest on capital @ 5% p.a.
c. Profits were to be shared in the ratio of capitals.
The net profit for the year ended 31
st
March, 2009 of Rs. 33, 000 and 31
st
March, 2010 of Rs. 45, 000,
was divided equally without providing for the above terms.
Pass an adjustment Journal entry to rectify the above error.    6
Page 3

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
PUNEET COLLEGE
TEST NO â€“ 1 (2013 â€“ 14)
ACCOUNTING FOR PARTNERSHIP FIRMS
19
TH
APRIL, 13
TIME â€“ 1 Hr 30 Min            SET â€“ 1            MM ? 23
Q 1: After including the profits for the year ended 31
st
March, 2004 and dealing with drawings, the capital
accounts of X, Y and Z stood at Rs. 40, 000; Rs. 30, 000 and Rs. 20, 000 respectively.
Subsequently, they discovered that interest on capital at 6% and interest on drawings had been
omitted, the interest chargeable on drawings being X Rs. 250; Y Rs. 180 and Z Rs. 100.
The profits for the year ended 31
st
March 2004 in arriving at the above figures of capital amounted to
Rs. 60, 000 and the partnersâ€™ drawing for the year were: X Rs. 10, 000; Y Rs. 7, 500 and Z Rs. 4, 500.
X, Y and Z shared profits and losses in the proportions of 3:2:1 respectively. Give one journal entry
to rectify the above.         6
Q 2: The partnership agreement between X and Y provides that:
a. Profits will be shared equally.
b. X will be allowed a salary of Rs. 800 p.m.
c. Y who manages the sales department will be allowed a commission equal to 10% of the net profit
after allowing X Salary.
d. 7% interest will be allowed on partners fixed capital.
e. 5% interest will be charged on partners annual drawings.
f. The fixed capitals of X and Y are Rs. 2, 00, 000 and Rs. 1, 60, 000 respectively. Their annual
drawings were Rs. 32, 000 and Rs. 28, 000 respectively.
The net profit for the year ending March, 2011 amounted to Rs. 80, 000.
Prepare Profit and Loss Appropriation Account.      3

Q 3: A and B are partners in a firm sharing profits in the ratio of 2:1. Following is the balance sheet of the
firm as on 31
st
December, 2004:
Liabilities Rs. Assets  Rs.
Aâ€™s Capital
Bâ€™s Capital
Creditors
1, 00, 000
35, 000
40, 000
Drawings:
A 10, 000
B 5, 000
Sundry Assets

15, 000
1, 60, 000
1, 75, 000  1, 75, 000
Profit for the year 2004 Rs. 30, 000 was divided between the partners in the agreed ratio, but interest
on capital at 9% p.a. and on drawings at 12% p.a. was inadvertently ignored. Adjust the interest.
Q 4: What is Drawings against Capital?       1
Q 5: Why it is better to make a partnership agreement in writing?    1
Q 6: A, B and C were partners. Their capitals were A â€“ Rs. 30, 000, B â€“ Rs. 20, 000 and C â€“ Rs. 10, 000
respectively. According to the partnership Deed, they were entitled to an interest on capital at 5%
p.a. In addition B was also entitled to draw a salary of Rs. 500 per month. C was entitled to a
commission of 5% on the profits after charging the interest on capital, but before charging the salary
payable to B. The net profits for the year were Rs. 30, 000 distributed in the ratio of capitals without
providing for any of the above adjustments. The profits were to be shared in the ratio of 5:2:3.
Pass the necessary adjustment entry showing the workings clearly.    6

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
PUNEET COLLEGE
TEST NO â€“ 1 (2013 â€“ 14)
ACCOUNTING FOR PARTNERSHIP FIRMS
19
TH
APRIL, 13
TIME â€“ 1 Hr 30 Min            SET â€“ 2            MM ? 23
Q 1: The partnership agreement between Maneesh and Girish provides that
a. Profits will be shared equally.
b. Maneesh will be allowed a salary of Rs. 400 p.m.
c. Girish who manages the sales department will be allowed a commission equal to 10% of the net
profit after allowing Maneeshâ€™s salary.
d. 7% interest will be allowed on partnerâ€™s fixed capital.
e. 5% interest will be charged on partnerâ€™s annual drawings.
f. The fixed capitals of Maneesh and Girish are Rs. 1, 00, 000 and Rs. 80, 000 respectively. Their
annual drawings were Rs. 16, 000 and Rs. 14, 000 respectively. The net profit for the year ending
March 31, 2002 amounted to Rs. 40, 000.
Prepare Profit and Loss Appropriation Account.      3
Q 2: The capital accounts of P, Q and R stood at Rs. 10, 000 Rs. 7, 500 and Rs. 5, 000 respectively after the
necessary adjustments in respect of the Drawings and the Net Profit for the year ended 31
st

December, 2001. It was subsequently ascertained that 5% interest on capital and on the drawings of
each partner had been omitted. The drawings of the partners have been P â€“ Rs. 1, 000; Q â€“ Rs. 750
and R â€“ Rs. 600. The interest on these amounted to Rs. 20, Rs. 15 and Rs. 7.50 respectively. The
profit for the year as already adjusted amounted to Rs. 5, 000. The partners share profits in
proportions of 2:2:1. Give the necessary journal entries for the above adjustment and show your
workings clearly.         6
Q 3: A, B and C are partners in a firm. On 1.1.1998 their capitals stood at Rs. 50, 000, Rs. 25, 000 and Rs.
25, 000 respectively. As per the provision of the partnership deed:
a. C was entitled for a salary of Rs. 1, 000 p.m.
b. Partners were entitled to interest on capital at 5% p.a.
c. Profits were to be shared in the ratios of capitals.
The net profit for the year 1998 of Rs. 33, 000 was divided equally without providing for the above
terms.
Pass the adjustment entry to rectify the above error.     6
Q 4: Shall the interest on loan given by partner to the firm to be paid if there are losses?  1
Q 5: What is drawings against profits?        1
Q 6: A, B and C were partners in a firm. On 1
st
April, 2008 their fixed capitals stood at Rs. 50, 000;
Rs. 25, 000 and Rs. 25, 000 respectively.
As per the provisions of the Partnership Deed:
a. B was entitled for a salary of Rs. 5, 000 p.a.
b. All the partners were entitled to interest on capital @ 5% p.a.
c. Profits were to be shared in the ratio of capitals.
The net profit for the year ended 31
st
March, 2009 of Rs. 33, 000 and 31
st
March, 2010 of Rs. 45, 000,
was divided equally without providing for the above terms.
Pass an adjustment Journal entry to rectify the above error.    6

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
TEST NO â€“ 1 SET â€“ 1 SOLUTION (19
TH
April, 2013)
Ans 1: Dr.    Profit or Loss Appropriation A/c             Cr.
Particulars Rs. Particulars Rs.
To Interest on Capital:
X Capital
Y Capital
Z Capital
Profit

1, 200
1, 050
870
57, 410
Interest on drawings
X Capital
Y Capital
Z Capital
60, 000

250
180
100
60, 530  60, 530
Opening Capital
X Rs. Y Rs. Z Rs.
Closing Capital
+ Drawings
40, 000
10, 000
30, 000
7, 500
20, 000
4, 500

-Profit
50, 000
30, 000
37, 500
20, 000
24, 500
10, 000
20, 000 17, 500 14, 500
Interest on Capital
Profit
Interest on Drawing
1, 200
28, 705
(250)
1, 050
19, 133.67
(180)
870
9, 568.33
(100)

29, 655
30, 000
20, 006.67
20, 000.00
10, 338.33
10, 000.00
345 (Dr.) 6.67 (Cr.) 338.33 (Cr.)
Journal
X Capital Dr. 345
To Y capital       6.67
To Z capital  338.33

Ans 2:     P & L Appropriation A/c
Particulars Rs. Particulars Rs.
To Salary X current
To Commission
Y current (80,000+9,600) X 10%
To Interest on capital:
X current
Y current
To profit
X current
Y current
9, 600

7, 040

14, 000
11, 200

20, 580
20, 580
By Net Profit
By Interest on drawing
X current
Y current
80, 000

1, 600
1, 400
83, 000  83, 000

Ans 3: Closing Capital 1, 00, 000 35, 000
-Profit      20, 000 10, 000
Opening Capital    80, 000 25, 000

Rs.  Rs.
To Interest on Capital:
A Capital
B Capital
Profit

7, 200
2, 250
21, 450
By interest on drawings:
A
B
30, 000

600
300
30, 900  30, 900

Page 4

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
PUNEET COLLEGE
TEST NO â€“ 1 (2013 â€“ 14)
ACCOUNTING FOR PARTNERSHIP FIRMS
19
TH
APRIL, 13
TIME â€“ 1 Hr 30 Min            SET â€“ 1            MM ? 23
Q 1: After including the profits for the year ended 31
st
March, 2004 and dealing with drawings, the capital
accounts of X, Y and Z stood at Rs. 40, 000; Rs. 30, 000 and Rs. 20, 000 respectively.
Subsequently, they discovered that interest on capital at 6% and interest on drawings had been
omitted, the interest chargeable on drawings being X Rs. 250; Y Rs. 180 and Z Rs. 100.
The profits for the year ended 31
st
March 2004 in arriving at the above figures of capital amounted to
Rs. 60, 000 and the partnersâ€™ drawing for the year were: X Rs. 10, 000; Y Rs. 7, 500 and Z Rs. 4, 500.
X, Y and Z shared profits and losses in the proportions of 3:2:1 respectively. Give one journal entry
to rectify the above.         6
Q 2: The partnership agreement between X and Y provides that:
a. Profits will be shared equally.
b. X will be allowed a salary of Rs. 800 p.m.
c. Y who manages the sales department will be allowed a commission equal to 10% of the net profit
after allowing X Salary.
d. 7% interest will be allowed on partners fixed capital.
e. 5% interest will be charged on partners annual drawings.
f. The fixed capitals of X and Y are Rs. 2, 00, 000 and Rs. 1, 60, 000 respectively. Their annual
drawings were Rs. 32, 000 and Rs. 28, 000 respectively.
The net profit for the year ending March, 2011 amounted to Rs. 80, 000.
Prepare Profit and Loss Appropriation Account.      3

Q 3: A and B are partners in a firm sharing profits in the ratio of 2:1. Following is the balance sheet of the
firm as on 31
st
December, 2004:
Liabilities Rs. Assets  Rs.
Aâ€™s Capital
Bâ€™s Capital
Creditors
1, 00, 000
35, 000
40, 000
Drawings:
A 10, 000
B 5, 000
Sundry Assets

15, 000
1, 60, 000
1, 75, 000  1, 75, 000
Profit for the year 2004 Rs. 30, 000 was divided between the partners in the agreed ratio, but interest
on capital at 9% p.a. and on drawings at 12% p.a. was inadvertently ignored. Adjust the interest.
Q 4: What is Drawings against Capital?       1
Q 5: Why it is better to make a partnership agreement in writing?    1
Q 6: A, B and C were partners. Their capitals were A â€“ Rs. 30, 000, B â€“ Rs. 20, 000 and C â€“ Rs. 10, 000
respectively. According to the partnership Deed, they were entitled to an interest on capital at 5%
p.a. In addition B was also entitled to draw a salary of Rs. 500 per month. C was entitled to a
commission of 5% on the profits after charging the interest on capital, but before charging the salary
payable to B. The net profits for the year were Rs. 30, 000 distributed in the ratio of capitals without
providing for any of the above adjustments. The profits were to be shared in the ratio of 5:2:3.
Pass the necessary adjustment entry showing the workings clearly.    6

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
PUNEET COLLEGE
TEST NO â€“ 1 (2013 â€“ 14)
ACCOUNTING FOR PARTNERSHIP FIRMS
19
TH
APRIL, 13
TIME â€“ 1 Hr 30 Min            SET â€“ 2            MM ? 23
Q 1: The partnership agreement between Maneesh and Girish provides that
a. Profits will be shared equally.
b. Maneesh will be allowed a salary of Rs. 400 p.m.
c. Girish who manages the sales department will be allowed a commission equal to 10% of the net
profit after allowing Maneeshâ€™s salary.
d. 7% interest will be allowed on partnerâ€™s fixed capital.
e. 5% interest will be charged on partnerâ€™s annual drawings.
f. The fixed capitals of Maneesh and Girish are Rs. 1, 00, 000 and Rs. 80, 000 respectively. Their
annual drawings were Rs. 16, 000 and Rs. 14, 000 respectively. The net profit for the year ending
March 31, 2002 amounted to Rs. 40, 000.
Prepare Profit and Loss Appropriation Account.      3
Q 2: The capital accounts of P, Q and R stood at Rs. 10, 000 Rs. 7, 500 and Rs. 5, 000 respectively after the
necessary adjustments in respect of the Drawings and the Net Profit for the year ended 31
st

December, 2001. It was subsequently ascertained that 5% interest on capital and on the drawings of
each partner had been omitted. The drawings of the partners have been P â€“ Rs. 1, 000; Q â€“ Rs. 750
and R â€“ Rs. 600. The interest on these amounted to Rs. 20, Rs. 15 and Rs. 7.50 respectively. The
profit for the year as already adjusted amounted to Rs. 5, 000. The partners share profits in
proportions of 2:2:1. Give the necessary journal entries for the above adjustment and show your
workings clearly.         6
Q 3: A, B and C are partners in a firm. On 1.1.1998 their capitals stood at Rs. 50, 000, Rs. 25, 000 and Rs.
25, 000 respectively. As per the provision of the partnership deed:
a. C was entitled for a salary of Rs. 1, 000 p.m.
b. Partners were entitled to interest on capital at 5% p.a.
c. Profits were to be shared in the ratios of capitals.
The net profit for the year 1998 of Rs. 33, 000 was divided equally without providing for the above
terms.
Pass the adjustment entry to rectify the above error.     6
Q 4: Shall the interest on loan given by partner to the firm to be paid if there are losses?  1
Q 5: What is drawings against profits?        1
Q 6: A, B and C were partners in a firm. On 1
st
April, 2008 their fixed capitals stood at Rs. 50, 000;
Rs. 25, 000 and Rs. 25, 000 respectively.
As per the provisions of the Partnership Deed:
a. B was entitled for a salary of Rs. 5, 000 p.a.
b. All the partners were entitled to interest on capital @ 5% p.a.
c. Profits were to be shared in the ratio of capitals.
The net profit for the year ended 31
st
March, 2009 of Rs. 33, 000 and 31
st
March, 2010 of Rs. 45, 000,
was divided equally without providing for the above terms.
Pass an adjustment Journal entry to rectify the above error.    6

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
TEST NO â€“ 1 SET â€“ 1 SOLUTION (19
TH
April, 2013)
Ans 1: Dr.    Profit or Loss Appropriation A/c             Cr.
Particulars Rs. Particulars Rs.
To Interest on Capital:
X Capital
Y Capital
Z Capital
Profit

1, 200
1, 050
870
57, 410
Interest on drawings
X Capital
Y Capital
Z Capital
60, 000

250
180
100
60, 530  60, 530
Opening Capital
X Rs. Y Rs. Z Rs.
Closing Capital
+ Drawings
40, 000
10, 000
30, 000
7, 500
20, 000
4, 500

-Profit
50, 000
30, 000
37, 500
20, 000
24, 500
10, 000
20, 000 17, 500 14, 500
Interest on Capital
Profit
Interest on Drawing
1, 200
28, 705
(250)
1, 050
19, 133.67
(180)
870
9, 568.33
(100)

29, 655
30, 000
20, 006.67
20, 000.00
10, 338.33
10, 000.00
345 (Dr.) 6.67 (Cr.) 338.33 (Cr.)
Journal
X Capital Dr. 345
To Y capital       6.67
To Z capital  338.33

Ans 2:     P & L Appropriation A/c
Particulars Rs. Particulars Rs.
To Salary X current
To Commission
Y current (80,000+9,600) X 10%
To Interest on capital:
X current
Y current
To profit
X current
Y current
9, 600

7, 040

14, 000
11, 200

20, 580
20, 580
By Net Profit
By Interest on drawing
X current
Y current
80, 000

1, 600
1, 400
83, 000  83, 000

Ans 3: Closing Capital 1, 00, 000 35, 000
-Profit      20, 000 10, 000
Opening Capital    80, 000 25, 000

Rs.  Rs.
To Interest on Capital:
A Capital
B Capital
Profit

7, 200
2, 250
21, 450
By interest on drawings:
A
B
30, 000

600
300
30, 900  30, 900

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
A         B
Interest on Capital    7, 200    7, 250
Profit     14, 300    7, 150
21, 500    9, 400
Loss Interest on drawings       600        300
Amount to be Cr.  20, 900    9, 100
Amount already Cr.  20, 000  10, 000
900 (Cr.)       900 (Dr.)
Journal
B Capital Dr. 900
To A Capital  900.

Ans 6:     Assuming Capital is Fixed
Rs.  Rs.
To Interest on Capital:
A Capital Current
B Capital Current
C Capital Current
Commission Current
Salary B Current
Profit:
A Current
B Current
C Current

1, 500
1, 000
500
1, 350
6, 000

9, 825
3, 930
5, 895
By NP (already Cr.) (15+10+5) 30, 000,
30, 000  30, 000
A Rs.  B Rs.  C Rs.
Interest on Capital 1, 500  1, 000      500
Commission   â€¦â€¦..  â€¦â€¦.  1, 350
Salary   â€¦â€¦..  6, 000  â€¦â€¦..
Profit    9, 825  3, 930  5, 895
Amount to be Cr.    11, 325               10, 930  7, 745
Amount already Cr. 15, 000  10, 000  5, 000
3, 675        930  2, 745

A current Dr. 3, 675
To B Current      930
To C current  2, 745

Page 5

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
PUNEET COLLEGE
TEST NO â€“ 1 (2013 â€“ 14)
ACCOUNTING FOR PARTNERSHIP FIRMS
19
TH
APRIL, 13
TIME â€“ 1 Hr 30 Min            SET â€“ 1            MM ? 23
Q 1: After including the profits for the year ended 31
st
March, 2004 and dealing with drawings, the capital
accounts of X, Y and Z stood at Rs. 40, 000; Rs. 30, 000 and Rs. 20, 000 respectively.
Subsequently, they discovered that interest on capital at 6% and interest on drawings had been
omitted, the interest chargeable on drawings being X Rs. 250; Y Rs. 180 and Z Rs. 100.
The profits for the year ended 31
st
March 2004 in arriving at the above figures of capital amounted to
Rs. 60, 000 and the partnersâ€™ drawing for the year were: X Rs. 10, 000; Y Rs. 7, 500 and Z Rs. 4, 500.
X, Y and Z shared profits and losses in the proportions of 3:2:1 respectively. Give one journal entry
to rectify the above.         6
Q 2: The partnership agreement between X and Y provides that:
a. Profits will be shared equally.
b. X will be allowed a salary of Rs. 800 p.m.
c. Y who manages the sales department will be allowed a commission equal to 10% of the net profit
after allowing X Salary.
d. 7% interest will be allowed on partners fixed capital.
e. 5% interest will be charged on partners annual drawings.
f. The fixed capitals of X and Y are Rs. 2, 00, 000 and Rs. 1, 60, 000 respectively. Their annual
drawings were Rs. 32, 000 and Rs. 28, 000 respectively.
The net profit for the year ending March, 2011 amounted to Rs. 80, 000.
Prepare Profit and Loss Appropriation Account.      3

Q 3: A and B are partners in a firm sharing profits in the ratio of 2:1. Following is the balance sheet of the
firm as on 31
st
December, 2004:
Liabilities Rs. Assets  Rs.
Aâ€™s Capital
Bâ€™s Capital
Creditors
1, 00, 000
35, 000
40, 000
Drawings:
A 10, 000
B 5, 000
Sundry Assets

15, 000
1, 60, 000
1, 75, 000  1, 75, 000
Profit for the year 2004 Rs. 30, 000 was divided between the partners in the agreed ratio, but interest
on capital at 9% p.a. and on drawings at 12% p.a. was inadvertently ignored. Adjust the interest.
Q 4: What is Drawings against Capital?       1
Q 5: Why it is better to make a partnership agreement in writing?    1
Q 6: A, B and C were partners. Their capitals were A â€“ Rs. 30, 000, B â€“ Rs. 20, 000 and C â€“ Rs. 10, 000
respectively. According to the partnership Deed, they were entitled to an interest on capital at 5%
p.a. In addition B was also entitled to draw a salary of Rs. 500 per month. C was entitled to a
commission of 5% on the profits after charging the interest on capital, but before charging the salary
payable to B. The net profits for the year were Rs. 30, 000 distributed in the ratio of capitals without
providing for any of the above adjustments. The profits were to be shared in the ratio of 5:2:3.
Pass the necessary adjustment entry showing the workings clearly.    6

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
PUNEET COLLEGE
TEST NO â€“ 1 (2013 â€“ 14)
ACCOUNTING FOR PARTNERSHIP FIRMS
19
TH
APRIL, 13
TIME â€“ 1 Hr 30 Min            SET â€“ 2            MM ? 23
Q 1: The partnership agreement between Maneesh and Girish provides that
a. Profits will be shared equally.
b. Maneesh will be allowed a salary of Rs. 400 p.m.
c. Girish who manages the sales department will be allowed a commission equal to 10% of the net
profit after allowing Maneeshâ€™s salary.
d. 7% interest will be allowed on partnerâ€™s fixed capital.
e. 5% interest will be charged on partnerâ€™s annual drawings.
f. The fixed capitals of Maneesh and Girish are Rs. 1, 00, 000 and Rs. 80, 000 respectively. Their
annual drawings were Rs. 16, 000 and Rs. 14, 000 respectively. The net profit for the year ending
March 31, 2002 amounted to Rs. 40, 000.
Prepare Profit and Loss Appropriation Account.      3
Q 2: The capital accounts of P, Q and R stood at Rs. 10, 000 Rs. 7, 500 and Rs. 5, 000 respectively after the
necessary adjustments in respect of the Drawings and the Net Profit for the year ended 31
st

December, 2001. It was subsequently ascertained that 5% interest on capital and on the drawings of
each partner had been omitted. The drawings of the partners have been P â€“ Rs. 1, 000; Q â€“ Rs. 750
and R â€“ Rs. 600. The interest on these amounted to Rs. 20, Rs. 15 and Rs. 7.50 respectively. The
profit for the year as already adjusted amounted to Rs. 5, 000. The partners share profits in
proportions of 2:2:1. Give the necessary journal entries for the above adjustment and show your
workings clearly.         6
Q 3: A, B and C are partners in a firm. On 1.1.1998 their capitals stood at Rs. 50, 000, Rs. 25, 000 and Rs.
25, 000 respectively. As per the provision of the partnership deed:
a. C was entitled for a salary of Rs. 1, 000 p.m.
b. Partners were entitled to interest on capital at 5% p.a.
c. Profits were to be shared in the ratios of capitals.
The net profit for the year 1998 of Rs. 33, 000 was divided equally without providing for the above
terms.
Pass the adjustment entry to rectify the above error.     6
Q 4: Shall the interest on loan given by partner to the firm to be paid if there are losses?  1
Q 5: What is drawings against profits?        1
Q 6: A, B and C were partners in a firm. On 1
st
April, 2008 their fixed capitals stood at Rs. 50, 000;
Rs. 25, 000 and Rs. 25, 000 respectively.
As per the provisions of the Partnership Deed:
a. B was entitled for a salary of Rs. 5, 000 p.a.
b. All the partners were entitled to interest on capital @ 5% p.a.
c. Profits were to be shared in the ratio of capitals.
The net profit for the year ended 31
st
March, 2009 of Rs. 33, 000 and 31
st
March, 2010 of Rs. 45, 000,
was divided equally without providing for the above terms.
Pass an adjustment Journal entry to rectify the above error.    6

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
TEST NO â€“ 1 SET â€“ 1 SOLUTION (19
TH
April, 2013)
Ans 1: Dr.    Profit or Loss Appropriation A/c             Cr.
Particulars Rs. Particulars Rs.
To Interest on Capital:
X Capital
Y Capital
Z Capital
Profit

1, 200
1, 050
870
57, 410
Interest on drawings
X Capital
Y Capital
Z Capital
60, 000

250
180
100
60, 530  60, 530
Opening Capital
X Rs. Y Rs. Z Rs.
Closing Capital
+ Drawings
40, 000
10, 000
30, 000
7, 500
20, 000
4, 500

-Profit
50, 000
30, 000
37, 500
20, 000
24, 500
10, 000
20, 000 17, 500 14, 500
Interest on Capital
Profit
Interest on Drawing
1, 200
28, 705
(250)
1, 050
19, 133.67
(180)
870
9, 568.33
(100)

29, 655
30, 000
20, 006.67
20, 000.00
10, 338.33
10, 000.00
345 (Dr.) 6.67 (Cr.) 338.33 (Cr.)
Journal
X Capital Dr. 345
To Y capital       6.67
To Z capital  338.33

Ans 2:     P & L Appropriation A/c
Particulars Rs. Particulars Rs.
To Salary X current
To Commission
Y current (80,000+9,600) X 10%
To Interest on capital:
X current
Y current
To profit
X current
Y current
9, 600

7, 040

14, 000
11, 200

20, 580
20, 580
By Net Profit
By Interest on drawing
X current
Y current
80, 000

1, 600
1, 400
83, 000  83, 000

Ans 3: Closing Capital 1, 00, 000 35, 000
-Profit      20, 000 10, 000
Opening Capital    80, 000 25, 000

Rs.  Rs.
To Interest on Capital:
A Capital
B Capital
Profit

7, 200
2, 250
21, 450
By interest on drawings:
A
B
30, 000

600
300
30, 900  30, 900

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
A         B
Interest on Capital    7, 200    7, 250
Profit     14, 300    7, 150
21, 500    9, 400
Loss Interest on drawings       600        300
Amount to be Cr.  20, 900    9, 100
Amount already Cr.  20, 000  10, 000
900 (Cr.)       900 (Dr.)
Journal
B Capital Dr. 900
To A Capital  900.

Ans 6:     Assuming Capital is Fixed
Rs.  Rs.
To Interest on Capital:
A Capital Current
B Capital Current
C Capital Current
Commission Current
Salary B Current
Profit:
A Current
B Current
C Current

1, 500
1, 000
500
1, 350
6, 000

9, 825
3, 930
5, 895
By NP (already Cr.) (15+10+5) 30, 000,
30, 000  30, 000
A Rs.  B Rs.  C Rs.
Interest on Capital 1, 500  1, 000      500
Commission   â€¦â€¦..  â€¦â€¦.  1, 350
Salary   â€¦â€¦..  6, 000  â€¦â€¦..
Profit    9, 825  3, 930  5, 895
Amount to be Cr.    11, 325               10, 930  7, 745
Amount already Cr. 15, 000  10, 000  5, 000
3, 675        930  2, 745

A current Dr. 3, 675
To B Current      930
To C current  2, 745

PUNEET COLLEGE                                   PKL|CHD                           98155 â€“ 00062                 www.facebook.com/puneetcollege
TEST NO â€“ 1 SET â€“ 2 SOLUTION (19
th
April, 2013)
Ans 1:
Particulars Rs. Particulars Rs.
To salary Maneesh current
To commission
Girish current (35, 200 X 10/100)
To Interest on Capital
M current
G current
To profit
M Current A/c
G Current A/c
4, 800

3, 520

7, 000
5, 600

10, 290
10, 290
By Net Profit
By Interest on drawing
M Current
G Current
40, 000

800
700
41, 500  41, 500
Ans 2:
P Rs. Q Rs. R Rs.
Closing Capital
+ Drawings
10, 000
1, 000
7, 500
750
5, 000
600

-Profits
11, 000
2, 000
8, 250
2, 000
5, 600
1, 000
Opening Capitals   9, 000   6, 250   4, 600

Rs.  Rs.
Interest on Capital:
P
Q
R
Profit:
P
Q
R

450.0
312.5
230.0

1, 620
1, 620
810
Interest on Drawing:
P
Q
R
5, 000.0

20.0
15.0
7.5
5, 042.5  5, 042.5
P Rs. Q Rs. R Rs.
Interest on Capital
Profit
450
1, 620
312.5
1, 620.0
230
810

Interest on drawings
2, 070
20
1, 932.5
15.0
1, 040
7.5
Amount to be Cr.
2, 050
2, 000
1, 917.5
2, 000.0
1, 032.5
1, 000.0
50 (Cr.)        82.5 (Dr.)        32.5 (Cr.)
Q Capital Dr. 82.50
To P Capital  50.00
To R Capital  32.50
Ans 3:
Rs.  Rs.
Salary C
Interest on Capital:
A
B
C
Profit:
A
B
12, 000

2, 500
1, 250
1, 250

8, 000
4, 000
(11, 000 + 11, 000 + 11, 000)

33, 000
```
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