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

 Page 1


 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
TEST NO – 1 (2013 – 14) 
ACCOUNTING FOR PARTNERSHIP FIRMS 
 19
TH
 APRIL, 13 
TIME – 1 Hr 30 Min            SET – 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 partners’ 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. 
A’s Capital  
B’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. 
Pass adjustment entry.         6 
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 – Rs. 30, 000, B – Rs. 20, 000 and C – 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 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
TEST NO – 1 (2013 – 14) 
ACCOUNTING FOR PARTNERSHIP FIRMS 
 19
TH
 APRIL, 13 
TIME – 1 Hr 30 Min            SET – 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 partners’ 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. 
A’s Capital  
B’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. 
Pass adjustment entry.         6 
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 – Rs. 30, 000, B – Rs. 20, 000 and C – 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 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
TEST NO – 1 (2013 – 14) 
ACCOUNTING FOR PARTNERSHIP FIRMS 
 19
TH
 APRIL, 13 
TIME – 1 Hr 30 Min            SET – 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 Maneesh’s salary. 
d. 7% interest will be allowed on partner’s fixed capital. 
e. 5% interest will be charged on partner’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 – Rs. 1, 000; Q – Rs. 750 
and R – 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 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
TEST NO – 1 (2013 – 14) 
ACCOUNTING FOR PARTNERSHIP FIRMS 
 19
TH
 APRIL, 13 
TIME – 1 Hr 30 Min            SET – 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 partners’ 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. 
A’s Capital  
B’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. 
Pass adjustment entry.         6 
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 – Rs. 30, 000, B – Rs. 20, 000 and C – 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 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
TEST NO – 1 (2013 – 14) 
ACCOUNTING FOR PARTNERSHIP FIRMS 
 19
TH
 APRIL, 13 
TIME – 1 Hr 30 Min            SET – 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 Maneesh’s salary. 
d. 7% interest will be allowed on partner’s fixed capital. 
e. 5% interest will be charged on partner’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 – Rs. 1, 000; Q – Rs. 750 
and R – 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 – 00062                 www.facebook.com/puneetcollege 
TEST NO – 1 SET – 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 
Net Profit (already Cr.) (3+2+1) 
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 
Table Showing Adjustment 
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 NP (already Cr.) (20+30) 
By interest on drawings: 
A 
B 
30, 000 
 
      600 
      300 
 30, 900  30, 900 
  
Page 4


 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
TEST NO – 1 (2013 – 14) 
ACCOUNTING FOR PARTNERSHIP FIRMS 
 19
TH
 APRIL, 13 
TIME – 1 Hr 30 Min            SET – 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 partners’ 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. 
A’s Capital  
B’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. 
Pass adjustment entry.         6 
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 – Rs. 30, 000, B – Rs. 20, 000 and C – 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 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
TEST NO – 1 (2013 – 14) 
ACCOUNTING FOR PARTNERSHIP FIRMS 
 19
TH
 APRIL, 13 
TIME – 1 Hr 30 Min            SET – 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 Maneesh’s salary. 
d. 7% interest will be allowed on partner’s fixed capital. 
e. 5% interest will be charged on partner’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 – Rs. 1, 000; Q – Rs. 750 
and R – 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 – 00062                 www.facebook.com/puneetcollege 
TEST NO – 1 SET – 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 
Net Profit (already Cr.) (3+2+1) 
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 
Table Showing Adjustment 
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 NP (already Cr.) (20+30) 
By interest on drawings: 
A 
B 
30, 000 
 
      600 
      300 
 30, 900  30, 900 
  
 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
Table showing Adjustment 
           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 
 Table Showing Adjustment  
    A Rs.  B Rs.  C Rs. 
 Interest on Capital 1, 500  1, 000      500 
 Commission   ……..  …….  1, 350 
 Salary   ……..  6, 000  …….. 
 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 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
TEST NO – 1 (2013 – 14) 
ACCOUNTING FOR PARTNERSHIP FIRMS 
 19
TH
 APRIL, 13 
TIME – 1 Hr 30 Min            SET – 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 partners’ 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. 
A’s Capital  
B’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. 
Pass adjustment entry.         6 
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 – Rs. 30, 000, B – Rs. 20, 000 and C – 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 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
TEST NO – 1 (2013 – 14) 
ACCOUNTING FOR PARTNERSHIP FIRMS 
 19
TH
 APRIL, 13 
TIME – 1 Hr 30 Min            SET – 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 Maneesh’s salary. 
d. 7% interest will be allowed on partner’s fixed capital. 
e. 5% interest will be charged on partner’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 – Rs. 1, 000; Q – Rs. 750 
and R – 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 – 00062                 www.facebook.com/puneetcollege 
TEST NO – 1 SET – 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 
Net Profit (already Cr.) (3+2+1) 
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 
Table Showing Adjustment 
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 NP (already Cr.) (20+30) 
By interest on drawings: 
A 
B 
30, 000 
 
      600 
      300 
 30, 900  30, 900 
  
 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
Table showing Adjustment 
           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 
 Table Showing Adjustment  
    A Rs.  B Rs.  C Rs. 
 Interest on Capital 1, 500  1, 000      500 
 Commission   ……..  …….  1, 350 
 Salary   ……..  6, 000  …….. 
 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 – 00062                 www.facebook.com/puneetcollege 
TEST NO – 1 SET – 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 
Net Profit (already Cr.) (2+2+1) 
Interest on Drawing: 
P 
Q 
R 
5, 000.0 
 
       20.0 
       15.0 
         7.5 
 5, 042.5  5, 042.5 
Table Showing Adjustment 
 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. 
Amount already 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 
By Net Profit (already cr.)  
(11, 000 + 11, 000 + 11, 000) 
 
33, 000 
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