Revision Test - Accounting Partnership Firms Reconstitution Class 12 Notes | EduRev

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

 Page 1


 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
REVISION TEST NO – 3 (2013 – 14) 
PARTNERSHIP–BASICS &SHARE CAPITAL  
24
TH
 DEC, 13 
TIME – 1 Hr 15 Min            SET – 1            MM ? 39 
 
Q 1: What is the purpose of allowing interest on partners capital?    1 
Q 2: Name the account which is prepared after P & L A/c in accounting for partnership.  1 
Q 3: A and B jointly purchased a plot of Land. Will they be called partners?   1 
Q 4: If the drawings are made at the beginning of every quarter then interest will be calculated for what 
average period?          1 
Q 5: A advanced to firm a loan of Rs. 1, 00, 000 at 8% p.a. Profit is Rs. 5, 000 before providing interest on 
loan. What amount A will get as a interest on his loan?     1 
Q 6: State the provision of partnership act relating to the remuneration to partners if there is no 
partnership deed.         1 
Q 7: Any change in partnership agreement without discontinuation of firm is known as?  1 
Q 8: It is difficult to place an exact value of goodwill – explain.     1 
 
Q 9: A and B are partners sharing profits and losses in the ratio of 3:2 with capital of Rs. 60, 000 and Rs. 
1, 00, 000 respectively. The partnership deed provides for interest on capital @ 6% p.a. The profits 
for the year are Rs. 6, 400. Pass journal entries to record the above effects.   4 
 
Q 10: On 1
st
 January 2009 the balance of S and T were as follows: 
            Capital A/c Rs.          Current A/c Rs.  
  S  4, 00, 000  18, 000 
  T  2, 20, 000  8, 000 (Dr.) 
Profit sharing ratio is 3:5. Interest on drawings for S and T Rs. 600 and Rs. 250. T has given a loan to 
firm on 1
st
 August, 2009 of Rs. 60, 000. During 2009, the Divisible profit was Rs. 80, 000. The 
drawings of S and T were Rs. 40, 000 and Rs. 35, 000 respectively. The interest on capital of S and T 
were Rs. 20, 000 and Rs. 11, 000. S was entitled for remuneration of Rs. 1, 200 p.m. Prepare current 
Accounts of the partners.         4 
 
Q 11: Anit, Sunil and Ravinder entered into a partnership on 1
st
 January 2011 to share profits in the ratio 
of 2:1:1. It was provided in the deed that Ravinder’s share of profit will not be less than Rs. 70, 000 
per annum. The losses for the year ended 31
st
 December 2011 were Rs. 2, 00, 000 before allowing 
interest Rs. 8, 000 on Anit’s Loan which is due for the current year. 
 Prepare Profit and Loss Appropriation Account for the year ended 31
st
 December 2011. 4 
 
Q 12: A, B and C are partners sharing 5:3:2. As per the provision of the partnership deed. 
1. A and C were entitled to a salary of Rs. 3, 000 p.m. each. 
2. B was entitled to a commission of Rs. 36, 000. 
Without providing the above adjustments the profits Rs. 3, 00,000 was divided among the partners in 
the ratio of 3:5:2. Pass necessary journal entry for the above adjustments in the books of the firm.    4 
Page 2


 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
REVISION TEST NO – 3 (2013 – 14) 
PARTNERSHIP–BASICS &SHARE CAPITAL  
24
TH
 DEC, 13 
TIME – 1 Hr 15 Min            SET – 1            MM ? 39 
 
Q 1: What is the purpose of allowing interest on partners capital?    1 
Q 2: Name the account which is prepared after P & L A/c in accounting for partnership.  1 
Q 3: A and B jointly purchased a plot of Land. Will they be called partners?   1 
Q 4: If the drawings are made at the beginning of every quarter then interest will be calculated for what 
average period?          1 
Q 5: A advanced to firm a loan of Rs. 1, 00, 000 at 8% p.a. Profit is Rs. 5, 000 before providing interest on 
loan. What amount A will get as a interest on his loan?     1 
Q 6: State the provision of partnership act relating to the remuneration to partners if there is no 
partnership deed.         1 
Q 7: Any change in partnership agreement without discontinuation of firm is known as?  1 
Q 8: It is difficult to place an exact value of goodwill – explain.     1 
 
Q 9: A and B are partners sharing profits and losses in the ratio of 3:2 with capital of Rs. 60, 000 and Rs. 
1, 00, 000 respectively. The partnership deed provides for interest on capital @ 6% p.a. The profits 
for the year are Rs. 6, 400. Pass journal entries to record the above effects.   4 
 
Q 10: On 1
st
 January 2009 the balance of S and T were as follows: 
            Capital A/c Rs.          Current A/c Rs.  
  S  4, 00, 000  18, 000 
  T  2, 20, 000  8, 000 (Dr.) 
Profit sharing ratio is 3:5. Interest on drawings for S and T Rs. 600 and Rs. 250. T has given a loan to 
firm on 1
st
 August, 2009 of Rs. 60, 000. During 2009, the Divisible profit was Rs. 80, 000. The 
drawings of S and T were Rs. 40, 000 and Rs. 35, 000 respectively. The interest on capital of S and T 
were Rs. 20, 000 and Rs. 11, 000. S was entitled for remuneration of Rs. 1, 200 p.m. Prepare current 
Accounts of the partners.         4 
 
Q 11: Anit, Sunil and Ravinder entered into a partnership on 1
st
 January 2011 to share profits in the ratio 
of 2:1:1. It was provided in the deed that Ravinder’s share of profit will not be less than Rs. 70, 000 
per annum. The losses for the year ended 31
st
 December 2011 were Rs. 2, 00, 000 before allowing 
interest Rs. 8, 000 on Anit’s Loan which is due for the current year. 
 Prepare Profit and Loss Appropriation Account for the year ended 31
st
 December 2011. 4 
 
Q 12: A, B and C are partners sharing 5:3:2. As per the provision of the partnership deed. 
1. A and C were entitled to a salary of Rs. 3, 000 p.m. each. 
2. B was entitled to a commission of Rs. 36, 000. 
Without providing the above adjustments the profits Rs. 3, 00,000 was divided among the partners in 
the ratio of 3:5:2. Pass necessary journal entry for the above adjustments in the books of the firm.    4 
 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
Q 13: Suggest any four personal values of the partners which according to you are necessary for the 
successful operation of a partnership firm for a long time.     2 
 
Q 14: Saif and Kareem are partners in a firm. Their profits for the last four years are: 
Year ended 31.3.2010 31.3.2011 31.3.2012 31.3.2013 
Profit Rs. 3, 00, 000 Rs. 4, 00, 000 Rs. 4, 50, 000 Rs. 5, 50, 000 
  
1. Calculate the value of firm’s goodwill on the basis of 2½ years purchase of the average profit of 
the last four years; and 
2. Suggest any six entrepreneurial values which enhance the value of goodwill of a firm. 2 + 3 =5 
 
Q 15: A partnership firm earned net profits during the last three years as follows: 
 
Years Net profit Rs. 
2007 – 2008 
2008 – 2009 
2009 – 2010 
1, 90, 000 
2, 20, 000 
2, 50, 000 
 
The capital employed in the firm throughout the above mentioned period has been Rs. 4, 00, 000. 
Having regard to the risk involved, 15% is considered to be a fair return on the capital. The 
remuneration of all the partners during this period is estimated to be Rs. 1, 00, 000 per annum. 
 
Calculate the value of goodwill on the basis of: 
1. Two year’s purchase of super profits earned on average basis during the above mentioned three 
years and  
2. By Capitalisation method.        4 
 
Q 16: Raman was allotted 400 shares of Rs. 100 each by DLF Ltd. originally issued at a discount of 10% 
per share. He failed to pay final call of Rs. 35. These shares were forfeited and out of these, 200 
shares were reissued to Ajay at Rs. 90 as fully paid up. 
 Journalise the transactions in respect of forfeiture and reissue of shares.   4 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 3


 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
REVISION TEST NO – 3 (2013 – 14) 
PARTNERSHIP–BASICS &SHARE CAPITAL  
24
TH
 DEC, 13 
TIME – 1 Hr 15 Min            SET – 1            MM ? 39 
 
Q 1: What is the purpose of allowing interest on partners capital?    1 
Q 2: Name the account which is prepared after P & L A/c in accounting for partnership.  1 
Q 3: A and B jointly purchased a plot of Land. Will they be called partners?   1 
Q 4: If the drawings are made at the beginning of every quarter then interest will be calculated for what 
average period?          1 
Q 5: A advanced to firm a loan of Rs. 1, 00, 000 at 8% p.a. Profit is Rs. 5, 000 before providing interest on 
loan. What amount A will get as a interest on his loan?     1 
Q 6: State the provision of partnership act relating to the remuneration to partners if there is no 
partnership deed.         1 
Q 7: Any change in partnership agreement without discontinuation of firm is known as?  1 
Q 8: It is difficult to place an exact value of goodwill – explain.     1 
 
Q 9: A and B are partners sharing profits and losses in the ratio of 3:2 with capital of Rs. 60, 000 and Rs. 
1, 00, 000 respectively. The partnership deed provides for interest on capital @ 6% p.a. The profits 
for the year are Rs. 6, 400. Pass journal entries to record the above effects.   4 
 
Q 10: On 1
st
 January 2009 the balance of S and T were as follows: 
            Capital A/c Rs.          Current A/c Rs.  
  S  4, 00, 000  18, 000 
  T  2, 20, 000  8, 000 (Dr.) 
Profit sharing ratio is 3:5. Interest on drawings for S and T Rs. 600 and Rs. 250. T has given a loan to 
firm on 1
st
 August, 2009 of Rs. 60, 000. During 2009, the Divisible profit was Rs. 80, 000. The 
drawings of S and T were Rs. 40, 000 and Rs. 35, 000 respectively. The interest on capital of S and T 
were Rs. 20, 000 and Rs. 11, 000. S was entitled for remuneration of Rs. 1, 200 p.m. Prepare current 
Accounts of the partners.         4 
 
Q 11: Anit, Sunil and Ravinder entered into a partnership on 1
st
 January 2011 to share profits in the ratio 
of 2:1:1. It was provided in the deed that Ravinder’s share of profit will not be less than Rs. 70, 000 
per annum. The losses for the year ended 31
st
 December 2011 were Rs. 2, 00, 000 before allowing 
interest Rs. 8, 000 on Anit’s Loan which is due for the current year. 
 Prepare Profit and Loss Appropriation Account for the year ended 31
st
 December 2011. 4 
 
Q 12: A, B and C are partners sharing 5:3:2. As per the provision of the partnership deed. 
1. A and C were entitled to a salary of Rs. 3, 000 p.m. each. 
2. B was entitled to a commission of Rs. 36, 000. 
Without providing the above adjustments the profits Rs. 3, 00,000 was divided among the partners in 
the ratio of 3:5:2. Pass necessary journal entry for the above adjustments in the books of the firm.    4 
 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
Q 13: Suggest any four personal values of the partners which according to you are necessary for the 
successful operation of a partnership firm for a long time.     2 
 
Q 14: Saif and Kareem are partners in a firm. Their profits for the last four years are: 
Year ended 31.3.2010 31.3.2011 31.3.2012 31.3.2013 
Profit Rs. 3, 00, 000 Rs. 4, 00, 000 Rs. 4, 50, 000 Rs. 5, 50, 000 
  
1. Calculate the value of firm’s goodwill on the basis of 2½ years purchase of the average profit of 
the last four years; and 
2. Suggest any six entrepreneurial values which enhance the value of goodwill of a firm. 2 + 3 =5 
 
Q 15: A partnership firm earned net profits during the last three years as follows: 
 
Years Net profit Rs. 
2007 – 2008 
2008 – 2009 
2009 – 2010 
1, 90, 000 
2, 20, 000 
2, 50, 000 
 
The capital employed in the firm throughout the above mentioned period has been Rs. 4, 00, 000. 
Having regard to the risk involved, 15% is considered to be a fair return on the capital. The 
remuneration of all the partners during this period is estimated to be Rs. 1, 00, 000 per annum. 
 
Calculate the value of goodwill on the basis of: 
1. Two year’s purchase of super profits earned on average basis during the above mentioned three 
years and  
2. By Capitalisation method.        4 
 
Q 16: Raman was allotted 400 shares of Rs. 100 each by DLF Ltd. originally issued at a discount of 10% 
per share. He failed to pay final call of Rs. 35. These shares were forfeited and out of these, 200 
shares were reissued to Ajay at Rs. 90 as fully paid up. 
 Journalise the transactions in respect of forfeiture and reissue of shares.   4 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
REVISION TEST NO – 3 (2013 – 14) 
PARTNERSHIP–BASICS &SHARE CAPITAL 
24
TH
 DEC, 13 
TIME – 1 Hr 15 Min            SET – 2            MM ? 39 
 
Q 1: Why interest on drawing is Charged?       1 
Q 2: Name the document which contains terms and conditions of partnership.   1 
Q 3: A, B and C desire that D should not participate in the conduct of the business of the firm. Can they 
prevent D?          1 
Q 4: Differentiate between permanent drawings and temporary drawings.   1 
 
Q 5: What is difference between interest on Partners loan and interest on partners Capital? 1 
Q 6: Give any two features of partner’s Current Account?     1 
 
Q 7: Mention the circumstances under which a firm is reconstituted.    1 
Q 8: What is meant by number of years purchase at the time of valuation of goodwill?  1 
 
Q 9: On 1
st
 January 2010 the balance of X and y were as follows: 
    Capital A/c Rs.  Current A/c Rs. 
  X  2, 00, 000  9, 000 (Cr) 
  Y  1, 10, 000  4, 000 (Dr) 
Profit sharing ratio is 5:3. Interest on drawings for X and Y Rs. 300 and Rs. 125 respectively Y has 
given a loan to firm on 1
st
 July, 2010 of Rs. 40, 000. During 2010, the divisible profit was Rs. 60, 000. 
The drawings of X and Y were Rs. 20, 000 and Rs. 15, 000 respectively. The interest on Capital of X 
and Y were Rs. 5, 000 and Rs. 4, 000. X was entitled for remuneration of Rs. 8, 000 p.a. prepare 
Current Account of the partners.        4 
 
Q 10: Said and Tension are partners sharing profits and losses in the ratio of 2:1 with Capital of Rs. 30, 000 
and Rs. 50, 000 respectively. The partnership deed provides for interest on Capital @ 5% p.a. and 
the profits for the year are Rs. 3, 000. Pass Journal entries to record the above effects. 4 
 
Q 11: X, Y and Z are partners sharing 3:3:2. As per the provision of the partnership deed: 
1. X and Z were entitled to a salary of Rs. 5, 000 per month each. 
2. Y was entitled to a commission of Rs. 60, 000. 
Without providing the above adjustments the profits Rs. 5, 00, 000 was divided among the partners 
in the ratio of 3:5:2. Pass necessary Journal entry for the above adjustments in the Books of the firm.  
           4 
Q 12: Ram and Sham are partners sharing in the ratio of 3:2. On January 1, 2010 they employed Karan as 
their manager to whom they paid a salary of Rs. 450 p.m. Karan had deposited Rs. 12, 000 on which 
interest was payable @ 9% p.a. At the end of 2010 (after division of the year profit) it was decided 
then Karan should be treated as partner with effect from 1
st
 January, 2010. With 1/6
th
 share of 
profits. His deposit being considered as capital but will not carry any interest. The firm’s profit 
during the year was Rs. 12, 000. Record the necessary journal entry to give an effect to the above.     4 
Page 4


 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
REVISION TEST NO – 3 (2013 – 14) 
PARTNERSHIP–BASICS &SHARE CAPITAL  
24
TH
 DEC, 13 
TIME – 1 Hr 15 Min            SET – 1            MM ? 39 
 
Q 1: What is the purpose of allowing interest on partners capital?    1 
Q 2: Name the account which is prepared after P & L A/c in accounting for partnership.  1 
Q 3: A and B jointly purchased a plot of Land. Will they be called partners?   1 
Q 4: If the drawings are made at the beginning of every quarter then interest will be calculated for what 
average period?          1 
Q 5: A advanced to firm a loan of Rs. 1, 00, 000 at 8% p.a. Profit is Rs. 5, 000 before providing interest on 
loan. What amount A will get as a interest on his loan?     1 
Q 6: State the provision of partnership act relating to the remuneration to partners if there is no 
partnership deed.         1 
Q 7: Any change in partnership agreement without discontinuation of firm is known as?  1 
Q 8: It is difficult to place an exact value of goodwill – explain.     1 
 
Q 9: A and B are partners sharing profits and losses in the ratio of 3:2 with capital of Rs. 60, 000 and Rs. 
1, 00, 000 respectively. The partnership deed provides for interest on capital @ 6% p.a. The profits 
for the year are Rs. 6, 400. Pass journal entries to record the above effects.   4 
 
Q 10: On 1
st
 January 2009 the balance of S and T were as follows: 
            Capital A/c Rs.          Current A/c Rs.  
  S  4, 00, 000  18, 000 
  T  2, 20, 000  8, 000 (Dr.) 
Profit sharing ratio is 3:5. Interest on drawings for S and T Rs. 600 and Rs. 250. T has given a loan to 
firm on 1
st
 August, 2009 of Rs. 60, 000. During 2009, the Divisible profit was Rs. 80, 000. The 
drawings of S and T were Rs. 40, 000 and Rs. 35, 000 respectively. The interest on capital of S and T 
were Rs. 20, 000 and Rs. 11, 000. S was entitled for remuneration of Rs. 1, 200 p.m. Prepare current 
Accounts of the partners.         4 
 
Q 11: Anit, Sunil and Ravinder entered into a partnership on 1
st
 January 2011 to share profits in the ratio 
of 2:1:1. It was provided in the deed that Ravinder’s share of profit will not be less than Rs. 70, 000 
per annum. The losses for the year ended 31
st
 December 2011 were Rs. 2, 00, 000 before allowing 
interest Rs. 8, 000 on Anit’s Loan which is due for the current year. 
 Prepare Profit and Loss Appropriation Account for the year ended 31
st
 December 2011. 4 
 
Q 12: A, B and C are partners sharing 5:3:2. As per the provision of the partnership deed. 
1. A and C were entitled to a salary of Rs. 3, 000 p.m. each. 
2. B was entitled to a commission of Rs. 36, 000. 
Without providing the above adjustments the profits Rs. 3, 00,000 was divided among the partners in 
the ratio of 3:5:2. Pass necessary journal entry for the above adjustments in the books of the firm.    4 
 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
Q 13: Suggest any four personal values of the partners which according to you are necessary for the 
successful operation of a partnership firm for a long time.     2 
 
Q 14: Saif and Kareem are partners in a firm. Their profits for the last four years are: 
Year ended 31.3.2010 31.3.2011 31.3.2012 31.3.2013 
Profit Rs. 3, 00, 000 Rs. 4, 00, 000 Rs. 4, 50, 000 Rs. 5, 50, 000 
  
1. Calculate the value of firm’s goodwill on the basis of 2½ years purchase of the average profit of 
the last four years; and 
2. Suggest any six entrepreneurial values which enhance the value of goodwill of a firm. 2 + 3 =5 
 
Q 15: A partnership firm earned net profits during the last three years as follows: 
 
Years Net profit Rs. 
2007 – 2008 
2008 – 2009 
2009 – 2010 
1, 90, 000 
2, 20, 000 
2, 50, 000 
 
The capital employed in the firm throughout the above mentioned period has been Rs. 4, 00, 000. 
Having regard to the risk involved, 15% is considered to be a fair return on the capital. The 
remuneration of all the partners during this period is estimated to be Rs. 1, 00, 000 per annum. 
 
Calculate the value of goodwill on the basis of: 
1. Two year’s purchase of super profits earned on average basis during the above mentioned three 
years and  
2. By Capitalisation method.        4 
 
Q 16: Raman was allotted 400 shares of Rs. 100 each by DLF Ltd. originally issued at a discount of 10% 
per share. He failed to pay final call of Rs. 35. These shares were forfeited and out of these, 200 
shares were reissued to Ajay at Rs. 90 as fully paid up. 
 Journalise the transactions in respect of forfeiture and reissue of shares.   4 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
REVISION TEST NO – 3 (2013 – 14) 
PARTNERSHIP–BASICS &SHARE CAPITAL 
24
TH
 DEC, 13 
TIME – 1 Hr 15 Min            SET – 2            MM ? 39 
 
Q 1: Why interest on drawing is Charged?       1 
Q 2: Name the document which contains terms and conditions of partnership.   1 
Q 3: A, B and C desire that D should not participate in the conduct of the business of the firm. Can they 
prevent D?          1 
Q 4: Differentiate between permanent drawings and temporary drawings.   1 
 
Q 5: What is difference between interest on Partners loan and interest on partners Capital? 1 
Q 6: Give any two features of partner’s Current Account?     1 
 
Q 7: Mention the circumstances under which a firm is reconstituted.    1 
Q 8: What is meant by number of years purchase at the time of valuation of goodwill?  1 
 
Q 9: On 1
st
 January 2010 the balance of X and y were as follows: 
    Capital A/c Rs.  Current A/c Rs. 
  X  2, 00, 000  9, 000 (Cr) 
  Y  1, 10, 000  4, 000 (Dr) 
Profit sharing ratio is 5:3. Interest on drawings for X and Y Rs. 300 and Rs. 125 respectively Y has 
given a loan to firm on 1
st
 July, 2010 of Rs. 40, 000. During 2010, the divisible profit was Rs. 60, 000. 
The drawings of X and Y were Rs. 20, 000 and Rs. 15, 000 respectively. The interest on Capital of X 
and Y were Rs. 5, 000 and Rs. 4, 000. X was entitled for remuneration of Rs. 8, 000 p.a. prepare 
Current Account of the partners.        4 
 
Q 10: Said and Tension are partners sharing profits and losses in the ratio of 2:1 with Capital of Rs. 30, 000 
and Rs. 50, 000 respectively. The partnership deed provides for interest on Capital @ 5% p.a. and 
the profits for the year are Rs. 3, 000. Pass Journal entries to record the above effects. 4 
 
Q 11: X, Y and Z are partners sharing 3:3:2. As per the provision of the partnership deed: 
1. X and Z were entitled to a salary of Rs. 5, 000 per month each. 
2. Y was entitled to a commission of Rs. 60, 000. 
Without providing the above adjustments the profits Rs. 5, 00, 000 was divided among the partners 
in the ratio of 3:5:2. Pass necessary Journal entry for the above adjustments in the Books of the firm.  
           4 
Q 12: Ram and Sham are partners sharing in the ratio of 3:2. On January 1, 2010 they employed Karan as 
their manager to whom they paid a salary of Rs. 450 p.m. Karan had deposited Rs. 12, 000 on which 
interest was payable @ 9% p.a. At the end of 2010 (after division of the year profit) it was decided 
then Karan should be treated as partner with effect from 1
st
 January, 2010. With 1/6
th
 share of 
profits. His deposit being considered as capital but will not carry any interest. The firm’s profit 
during the year was Rs. 12, 000. Record the necessary journal entry to give an effect to the above.     4 
 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
Q 13: Suggest any four entrepreneurial value firm needs to follow for its success full operations for a long 
time.           2 
 
Q 14: After pursuing their Acting course Amit suggested her classmate Jaya to form a partnership for 
giving guidance to children of middle class families regarding future in media and entertainment 
industry. The proposal has been accepted by Jaya and She has requested to admit her friend Rekha, 
from poor family to be a partner of the firm. All of them agree to form a partnership but they were 
unable to provide sufficient funds. Amit therefore persuaded a rich friend of him, Abhijit, who came 
from London to be a partner and contribute the required capital.  
 
All of them formed a partnership on the following terms: 
1. Amit will contribute Rs. 5, 00, 000 Jaya Rs. 4, 00, 000; Abhijit Rs. 20, 00, 000 and Rekha will be 
partner without capital. 
2. Profits will be shared equally. 
3. Interest on capital will be allowed @ 6% p.a. The profits of the firm for the year ended 31
st
 
March, 2013 were Rs. 5, 00, 000. 
 
1. Prepare Profit and Loss Appropriation Account. 
2. Identify any four values which according to year motivated them to form the partnership firm. 
 
 
Q 15: A and B are partners in a firm sharing profits in the ratio of 3:2. They admit C into the partnership 
firm for 1/6
th
 share of the future profits. The goodwill of the firm is valued at Rs. 18, 000 on the basis 
of 3 year’s purchase of the average super profits of the firm. The firm had assets worth Rs. 15 lakhs 
and liabilities worth Rs. 12 lakhs. The normal earning capacity of such firms is expected to be 10% 
p.a. 
  
 Find: 
1. Super profits of the firm. 
2. Average profits of the firm  
3. Total profits earned by the firm during the last 3 years.    4 
 
Q 16: A company forfeited 200 shares of Rs. 10 each, issued at a discount of 5%, for non – payment of the 
final call of Rs. 3 per share. 150 of these shares were reissued at Rs. 8.50 per share, fully paid. Pass 
journal entries and also show how ‘share capital’ will appear in the Balance Sheet Also prepare notes 
to accounts for the same.         4 
 
 
 
 
 
 
 
 
 
 
Page 5


 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
REVISION TEST NO – 3 (2013 – 14) 
PARTNERSHIP–BASICS &SHARE CAPITAL  
24
TH
 DEC, 13 
TIME – 1 Hr 15 Min            SET – 1            MM ? 39 
 
Q 1: What is the purpose of allowing interest on partners capital?    1 
Q 2: Name the account which is prepared after P & L A/c in accounting for partnership.  1 
Q 3: A and B jointly purchased a plot of Land. Will they be called partners?   1 
Q 4: If the drawings are made at the beginning of every quarter then interest will be calculated for what 
average period?          1 
Q 5: A advanced to firm a loan of Rs. 1, 00, 000 at 8% p.a. Profit is Rs. 5, 000 before providing interest on 
loan. What amount A will get as a interest on his loan?     1 
Q 6: State the provision of partnership act relating to the remuneration to partners if there is no 
partnership deed.         1 
Q 7: Any change in partnership agreement without discontinuation of firm is known as?  1 
Q 8: It is difficult to place an exact value of goodwill – explain.     1 
 
Q 9: A and B are partners sharing profits and losses in the ratio of 3:2 with capital of Rs. 60, 000 and Rs. 
1, 00, 000 respectively. The partnership deed provides for interest on capital @ 6% p.a. The profits 
for the year are Rs. 6, 400. Pass journal entries to record the above effects.   4 
 
Q 10: On 1
st
 January 2009 the balance of S and T were as follows: 
            Capital A/c Rs.          Current A/c Rs.  
  S  4, 00, 000  18, 000 
  T  2, 20, 000  8, 000 (Dr.) 
Profit sharing ratio is 3:5. Interest on drawings for S and T Rs. 600 and Rs. 250. T has given a loan to 
firm on 1
st
 August, 2009 of Rs. 60, 000. During 2009, the Divisible profit was Rs. 80, 000. The 
drawings of S and T were Rs. 40, 000 and Rs. 35, 000 respectively. The interest on capital of S and T 
were Rs. 20, 000 and Rs. 11, 000. S was entitled for remuneration of Rs. 1, 200 p.m. Prepare current 
Accounts of the partners.         4 
 
Q 11: Anit, Sunil and Ravinder entered into a partnership on 1
st
 January 2011 to share profits in the ratio 
of 2:1:1. It was provided in the deed that Ravinder’s share of profit will not be less than Rs. 70, 000 
per annum. The losses for the year ended 31
st
 December 2011 were Rs. 2, 00, 000 before allowing 
interest Rs. 8, 000 on Anit’s Loan which is due for the current year. 
 Prepare Profit and Loss Appropriation Account for the year ended 31
st
 December 2011. 4 
 
Q 12: A, B and C are partners sharing 5:3:2. As per the provision of the partnership deed. 
1. A and C were entitled to a salary of Rs. 3, 000 p.m. each. 
2. B was entitled to a commission of Rs. 36, 000. 
Without providing the above adjustments the profits Rs. 3, 00,000 was divided among the partners in 
the ratio of 3:5:2. Pass necessary journal entry for the above adjustments in the books of the firm.    4 
 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
Q 13: Suggest any four personal values of the partners which according to you are necessary for the 
successful operation of a partnership firm for a long time.     2 
 
Q 14: Saif and Kareem are partners in a firm. Their profits for the last four years are: 
Year ended 31.3.2010 31.3.2011 31.3.2012 31.3.2013 
Profit Rs. 3, 00, 000 Rs. 4, 00, 000 Rs. 4, 50, 000 Rs. 5, 50, 000 
  
1. Calculate the value of firm’s goodwill on the basis of 2½ years purchase of the average profit of 
the last four years; and 
2. Suggest any six entrepreneurial values which enhance the value of goodwill of a firm. 2 + 3 =5 
 
Q 15: A partnership firm earned net profits during the last three years as follows: 
 
Years Net profit Rs. 
2007 – 2008 
2008 – 2009 
2009 – 2010 
1, 90, 000 
2, 20, 000 
2, 50, 000 
 
The capital employed in the firm throughout the above mentioned period has been Rs. 4, 00, 000. 
Having regard to the risk involved, 15% is considered to be a fair return on the capital. The 
remuneration of all the partners during this period is estimated to be Rs. 1, 00, 000 per annum. 
 
Calculate the value of goodwill on the basis of: 
1. Two year’s purchase of super profits earned on average basis during the above mentioned three 
years and  
2. By Capitalisation method.        4 
 
Q 16: Raman was allotted 400 shares of Rs. 100 each by DLF Ltd. originally issued at a discount of 10% 
per share. He failed to pay final call of Rs. 35. These shares were forfeited and out of these, 200 
shares were reissued to Ajay at Rs. 90 as fully paid up. 
 Journalise the transactions in respect of forfeiture and reissue of shares.   4 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
PUNEET COLLEGE 
REVISION TEST NO – 3 (2013 – 14) 
PARTNERSHIP–BASICS &SHARE CAPITAL 
24
TH
 DEC, 13 
TIME – 1 Hr 15 Min            SET – 2            MM ? 39 
 
Q 1: Why interest on drawing is Charged?       1 
Q 2: Name the document which contains terms and conditions of partnership.   1 
Q 3: A, B and C desire that D should not participate in the conduct of the business of the firm. Can they 
prevent D?          1 
Q 4: Differentiate between permanent drawings and temporary drawings.   1 
 
Q 5: What is difference between interest on Partners loan and interest on partners Capital? 1 
Q 6: Give any two features of partner’s Current Account?     1 
 
Q 7: Mention the circumstances under which a firm is reconstituted.    1 
Q 8: What is meant by number of years purchase at the time of valuation of goodwill?  1 
 
Q 9: On 1
st
 January 2010 the balance of X and y were as follows: 
    Capital A/c Rs.  Current A/c Rs. 
  X  2, 00, 000  9, 000 (Cr) 
  Y  1, 10, 000  4, 000 (Dr) 
Profit sharing ratio is 5:3. Interest on drawings for X and Y Rs. 300 and Rs. 125 respectively Y has 
given a loan to firm on 1
st
 July, 2010 of Rs. 40, 000. During 2010, the divisible profit was Rs. 60, 000. 
The drawings of X and Y were Rs. 20, 000 and Rs. 15, 000 respectively. The interest on Capital of X 
and Y were Rs. 5, 000 and Rs. 4, 000. X was entitled for remuneration of Rs. 8, 000 p.a. prepare 
Current Account of the partners.        4 
 
Q 10: Said and Tension are partners sharing profits and losses in the ratio of 2:1 with Capital of Rs. 30, 000 
and Rs. 50, 000 respectively. The partnership deed provides for interest on Capital @ 5% p.a. and 
the profits for the year are Rs. 3, 000. Pass Journal entries to record the above effects. 4 
 
Q 11: X, Y and Z are partners sharing 3:3:2. As per the provision of the partnership deed: 
1. X and Z were entitled to a salary of Rs. 5, 000 per month each. 
2. Y was entitled to a commission of Rs. 60, 000. 
Without providing the above adjustments the profits Rs. 5, 00, 000 was divided among the partners 
in the ratio of 3:5:2. Pass necessary Journal entry for the above adjustments in the Books of the firm.  
           4 
Q 12: Ram and Sham are partners sharing in the ratio of 3:2. On January 1, 2010 they employed Karan as 
their manager to whom they paid a salary of Rs. 450 p.m. Karan had deposited Rs. 12, 000 on which 
interest was payable @ 9% p.a. At the end of 2010 (after division of the year profit) it was decided 
then Karan should be treated as partner with effect from 1
st
 January, 2010. With 1/6
th
 share of 
profits. His deposit being considered as capital but will not carry any interest. The firm’s profit 
during the year was Rs. 12, 000. Record the necessary journal entry to give an effect to the above.     4 
 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
Q 13: Suggest any four entrepreneurial value firm needs to follow for its success full operations for a long 
time.           2 
 
Q 14: After pursuing their Acting course Amit suggested her classmate Jaya to form a partnership for 
giving guidance to children of middle class families regarding future in media and entertainment 
industry. The proposal has been accepted by Jaya and She has requested to admit her friend Rekha, 
from poor family to be a partner of the firm. All of them agree to form a partnership but they were 
unable to provide sufficient funds. Amit therefore persuaded a rich friend of him, Abhijit, who came 
from London to be a partner and contribute the required capital.  
 
All of them formed a partnership on the following terms: 
1. Amit will contribute Rs. 5, 00, 000 Jaya Rs. 4, 00, 000; Abhijit Rs. 20, 00, 000 and Rekha will be 
partner without capital. 
2. Profits will be shared equally. 
3. Interest on capital will be allowed @ 6% p.a. The profits of the firm for the year ended 31
st
 
March, 2013 were Rs. 5, 00, 000. 
 
1. Prepare Profit and Loss Appropriation Account. 
2. Identify any four values which according to year motivated them to form the partnership firm. 
 
 
Q 15: A and B are partners in a firm sharing profits in the ratio of 3:2. They admit C into the partnership 
firm for 1/6
th
 share of the future profits. The goodwill of the firm is valued at Rs. 18, 000 on the basis 
of 3 year’s purchase of the average super profits of the firm. The firm had assets worth Rs. 15 lakhs 
and liabilities worth Rs. 12 lakhs. The normal earning capacity of such firms is expected to be 10% 
p.a. 
  
 Find: 
1. Super profits of the firm. 
2. Average profits of the firm  
3. Total profits earned by the firm during the last 3 years.    4 
 
Q 16: A company forfeited 200 shares of Rs. 10 each, issued at a discount of 5%, for non – payment of the 
final call of Rs. 3 per share. 150 of these shares were reissued at Rs. 8.50 per share, fully paid. Pass 
journal entries and also show how ‘share capital’ will appear in the Balance Sheet Also prepare notes 
to accounts for the same.         4 
 
 
 
 
 
 
 
 
 
 
 
PUNEET COLLEGE                                   PKL|CHD                           98155 – 00062                 www.facebook.com/puneetcollege 
+2 ACC RT – 3(2013 – 2014) PARTNERSHIP BASIC & ISSUE OF SHARES Set 1 (Solution)  
Ans 1: The idea of providing the interest on capital is to compensate those partners who contribute capital 
in excess of what is required as per their profit sharing ratio. 
Ans 2: Profit and Loss Appropriation A/c. 
Ans 3: No, they become the joint owners of the property and not the partners. 
Ans 4: 7½          Ans 5: Rs. 8, 000. 
Ans 6: No Remuneration / Salary. 
Ans 7: Reconstitution of Partnership firm. 
Ans 8: This is because its value may fluctuate from time to time due to changing circumstance which are 
internal and external to business. 
Ans 9: Note: If interest treated as appropriation. 
Particulars Dr. Rs. Cr. Rs. 
Interest on Capital A/c Dr. 
To A’s Capital 
To B’s Capital 
6, 400 
 
 
6, 400 
 
 
6, 400 
 
2, 400 
4, 000 
 
6, 400 
 
 
2, 400 
4, 000 
P & L Appropriation A/c Dr. 
To Interest on Capital 
Or 
Profit and Loss Appropriation  Dr. 
To A Capital 
To B Capital 
 Note: If interest treated as charge. 
Particulars Dr. Rs. Cr. Rs. 
Interest on Capital Dr. 
To A Capital 
To B Capital 
9, 600 
 
 
9, 600 
 
1, 920 
1, 280 
 
 
9, 600 
 
3, 600 
6, 000 
 
9, 600 
 
 
3, 200 
 
 
3, 600 
6, 000 
Profit and Loss A/c Dr. 
To Interest on Capital 
A’s Capital A/c Dr. 
B’s Capital A/c Dr. 
To Profit and Loss A/c 
Or 
Profit and Loss A/c Dr. 
To A Capital 
To B Capital 
Ans 10:      Current Accounts 
 S Rs. T Rs.  S Rs. T Rs. 
To bal b/d 
To drawings 
To interest on draw 
To balance c/d 
……. 
40, 000 
      600 
41, 800 
 
  8, 000 
35, 000 
      250 
19, 250 
By balance b/d 
By interest on capital 
By salary 
By profit 
By interest on loan 
18, 000 
20, 000 
14, 400 
30, 000 
……. 
…… 
11, 000 
….. 
50, 000 
  1, 500 
 82, 400 62, 500  82, 400 62, 500 
 Note: Second Answer of T’s Current A/c Rs. 17, 750. 
Ans 11:   Profit and Loss Appropriation Account for the year ending 1
st
 Jan 2011 
Particulars Amt. Rs. Particulars Amt. Rs. 
To Net Loss A/c 2, 00, 000 
+ IOL 8, 000 
To profit distributed: 
Ravinder’s Capital  
(1, 22, 000 – 52, 000) 
 
2, 08, 000 
 
 
    70, 000 
By Loss Distributed A/c 
Anit’s Capital (1,04,000 + 81,333) 
Sunil’s Capital (52, 000 + 40, 667) 
 
1, 85, 333 
    92, 667 
 2, 78, 000  2, 78, 000 
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