CBSE Class 12 Accountancy Accounting For Partnership Firms

Read and download free pdf of CBSE Class 12 Accountancy Accounting For Partnership Firms. Get printable school Assignments for Class 12 Accountancy. Class 12 students should practise questions and answers given here for Part 1 Chapter 2 Accounting For Partnership Basic Concepts Accountancy in Class 12 which will help them to strengthen their understanding of all important topics. Students should also download free pdf of Printable Worksheets for Class 12 Accountancy prepared as per the latest books and syllabus issued by NCERT, CBSE, KVS and do problems daily to score better marks in tests and examinations

Assignment for Class 12 Accountancy Part 1 Chapter 2 Accounting For Partnership Basic Concepts

Class 12 Accountancy students should refer to the following printable assignment in Pdf for Part 1 Chapter 2 Accounting For Partnership Basic Concepts in Class 12. This test paper with questions and answers for Class 12 Accountancy will be very useful for exams and help you to score good marks

Part 1 Chapter 2 Accounting For Partnership Basic Concepts Class 12 Accountancy Assignment

Question. Ram, Raghav, and Raghu are partners in a firm sharing profits in the ratio of 5:3:2. As per Partnership Deed, Raghu is to get a minimum amount of ₹ 10,000 as profit. Net profit for the year is ₹ 40,000. Find the deficiency amount in the above case.
a) ₹ 750
b) ₹ 1,000
c) ₹ 1,500
d) ₹ 2,000
Answer. C

Question. A B and C are partners sharing profits equally. A drew regularly ₹ 4,000 at the beginning of every month for six months ended 30th September 2020. Calculate interest of A’s draw-ing @ 5% p.a.
a) ₹ 200
b) ₹ 1,200
c) ₹ 350
d) ₹ 700
Answer. B

Question. On 1st April 2018, a partner introduced additional capital of ₹ 50,000 to the firm but Part-nership Deed is silent. The partner demands interest on capital @ 5% p.a. How much inter-est on capital will be payable to the partner:
a) ₹ 3,000
b) Interest on capital will not be allowed
c) ₹ 2,500
d) ₹ 1,800
Answer. C

Question. MATCH THE FOLLOWING
Col. I                                              Col. II
A Interest in Drawings                 i. Credit side of partners’ capital a/c
B Commission to a Parter           ii. Credit side of P&L Appropriation a/c 
C Interest on partners loan         iii. Debit side of P&L Appropriation a/c
D Interest in partners’ capital      iv. Debit side of P&L a/c
     A   B   C   D
a) (i) (ii) (iii) (iv)
b) (i) (iv) (ii) (iii)
c) (ii) (iii) (iv) (i)
d) (iv) (iii) (ii) (i)
Answer. A


Case studies –

Read the hypothetical text and answer the following questions.
Arun, Varun, and Tarun were partners in firm sharing profits equally. On 1st April, 2020, their capitals stood at ₹ 2, 00,000, ₹ 1, 50,000 and ₹ 1, 00,000 respectively. As per the provisions of the Partnership Deed:
1) Arun was entitled to a salary of ₹ 2,500 p.m.
2) Partners were entitled to interest on capital @ 10% p.a.
The net profit for the year ended 31st March 2021, ₹ 1, 50,000 were distributed among the partners without providing for the above items.

Question. What is the amount of interest on capital Varun?
a) ₹ 20,000
b) ₹ 15,000
c) ₹ 10,000
d) ₹ 30,000
Answer. A

Question. What is the amount of distributable profit for the partners after providing salary and interest on capital to the partners?
a) ₹ 50,000 each
b) ₹ 25,000 each
c) ₹ 10,000 each
d) ₹ 15,000 each
Answer. B

Question. Arun’s Capital A/c will be credited with Rs…………….for giving the adjustment to the above omissions.
a) Rs 20,000
b) Rs15,000
c) Rs 25,000
d) Rs10,000
Answer. C

Question. Capital Account/Accounts of …………………… will be debited to give the effect of the above adjustments.
a) Varun
b) Tarun and Arun
c) Arun and Varun
d) Varun and Tarun
Answer. D


Read the hypothetical text and answer the following questions.
A B and C are partners in a firm. Their capitals are ₹ 30,000, ₹ 20,000 and ₹ 10,000 re-spectively. As per the partnership deed,
i) C is to be allowed remuneration of ₹ 3,000 p.a.
ii) Interest on capital @ 5% p.a.
iii) Profits should be distributed in the ratio of 2:2:1.
Ignoring the above terms, a net profit of ₹ 18,000 was distributed among the partners equally.

Question. How much interest on capital is to be credited to partner A?
a) ₹ 1,500
b) ₹ 1,000
c) ₹ 900
d) ₹ 800
Answer. A

Question. How much profit is to be credited to Partner B after all adjustments?
a) ₹ 2,400
b) ₹ 4,800
c) ₹ 1,000
d) ₹ 1,200
Answer. B

Question. What is the total profit to be credited to A, B, and C after all adjustments?
a) ₹ 12,000
b) ₹ 8,000
c) ₹ 9,000
d) ₹ 10,000
Answer. A

Question. What is the amount of the past adjustment entry?
a) ₹ 350
b) ₹ 450
c) ₹ 250
d) ₹ 55
Answer. B


Read the hypothetical text and answer the following questions.
X and Y started business on 1St April 2020 with a capital of ₹ 5,00,000 each. As per the partnership Deed, both X and Y are to get a monthly salary of ₹ 10,000 each, and interest on capital is ₹ 50,000 each. Interest in drawings is as follows X: ₹ 3,000 and Y: ₹ 5,000.
During the year, the firm incurred a loss of ₹ 2,00,000.

Question. What is the amount to be transferred to the Profit and Loss Appropriation Account?
a) ₹ 5,00,000
b) ₹ 2,00,000
c) ₹ 3,00,000
d) ₹ 1,50,000
Answer. B

Question. What is the total amount of salary to be credited to the Partners’ capital account?
a) ₹ 1,20,000
b) ₹ 2,40,000
c) ₹ 1,80,000
d) No salary will be given
Answer. D

Question. What amount of loss is to be transferred to the capital account of both partners?
a) ₹ 1,92,000
b) ₹ 2,00,000
c) ₹ 1,96,000
d) ₹ 1,80,000
Answer. C

Question. What is the share of loss of X?
a) ₹ 1,00,000
b) ₹ 96,000
c) ₹ 98,000
d) ₹ 90,000
Answer. D


ASSERTION –REASON BASED QUESTIONS

Question. Read the following Assertion (A) and Reason(R). Choose one of the correct alternatives given below.
Assertion (A): In a specified situation, interest on the Partners’ Capital is shown in the Profit and Loss Account.
Reason(R): Interest on capital is transferred to the debit of the Profit and Loss Account if it is specified to be a charge.
Alternatives:
(a)Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b)Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation Assertion (A).
(c)Assertion (A) is true but the Reason (R) is false
(d)Assertion (A) is false but the Reason (R) is true
Answer. B

Question. Read the following Assertion (A) and Reason(R). Choose one of the correct alternatives given below.
Assertion (A): If drawings by a partner are on the different dates and/or amounts of draw-ings is not the same interest on drawings is calculated using the product method.
Reason (R) : Interest on drawings is charged for the period it is drawn by a partner, in case the amount of drawings and/or period for which is drawn is not uniform, average method cannot be applied to determine interest on capital.
Alternatives:
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation Assertion (A).
c) Assertion (A) is true but the Reason (R) is false
d) Assertion (A) is false but the Reason (R) is true
Answer. B

Question. Read the following Assertion (A) and Reason(R). Choose one of the correct alternatives given below.
Assertion (A): Adith, a partner in the firm gave a loan of ₹. 50,000 to the firm without an agreement to rate of interest. Interest on Loan by Adith is to be allowed at @6% p.a.
Reason (R): In the absence of the Partnership Deed, Provisions of the Partnership act 1932, apply. Thus interest on a loan to a Partner should be charged @6% p.a
Alternatives:
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation for Assertion (A).
c) Assertion (A) is true but the Reason (R) is false
d) Assertion (A) is false but the Reason (R) is true
Answer. C

Question. Read the following Assertion (A) and Reason(R). Choose one of the correct alternatives given below.
Assertion (A): Ankur, Bhaskar and Rakesh are partners with capitals of ₹. 3, 00,000, 4, 00,000 and 5, 00,000 respectively. The partnership deed provided to allow remuneration to each partner of ₹, 50,000 p.a. and interest on capital @5% p.a. Profit for the year ended 31st March 2021 of ₹. 2, 10,000 was distributed without allowing remuneration and interest on capital. Rectifying entry for the above will be Dr. Ankur and Cr Rakesh by ₹. 5000.
Reason (R): Remuneration and Interest to Ankur, Bhaskar and Rakesh are ₹. 65000, 70,000 and 75000 respectively. Each partner was credited by ₹. 70000. As a result Ankur was ex-cess credited by 5000 and Rakesh was short credited by 5000. Thus Ankur will be debited and Rakesh will be credited by ₹. 5000.
Alternatives:
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation Assertion (A).
c) Assertion (A) is true but the Reason (R) is false
d) Assertion (A) is false but the Reason (R) is true
Answer. A

Question. Read the following Assertion (A) and Reason(R). Choose one of the correct alternatives given below.
Assertion (A) Sandhya, Sudheer, and Namitha are partners sharing profits in the ratio of 3:2:1, Sandhya is guaranteed a minimum profit share of ₹. 75000 p.a after appropriations. Profit for the year after all adjustments were ₹. 1, 80,000. The profit share of Sandhya and Namitha will be Rs.90000, 30000 respectively.
Reason (R): The profit share of Sudheer is ₹. 75000 since her actual share is ₹. 60000(1, 80000*2/6). Balance profit ₹, 105000 will be distributed between Sandhya and Namitha in the ratio of 3:1. Thus Sandhya will get ₹. 78750, and Namitha ₹. 26,250.
Alternatives:
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation Assertion (A).
c) Assertion (A) is true but the Reason (R) is false
d) Assertion (A) is false but the Reason (R) is true
Answer. D


SHORT ANSWER TYPE QUESTIONS

Question. The goodwill of the firm is valued at 4 years purchase of average profit of five years. The profits for the last five years were:
Year Profit
2013-14 : 2,00,000
2014-15 : (3,00,000)
2015-16 : 4,50,000 ( including an abnormal gain of ₹ 50,000)
2016-17 : 3,50,000 (after charging an abnormal loss of ₹ 90,000)
2017-18 : 2,60,000
Calculate the amount of goodwill.
Answer. Goodwill Rs.8,00,000

Question. The capital of the firm of Anuj and Benu is ₹ 10,00,000 and the market rate of interest is 15%. The annual salary of the partners is ₹ 60,000 each. The profit for the last three years were ₹ 2,80,000, ₹ 3,80,000, and ₹ 4,20,000. Goodwill of the firm is to be valued on the basis of two years’ purchases of the last three years’ average super profits. Calculate the goodwill of the firm.
Answer. Goodwill Rs.1, 80,000

Question. A firm earned profits of ₹ 80,000, ₹ 1,00,000, ₹ 1,20,000 and ₹ 1,80,000 during 2010-11, 2011-12, 2012-13 and 2013-14 respectively. The firm has a capital investment of ₹5,00,000. A fair rate of return on investment is 15% pa. Calculate goodwill of the firm based on three years' purchase of average super profits of last four yours.
Answer. Goodwill Rs. 1,35,000

Question. A Firm's average profits are 70,000. It includes an abnormal profit of 5,000. Capital invested in the business is 5,50,000 and the normal rate of return is 10%. Calculate goodwill at four times the super profit.
Answer. Goodwill Rs.40,000

Question. The average profit of a firm is ₹ 48,000. The total assets of the firm are ₹ 8,00,000. The value of other liabilities is ₹ 5,00,000. The average rate of return in the same business is 12%.Calculate goodwill from 22capitalization of average profits method.
Answer. Goodwill Rs.1,00,000 (capital employed = Asset-Liabilities)


LONG ANSWER TYPE QUESTIONS

Question. Ankur and Bobby were into business for providing software solutions in India. They were sharing profits and losses in the ratio of 3:2. They admitted Rohit for 1/5th share in profits. Rohit is guaranteed a minimum profit of Rs.2,00,000 for the year. Any deficiency in Rohit share is to be borne by Ankur and Bobby in the ratio 4:1. Losses for the year were RS.1,00,000. Pass necessary journal entries.
Answer. Ankur’s capital A/C Dr 48,000
Bobby’s capital A/C    Dr   32,000
Rohit’s capital A/C     Dr    20,000
To profit and Loss A/C               1,00,000
Ankur’s capital A/C     Dr   1,76,000
Bobby’s capital A/C    Dr   44,000
To Rohit’s capital A/C        2,20,000

Question. Rohit, Raman, and Raina are partners in a firm. Their capital accounts on 1st April, 2019, stood at ₹ 2,00,000, ₹ 1,20,000 and ₹ 1,60,000 respectively. Each partner withdrew ₹ 15,000 during the financial year 2019-20.
As per the provisions of their partnership deed:
(a) Interest on capital was to be allowed @5% per annum.
(b) Interest on drawings was to be charged @4% per annum.
(c) Profits and losses were to be shared in the ratio of 5:4:1.
The net profit of ₹ 72,000 for the year ended 31st March 2020, was divided equally amongst the partners without providing for the terms of the deed.
You are required to pass a single adjustment entry to rectify the error (show workings clearly).
Answer. 

Raina’s capital A/C   Dr     11,410
To Rohit’s capital A/C        10,150
To Ramana’s capital A/C   1,260

 

Accounting For Partnership Firms -Fundamentals

1. X and Y are partners in a firm. Their capitals as on April 1, 2009 were Rs.2,50,000 and Rs.1,80,000 respectively. They share profits equally. On July 1, 2009, they decided that their capitals should be Rs.2,00,000 each. The necessary adjustments in the capitals were made by withdrawing or introducing cash. According to the partnership deed, interest on capital is to be allowed @8% p.a. X is to get an annual salary of Rs.4,000 and Y is allowed a monthly salary of Rs.800. It was found that Y was regularly withdrawing his monthly salary.
The manager of the firm is entitled to a commission of 10% of the profit before any adjustment is made according to the partnership deed.
Net profit for the year ended on 31st March, 2010, before charging interest on capital and salary, was Rs.80,000. Prepare the Profit and Loss Appropriation account, Partner's Capita accounts and Current accounts. (Profit: X-12,900, Y-12,900; Current A/C: X-33,900, Y-28,500)

2. The partnership agreement of Maneesh and Girish provides that:
(i) Profits will be shared equally.
(ii)Maneesh will be allowed a salary of Rs.400 p.m.
(iii)Girish who manages the sales department will be allowed a commission equal to 10% of the net profit after allowing Maneesh's salary.
(iv) 7% interest will be allowed on partner's fixed capital.
(v) 5% interest will be charged on partner's annual drawings.
(vi) 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 firm's Profit and Loss Appropriation Account.

3. A and B are partners with capitals of Rs.5,00,000 and Rs.3,00,000 respectively. The profits for the year ended 31st March, 2010 was Rs.3,46,000 before allowing interest on partner's loan. Show the distribution of profit after taking the following into consideration:
(i) Interest on A's loan of Rs.1,50,000 to the firm provided on 1st April, 2009.
(ii) Interest on capital to be allowed @ 5% p.a.
(iii)Interest on drawings @6% p.a. Drawings were A Rs.60,000 and B Rs.40,000.
(iv) B is to be allowed a commission of 2% on sales. Sales for the year were Rs.30,00,000.
(v) 10% of the divisible profits is to be kept in a Reserve Account.

4. X and Y are partners with a profit sharing ratio of 1:2 with capitals of Rs.4,00,000 and Rs.6,00,000 respectively. On 1st October, 2004, X and Y granted loans of Rs.1,00,000 and Rs.60,000 respectively to the firm. Distribute the profits/losses amongst the partners for the year ended 31st March, 2005 in each of the following cases:
Case (a) If the profit before interest for the year amounted to Rs.12,000.
Case (b) If the profit before interest for the year amounted to Rs.3,000.
Case (c) If the loss before interest for the year amounted to Rs.7,500.

5.A and B contribute Rs.5,00,000 and Rs.3,00,000 respectively by way of capital on which they agree to allow interest @6% p.a. Their respective share of profit is 3:2 and the profit for the year is Rs.40,000 before allowing interest on capitals. Prepare the necessary account to allocate interest on capitals.

6.L,M and N are partners who have omitted interest on capitals for three years ended on 31st March,2011. Their fixed capitals in three years were L-Rs.40,000, M-Rs.25,000, NRs. 15,000. Rate of interest on capital is 12%p.a. Their profit sharing ratios were 2009- 5:2:1, 2010-3:2:1, 2011- 2:1:1. Give the necessary adjusting entry.

7. The net profit of a firm for the year ended 31st March, 2011 was Rs. 30,000, which has been duly distributed amongst its three partners A, B & C in their agreed proportions of 3:1:1 respectively. It was discovered on 10th April, 2011 that the undermentioned transcations were not passed through the books of accounts of the firm for the year ended 31st March, 2011, which stood duly closed on that date:
a) Interest on capital @ 10% p.a.
b) Interest on drawings : A Rs.350 B Rs. 250 C Rs. 150
c) Commission due to A on a special transaction Rs. 3,000
d) Salary of Rs.5,000 to A and Rs.7,500 to B.
The capital accounts of the partners on 1st April, 2010 were: A Rs.25,000 B Rs.20,000 C Rs. 15,000 You are required to suggest a journal entry to be passed on 10th April, 2011 which will not affect the profit and loss account of the firm for the year ended 31st March ,2011 and at the same time will rectify the position of the partners.

8. A, B and C are the partners in a firm. After the accounts of partnership have been drawn uo and the books closed off, it is discovered that for the years ended 31st March, 2010 and 2011, interest has been allowed to the partners upon their capitals @ 6% p.a. although there is no provision for interest in the partnership deed. their fixed capitals on which interest was calculated were Rs. 1,00,000, Rs. 80,000 and Rs. 60,000 respectively.
During the last two years, they have shared the profits as follows:
2010   3:2:1
2011   5:3:2
You are required to give necessary adjusting entry on 1st April, 2011

9. K & P are partners sharing profit and losses in the ratio of 3:2. They employed C as their manager to whom they paid a salary of Rs.750 per month. C deposited Rs.20,000 on which interest was payable @ 9% p.a. At the end of 2001 (after division of the year's profits) it was decided that C should be treated as partners with effect from 1st January, 1998 with 1/6th share in profits, his deposit being considered as capital, carrying interest at 6% p.a. like capitals of other partners. The firm's profits and losses after allowing interest on capitals were as follows:
1998   Profit   Rs.59,000
1999   Profit   Rs.62,000
2000   Loss    Rs.4,000
2001   Profit   Rs.78,000
Record the necessary journal entries to give effect to the above.

10. A and B are partners with capitals of Rs.50,000 and Rs40,000 respectively, on which they are entitled to interest @ 10% p.a. They divide profits in the ratio of 2:1. They take C into partnership with 1/4th share of profits and guaranteed that his share of profits will not be less than Rs.20,000. C brought Rs.30,000 as his capital. Any excess profits received by C over his 1/4th share will be born by A & B in the ratio of 4:1. Profits at the end of the year before allowing interest on capitals amounted to Rs. 72,000. Distribute the profits.

11. A, B and C are in partnership. A & B sharing profits in the ratio of 3:1 and C receiving an annual salary of Rs.32,000plus 5%of the profits after charging his salary and commission, or 1/4th of the profit of the firm whichever is more. Any excess of the latter over the former
received by C is, under the partnership deed, to be borne by A and B in the ratio of 3:2. The profit for the year ended 31st March, 2011 came to Rs.1,68,000 after charging C's salary. Show the distribution of profits among the partners.

VALUE BASED QUESTIONS

12. A, B and C after completing their computer engineering decided to start the business of developing computer softwares. They entered into partnership for this purpose on 1st April, 2013. Identify any four values which according to you motivated them to form the partnership firm.

13. A,B, C and D are partners in a firm. A has contributed Rs.5,00,000 more towards capital on which he claims interest @ 6% p.a. B and C agreed to it but D opposed it arguing that partnership deed does not provide for it. Identify the value being ignored in this case.

14. A and B are partners. A was authorised to buy goods for the firm. A placed an order of Rs. 10,00,000 with a supplier, who offered 15% commission to A. A declined to receive commision and requested the supplier to reduce to purchase price by 15%. Supplier agreed to it. Which value has been fulfilled by A?

15. Partners decided that 5% profits, each year be given to Resident Welfare Association of the area for establishing a waste management mechanism by setting up a door to door collection system of the waste. Which value has been fulfilled by Partners?

Question. Steps involved in the distribution of profit under minimum guarantee to partner will be…………………..
i) Calculate the amount of deficiency
ii) Calculate distributable profit between/among the partners
iii) Distribute the amount of deficiency between/among the partners who have given the guarantee
iv) Calculate the actual share of profit of each partner
a) (ii) iv) i) iii)
b) (i) ii) iii) iv)
c) (iii) ii) iv) i)
d) (iv) iii) ii) i)
Answer. A

Question. If super profit is zero or negative, it means that the actual average profit is less than or equal to the normal profit
(a) True
(b) False
(c) Partially true
(d) Can’t say
Answer. B

Question. Capital employed by a partnership firm is ₹. 5, 00,000. Its average profit is ₹. 60,000. The normal rate of return for a similar type of business is 10%. The amount of super profit is.
(a) ₹ 50000
(b) ₹ 10000
(c) ₹ 6000
(d) ₹ 56000
Answer. C

Question. The average profit over the last five years was ₹. 60000. The normal yield on capital in-vested in such a business is estimated at 10% pa. Capital invested in the business is ₹. 500000. Amount of goodwill, it is based on 3 years purchase of last 5 years super profit will be
(a) 1, 00,000
(b) 1, 80,000
(c) 30000
(d) 1, 50,000.
Answer. A

Question. As per AS-26 -------------------Goodwill is recorded in the books of accounts.
(a) Purchased
(b) Self-generated
(c) Both a) and b)
(d) None of these
Answer. D


Case studies –

Read the hypothetical text and answer the following questions.
A, B, and C are partners in a firm. Their capitals are ₹ 30,000, ₹ 20,000 and ₹ 10,000 respectively. As per the partnership deed,
i) C is to be allowed remuneration of ₹ 3,000 p.a.
ii) Interest on capital @ 5% p.a.
iii) Profits should be distributed in the ratio of 2:2:1.
Ignoring the above terms, a net profit of ₹ 18,000 was distributed among the partners equally.

Question. How much interest on capital is to be credited to partner A?
a) ₹ 1,500
b) ₹ 1,000
c) ₹ 900
d) ₹ 800
Answer. B

Question. How much profit is to be credited to Partner B after all adjustments?
a) ₹ 2,400
b) ₹ 4,800
c) ₹ 1,000
d) ₹ 1,200
Answer. C

Question. What is the total profit to be credited to A, B, and C after all adjustments?
a) ₹ 12,000
b) ₹ 8,000
c) ₹ 9,000
d) ₹ 10,000
Answer. C

Question. What is the amount of the past adjustment entry?
a) ₹ 350
b) ₹ 450
c) ₹ 250
d) ₹ 55
Answer. C


Read the hypothetical text and answer the following questions.
A, B and C are partners in a firm sharing profits and losses in the ratio of 2:2:1. Their capitals (Fixed) are ₹ 1, 00,000, ₹ 80,000, and ₹ 70,000 respectively. For the year 2018-19, interest on capital was to be credited to them @ 9% p.a. instead of 12%

Question. What was the net amount that should be credited to partner B?
a) ₹ 1,500
b) ₹ 2,400
c) ₹ 1,800
d) ₹1,200
Answer. B

Question. What was the net amount that should be credited to partner C?
a) ₹ 1,800
b) ₹ 2,000
d) ₹ 2,100
d) ₹ 1,700
Answer. D

Question. What was the amount that was debited to partner B?
a) ₹ 1,500
b) ₹ 2,000
c) ₹ 3,000
d) ₹ 4,000
Answer. A

Question. What was the number of past adjustment entries?
a)₹ 400
b) ₹ 300
c) ₹ 600
d) ₹ 500
Answer. B

Question. A and B started a partnership business on 1st April 2021. They contributed ₹ 6,00,000 and ₹ 4,00,000 respectively, as their capitals. The terms of the partnership agreement are as under:
(i) Interest on capital and drawings @ 6% per annum.
(ii) B is to get a monthly salary of ₹ 2,500.
(iii) Sharing of profit or loss will be in the ratio of their capital contribution.
The profit for the year ended 31st March 2022, before making the above appropriations was ₹ 2,07,400. The drawings of A and B were ₹ 48,000 and ₹ 40.000 respectively. Interest on drawings amounted to ₹ 1,500 for A and ₹ 1,100 for B.
Prepare profit and loss appropriation accounts and partner's capital accounts
assuming that their capitals are fluctuating.
Answer. Divisible profit Rs.1,20,000.
Capital balance : A ‘s capital Rs. 6,58,500 B’s capital Rs. 4,60,900

Question. Y and Z are partners with capitals of ₹ 25,000 and ₹ 15,000 respectively on 1st April 2020. Each partner is entitled to 9% p.a. interest on his capital. Z is entitled to a salary of ₹ 6,000 p.a. together with a commission of 6% of Net Profit remaining after deducting interest on capital and salary and after charging his commission. The profits for the year ended 31st March 2021 before making any of the above-mentioned adjustments amount to ₹ 30,800. Prepare Partner's Capital Accounts:
(1) when capitals are fixed, and
(2) when capitals are fluctuating
Answer.  
Divisible profit of Rs.20,000
When capitals are fixed: current a/c balance Y Rs.12,250( cr ) Z Rs. 18,550(cr)
When capitals are fluctuating: capital accounts Y Rs. 37,250 (cr) Z Rs.33,550(cr)

Question. The capital accounts of Alka and Archana showed a credit balance of Rs.4,00,000 and 3,00,000 respectively, after taking into account drawings and a net profit of RS.2,00,000. The drawings of the partners during the year 2018-19 were
a. Alka withdrew Rs.10,000 at the end of each quarter
b. Archana’s drawings were
31st May 2018 Rs.8,000
1st November 2018 Rs. 7,000
1st February 2019 Rs. 5,000
Calculate interest on partner’s capitals@10% p a and interest on partners’ drawings @ 6% p a for the year ended 31st March 2019.
Answer. Interest on capital: Alka Rs.34,000 Archana Rs.22,000
Interest on drawings: Alka 40,000*6/100*4.5/12 = 900/-
Archana 1,25,000*6/100*1/12 =625/-

Question. Lata and Mamata are partners with capitals of ₹3,00,000 and ₹ 2,00,000 respectively sharing profits as Lata 70% and Mamata 30%. During the year ended 31st March 2021, they earned a profit of ₹ 2,26,440 before allowing interest on the partner's loan. The terms of the part-nership are as follows:
(i) Interest on Capital is to be allowed @ 7% p.a.
(ii) Lata is to get a salary of ₹ 2,500 per month.
(iii) Interest on Mamata’s Loan account of 80,000 for the whole year.
(iv) Interest on drawings of partners at 8% per annum. Drawings being Lata ₹36,000 and Mamata ₹ 48,000.
(v) 1/10th of the distributable profit should be transferred to General Reserve.
Prepare the Profit and Loss Appropriation Account.
Answer. Share of profit : Lata Rs.1,00,800 Mamata Rs.43,200
( interest on drawings will be calculated for an average period of 6 months.
Transfer to general reserve will be 10% of Rs.1,60,000)

Question. P and Q were partners in the firm sharing profits in the 3:1 ratio. Their respective fixed capitals were ₹ 10,00,000 and ₹ 6,00,000. The partnership deed provided interest on capital @ 12% p.a. The partnership deed further provided that interest on capital will be allowed fully even if it will result in a loss to the firm. The net profit of the firm for the year ended 31st March 2018 was ₹ 1,50,000.
Pass necessary journal entries in the books of the firm allowing interest on capital and division of profit/loss among the partners.
Answer. Net loss transferred to current Account : P Rs.31,500 Q Rs.10,500

Question. The goodwill of the firm is valued at rs.1,35, 000 at three years purchase of the super profit. Determine the missing values.
Average profit = 3,60,000/3= Rs.1,20,000
Normal profit= ________*15/100 =?
Super profit = ?
Answer. Goodwill = super profit* no. of years purchase
1,35,000 = super profit*3
Then super profit =1,35,000/3= 45,000
Super profit = average profit-normal profit
45,000 = 1,20,000-normal profit
Then Normal profit =1,20,000-45,000 = 75,000
Normal profit = capital employed*rate/100
75,000 = capital employed *15/100
Then capital employed 75,000*100/15 =5,00,000

Question. The capitals of X, Y, AND Z as of 31st march 2021 amounted to Rs. 1,50,000, 5,50,000 and 11,00,000 respectively. Divisible profit amounting to Rs.3,00,000 for the year ended 31st March 2021 was distributed in the ratio of 4:1:1 after allowing interest on capital @10% p a. During the year each partner withdrew Rs. 50,000 per month at the beginning of each month. The partnership deed was silent as to profit sharing ratio and interest on drawings but provided for interest on capital @12 p.a.
Showing your workings, pass necessary adjusting entries to rectify the above error.
Answer. 

X’s capital A/C   Dr   1,10,000
To Y’s capital A/C            50,000
To Z’s capital A/C             60,000

Part 1 Chapter 01 Accounting for Not for Profit Organisation
CBSE Class 12 Accountancy Accounting for Not for Profit Organisation Assignment
Part 1 Chapter 04 Reconstitution of a Partnership Firm Retirement/Death of a Partner
CBSE Class 12 Accountancy Retirement and Death of Partner Questions
Part 1 Chapter 05 Dissolution of Partnership Firm
CBSE Class 12 Accountancy Dissolution of Partnership Firm Assignment
Part 2 Chapter 03 Financial Statements of a Company
CBSE Class 12 Accountancy Financial Statements of a Company Assignment

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